Investing in your business can feel a little different than investing in your home. A business investment should pay off in the long run, but the sooner it pays off the better! So what is it about the Texas and Colorado sun that makes commercial solar such a secure investment for businesses?
A hint: the sun is only part of the equation. Here is how you can utilize a custom designed system of solar PV (photovoltaic) panels to reduce your carbon footprint, monthly utility costs, and tax liability, and turn your renewable energy system into a lucrative financial investment.
Lower Utility Costs
As the monthly income for many businesses throughout Denver, Colorado Springs, Aurora, Pueblo, Colorado, as well as San Antonio, Austin, Laredo, and the Rio Grande Valley of Texas, are diminishing (or even evaporating) in this time of social distancing, paying the utility costs of a building can be a threat to the financial health of a company. Investing in solar installation now can cut future utility costs by reducing, or in some cases, eliminating energy costs.
This makes for a more resilient business that is less susceptible to unpredictable energy prices as well as times of economic downturn.
Commercial Tax Benefits
The Federal Investment Tax Credit is still available for commercial solar PV systems, though it is declining! This solar tax credit provides a 26% reduction of the total solar installation costs from your tax liability at the end of the year, and can even be rolled over to the following year if the total reduction covers more than your federal tax liability for this year. After December 31st, 2020, the solar tax credit drops to 22%. After 2021 it will remain at just 10% for commercial systems.
This reduces the payback period for solar installation, providing a much faster ROI and a fast track to outright ownership (in the case of solar financing).
The Modified Accelerated Cost Recovery System (MACRS) depreciation for commercial solar is a 5-year depreciation cost recovery, equivalent to about 25% of the project costs. Combining these two tax benefits can shift capital that would have gone to pay taxes towards investing in a more secure future for your business.
Net Metering & Local Utility Incentives
Depending on the daily peak sunlight for your particular area, the size of your solar PV system, and your energy usage, solar panels will often generate more electricity than a commercial building can use at any given time. When there is an excess of solar energy, it is diverted back into the electricity grid. This is so that other homes and businesses can benefit from using clean, renewable energy — and the utility company compensates you for this in the form of a credit on your energy bill. This is called net metering, and can be used to offset the non-solar energy usage of your commercial building, like overnight while the sun is down.
There may also be other solar rebates or financial incentives that can reduce the upfront cost of installation, depending on your utility company and other municipalities.
Solar Batteries & Tesla Powerwall
If you are interested in saving that excess energy that would normally go back to the grid, you can also include battery storage, like Tesla Powerwall, into your solar installation plans. A solar battery system stores that excess energy as a reserve, so you can keep your lights on using renewable electricity 24 hours a day.
Solar-plus-storage systems can be designed to operate completely independently from the grid, so that you are not out of power during an outage, blackout, or brown out. This can significantly increase the resilience of your business, especially if your business assets are dependent on refrigeration or lighting systems, i.e. the food service industry or indoor agriculture.
Real Estate Values
If it wasn’t already clear, solar is a valuable asset to a business. Because of this, a commercial property that includes solar is more valuable to prospective buyers. The Net Present Value (NPV), or how solar adds value to your business over the industry standard life expectancy of 25 years, increases the real estate value of your property immediately.
Solar is the Smart Business Move
If you are planning to take this downtime to invest in the infrastructure of your business here in Texas or Colorado, CAM Solar is here to help. Solar energy is an investment in the financial health and energy security of your business, as well as the environmental health of your local and global community. Show your customers and your employees that you are dedicated to doing your part by reducing your carbon footprint, and save some money while you’re at it!
We can help you determine your solar needs, and include a commercial Tesla Powerwall battery in your solar plans so you can keep the lights on in your business for decades to come.