There are many factors a business must consider when contemplating going solar. These range from bottom line savings, ability to finance, and the strategic advantages of marketing the business as a sustainable company.
Dollars and $ense – If you are a property owner, the impact on your bottom line will be well worth the cost of installing a solar energy system. The cost of solar panels have decreased, while the their life expectancy has increased. Most reputable solar installers will offer premium products with a minimum of 25 year warranties. This makes going solar a viable long term investment and a strategic financial advantage.
In addition to reduced energy costs, the 30% Federal Investment Tax Credit (ITC) allows property owners a tax credit for 30% of the cost of their solar energy system. It is important to note that the 30% ITC is ending on January 1, 2020, after the ITC drops to 26%.
Another tax benefit comes in the form of accelerated depreciation. Accelerated depreciation allows property owners to deduct 85% of the value of their solar assets from their taxes.
Currently, New Jersey has performance based incentives through Solar Renewable Energy Credits (SREC), a solar incentive that allows property owners to sell certificates to their utility company. A property owner will earn one SREC for every 1000 kilowatt hours (kWhs) produced by their solar panel system.
Electric usage prices are unpredictable. Locking in the benefits of solar energy guarantees predictable monthly utility bills and protects commercial businesses and non-profits from being vulnerable to long term energy inflation.
Favorable Financing – One of the most daunting factors in a company’s decision to invest in solar energy is whether or not they have the ability to finance their solar energy system. Veteran solar energy companies should be able to work with businesses and non-profits to create financing solutions that are uniquely tailed to the company’s bottom line and their long term energy needs.
Solar Financing Options Include:
Cash – Company realizes the immediate benefits of solar energy without long term debt. The savings begin with the first utility bill. Current tax benefits increase returns.
Loan – With qualifying loans, company retains full ownership benefits with the financial payback being proportional to the loan’s interest payments.
Lease – Company pays a monthly lease payment that is not tied into the amount of energy it generates. The monthly payment is typically locked in for the full term of the lease. At the end of the term, the company could be offered an option to purchase the system or renew the lease.
PPA (Power Purchase Agreement) – Company pays for the solar energy produced but not the hard materials (panels, inverters, racking) that comprise the system. It is essentially the creation of a company’s utility by contract with a third party solar system owner. PPA contracts lock in predictable rates without future surprises and are best suited for non-profits, municipalities, utilities, and co-ops.
Marketing Your Business as a Sustainable Company Being a sustainable company has a tremendous value to any organization in terms of how it is perceived by both internal employees and the community at large.
Employees take pride in being a part of a company that puts equal value into protecting people and the environment as they do into productivity and profits. Sustainable companies tend to have higher employee retention rates.
From a branding perspective, Green is the new Black. According to Forbes, more than 90% of CEOs report that sustainability is crucial the success of a brand. Studies consistently point to the fact that consumers are more willing to spend money on a product that comes from a sustainable brand. Communities are more likely embrace and promote a company that exhibits environmental, economic, and social sustainability.
Going solar demonstrates to both consumers and employees that the company is sustainable and forward thinking in terms of creative options to increase the bottom line.
Geoscape Solar has been in the solar business for over a decade. Our mission is to provide energy alternatives to build a more sustainable future. We inspire, we educate, and make it easy to make a difference.