3 Ways Solar Panels Save U.S. Businesses Money
The increasing availability of solar panels to consumers has also been good news for businesses of all sizes. Associated with the higher demand is better solar technology and a range of solar incentives that make renewable energy cheaper and more practical for businesses.
Solar modules not only save money on energy costs, but can also save money in other ways – for example with good PR and government loans for renewable energy projects.
Here’s a look at how solar panels save money as long as they have some land or rooftop space available.
1. Energy savings and resale of electricity to the power grid
The most obvious cost savings come from the power that a solar panel array – a collection of multiple solar panels – can produce.
Production capacity depends significantly on how many panels a company installs, how many hours of direct sunlight the panels receive, and what the average cloud cover is in the area.
According to market data from EnergySage, the average American company pays $ 557 in energy bills every month. Companies that installed solar modules were able to cut these costs by 89%, thereby reducing their monthly energy costs almost completely. As the price of solar panels and related technologies like battery storage systems continues to fall, these numbers may get even better.
Companies that install solar panels can cut costs significantly. Photo: Science in HD.
Companies with grid-connected buildings can also sell excess energy back to their utility company using grid metering programs. This potentially saves the company extra money on electricity bills.
For consumers, disbursements for excess solar production are usually in the form of an electricity bill, which means that businesses cannot make a profit from solar energy production. However, this loan can be carried over to the next month, which means the company may be able to effectively zero its typical energy costs with sufficient production capacity.
The company can also install a battery system that will allow it to store some of the excess energy it produces. When the sun goes down or there is less sunlight available, the company can use this stored electricity without having to buy energy from the grid.
The average daily solar radiation that solar panels collect for power detection tends to be higher in the southern United States than in the north, especially in areas with flat terrain and low average cloud cover. However, a solar system can function anywhere in the country. Businesses in the north can potentially benefit as much as businesses in the Mojave.
2. Renewable Energy Credits and Other Green Energy Programs
While renewable energy projects almost always pay for themselves on time, the initial investment costs can be too high for some companies – especially for smaller companies with less capital for large projects.
This is where credits for renewable energy and similar programs can help. The growing state and federal interest in promoting renewable energies has led to the creation of incentives for renewable energies in the form of tax credits, subsidized loans and discounts.
Both individual consumers and businesses are eligible for the Solar Investment Tax Credit (ITC). The ITC grants a federal tax credit of 26% of the costs of a new solar project minus any cash discounts.
In addition to solar panels, the loan sometimes also covers related project costs, e.g. For example, the cost of inverters to convert DC to AC power, related technologies such as electric vehicle (EV) chargers, installation costs, and the roof construction costs required for the project to begin.
The ITC is unfortunately slated to expire in 2022 after Congress passed a bill that extends the tax credit for another two years. Congress can act to add credit even further, and they have in the past. For entrepreneurs looking to start a project in the next few years, it might be a good idea to look for alternatives.
Other tax credits and federal programs can help companies lower the cost of their solar panel arrays. With the Modified Accelerated Cost Recovery System (MACRS), companies can, for example, deduct the depreciation costs of a solar array over a period of five years.
Some states also offer subsidized solar loans. This doesn’t directly save companies money, but it can help them cover the cost of a new solar project for less than unsubsidized loans.
A variety of programs and incentives may be available depending on the state. California, for example, is one of the leading solar energy providers in the nation, offering incentives such as SGIP rebates that can provide significant savings on business equipment related to solar energy generation.
For example, government utilities such as SDG&E, PG&E, SCE, and SCG are offering discounts of up to $ 400 per kilowatt hour through the SGIP for individuals and businesses installing battery storage systems.
In many cases, this can be enough to almost completely cover the cost of a new battery system.
3. Good press and growing customer demand for green companies
Consumers are increasingly demanding environmentally friendly products and are more likely to choose sustainable companies than companies that do not take measures to protect the environment.
This is especially true for younger consumers. For example, studies of Gen Z’s retail habits found that 73% of the generation are willing to pay more for sustainable branded goods.
Research shows that Gen Z is willing to pay more for sustainably produced goods. Photo: Liza Summer.
Related post: Gen Z report reveals anti-aspiration and environmental attitudes among young consumers
In addition to reducing energy costs, solar panels can also help companies demonstrate their commitment to environmentally friendly and sustainable practices. This, in turn, reduces the costs associated with marketing to Millennials and Gen Z – two demographics that are sometimes viewed as resistant to traditional marketing techniques.
The introduction of solar technology can also help a company achieve green building certifications such as LEED certification. These certifications are a great way to show concrete steps towards sustainability and, according to the US Green Building Council, can help improve the value of the building.
How Solar Panels Can Save Businesses Money
A solar panel array can represent a significant cost saving for businesses when they can handle the large upfront investment required. The energy generated by solar modules can, depending on the location of the solar system and local weather conditions, be sufficient to completely cover the typical electricity consumption of a company.
For businesses that cannot afford the initial cost of building solar panels, there may be several renewable energy incentives that can help cover construction costs – and in some cases provide savings long after installation is complete.
Science cover photo in HD.
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