Solar for Your Business
Not sure if a solar system makes financial sense for your business. Because Solar On Earth offers a “one stop shop” approach, our commercial specialists can explain all the variables and alternatives. Our goal is to take you from “not knowing to knowing” in order to help you determine the right choice for your particular business or building. And if it turns out that owning a solar system is not your best option, you can still participate and profit from solar energy through a program called community solar.
The Investment Benefits of Solar
Increasingly, solar has become a true investment. And like any good investment there is an expectation for a return on that investment (ROI). Whether solar can offer you a sufficient ROI depends on a number of factors:
- Reduced Electric Costs: How much of your electric costs can be offset? In some cases, the answer may be all of it. It just depends on the on the size of your solar array and the amount of power your business consumes.
- Business Energy Investment Tax Credit (ITC): Successful businesses turn a profit which means there are taxes to pay. The Federal Government provides a 30% Investment Tax Credit (ITC) toward the cost of solar installations. If your tax liability is sufficiently large, you may be able to avoid paying the full credit amount to the IRS and instead use that money to invest in the future of your business. However, what the government giveth, the government can taketh away. Be aware that the value of the ITC is currently scheduled to decline to 26% in 2020, 22% in 2021, and 10% in 2022 and beyond. So, if you’re contemplating installing a solar system there is no time like the present.
- Accelerated Depreciation: In business depreciation is your friend. Current rules allow you to depreciate the entire system cost over a five-year period. Your tax advisor can assist in determining the exact value derived from a solar system depreciation schedule.
- Hedge Against Inflation: As energy costs rise – and history tells us they will – your savings and return on your investment also rise.
- Clean, Renewable Energy: Younger generations are more environmentally conscience than previous generations and that trend is likely to continue. Millennials want to support eco-friendly businesses. Regardless, even if helping to improve the environment doesn’t help your bottom line, if you have children the environmental benefits can no longer be ignored. Each kilowatt hour of solar power eliminates an estimated 1.6 pounds of CO2.
When Does Solar Make Sense?
Generally, if your business has one or more of the following characteristics you will benefit the most from the installation of solar panels:
- Lots of lighting and/or the need for 24/7 lighting
- Multiple refrigeration units like convenience and grocery stores
- Extensive air conditioning and/or heating units
- Heavy machinery such as machine shops or manufacturing facilities
- Greenhouses, nurseries, and cannabis grow operations
We can install solar panels on roofs of existing buildings, mount solar panels on the ground, or create solar carports for businesses.
Different Approaches to Going Solar
Most solar installers narrow your decision to one choice because they only offer one solution. The problem is that solution often isn’t the best one for the customer. We make it our mission to offer a full range of solar solutions.
- A solar power system purchase: This option offers by far the greatest utility cost savings and the highest long-term return on investment (ROI). The downside is that in most cases it also requires the most substantial upfront commitment. Determining whether the long-term value is worth it requires a full system installation and cost assessment.
- A solar power-purchase agreement (PPA): A PPA is where an investor pays for a system to be built on your property and offers the power generated back to you at a discount to standard utility rates. In this case you only pay the investor for each kilowatt-hour (kWh) of energy that the solar system produces, typically over a period of 20 years.
- Generate revenue from a solar lease: You may be able to transform your land, parking lot or rooftop into a source of revenue by leasing your property to a solar developer.
System Installation & Maintenance
“What is the process?”
Going solar is so much easier than you might think. We do most of the heavy lifting. The process flow goes something like this…
- Initial discussion: You provide a copy of a recent electric bill to our experienced solar consultant. We’ll use the information to assess your situation and outline the potential options. If you are applying for community solar, we can help you complete your application on the spot.
- Preliminary system design: If the best option is to purchase a system, our designers will create a solar system design specific to your property.
- Follow-up: We’ll present your design(s) and a proposal. If you are buying, leasing or getting a mounted installation PPA, this is when you say, “I’m saving that much money. YES!”, and with your conditional approval, a survey is scheduled.
- Survey conducted: A surveyor arrives at your home to get exact measurements, take Sun Eye measurements (to measure the light hitting the roof), conduct a roof inspection, and check that your electric panel is up to snuff. This data is sent to our design team, who then modifies the design for maximum efficiency. If you are buying a system and plan to apply for a loan you may need assistance to identify possible lenders. If so, this is a good time to provide copies of your last three-years’ tax returns to your solar planner.
- Final design/contract execution: Your solar consultant presents your final design. Providing that you are satisfied, you’ll sign an Engineering, Procurement, and Construction (EPC) agreement, submit a deposit, and sign “interconnection” applications for your grid utility provider. If you are leasing or using a PPA, you’ll sign the applicable agreement at this point.
- Applying for permits: Once the appropriate milestone payment is made, we’ll apply for electrical and building permits and apply for “utility interconnection pre-approval”.
- Materials ordered and construction is scheduled: A second milestone payment is made following which all materials are ordered. At this point, we work with you to finalize the construction schedule. Once the materials arrive… we install your system. Once everything is queued up, a typical system can be installed in less than a week.
- System inspections: Once construction is complete, Solar On Earth will order inspections by both your municipality and grid utility company.
- New electric meter installed: When the inspections are completed, your utility provider will install a SMART meter and will issue “permission to operate” (PTO). Your system can now be switched-on. SUCCESS!
While project completion times vary for numerous reasons, a typical commercial project run approximately four to six months, sometimes longer. Your involvement is limited to meeting with your solar planner, obtaining the loan (if necessary), signing a few documents, and having someone present during the survey and installation.