How Commercial Solar Power Protects Your Bottom Line
2/2/2024
Fluctuating energy costs can significantly impact your bottom line. One way to protect your financial investment and ensure long-term stability is by shifting to commercial solar power systems. This article explains how commercial solar can protect your bottom line and how it can be a long-term asset for your business.
Understanding Commercial Solar Power Systems
Commercial solar power systems are solar panel systems designed specifically for business applications rather than residential use. They work similarly to residential systems, but on a larger scale with some key differences in system types and economic benefits.
Besides the environmental benefits, commercial solar systems offer promising economic advantages. They allow businesses to cut down their energy costs, enjoy tax credits, and create a resilient and sustainable operation.
Brief Overview of Commercial Solar Power
The main components of a commercial solar system include panels (either on rooftops or ground-mounted), wiring, one or more inverters, a monitoring system, and often a battery storage system. Many commercial solar systems are designed as grid-tied, meaning they are connected to the local electric grid.
Commercial systems generate clean electricity from sunlight, offsetting the power purchased from the utility company. Solar panels produce DC power, which flows to an inverter that converts it into usable AC power. That solar power is then used onsite with any excess sent to the grid through net metering programs.
By generating their own power, businesses can reduce their energy bills and benefit from federal tax credits, additional state/utility incentives, and accelerated depreciation savings.
How Solar Power Works in Commercial Settings
There are some important considerations when implementing solar in a business:
- Larger system sizes in commercial projects are typically measured in megawatts rather than kilowatts.
- There is greater energy demand to offset, especially in industrial facilities.
- There are variations in utility rates and net metering policies among utility territories.
- System types and positioning must meet codes and integration needs.
Qualified solar installers design systems to meet the facility's needs correctly and safely.
Types of Commercial Solar Power Systems
There are three commercial solar system types:
- Rooftop Solar PV: Solar panels mounted on flat or sloped roofs
- Ground-Mount: Solar arrays constructed on racks or poles anchored to the ground
- Carport: Solar installed on cantilevered structures, creating shade for parking areas
Within those configurations, solar panels may be fixed or mounted to tracking equipment that follows optimal angles towards sunlight throughout the day. Installers conduct shade analysis, structural assessments, and feasibility studies to determine suitable solutions.
Battery storage is also commonly integrated, storing energy for use when solar production is unavailable while providing resiliency from grid outages.
Never had a solar assessment before? Learn what to expect during a professional estimate and how the survey process works in this article.
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Long-Term Asset Protection Through Solar Power
Installing a commercial solar power system can provide long-term protection for your business in several key ways. By reducing dependence on the energy grid, offsetting fluctuating rates, preventing power outages, and supporting sustainability, solar power gives companies greater control of their energy costs for decades to come.
Reducing Dependence on the Grid and Offsetting Fluctuating Power Rates
Utility power rates have increased by an average of 3–5% per year over the past decade, a trend that''s projected to continue. By contrast, the main ongoing costs of a commercial solar system come from panel cleaning and maintenance, which are minimal compared to energy bills.
Once your solar panels are installed, you can lock in a consistent energy rate for up to 25 years. This prevents fluctuations in utility rates from impacting your business. Fixed pricing gives organizations greater certainty over future costs.
Generating your own solar power also means relying less on the utility grid. You can use the sun's energy during peak daytime hours and draw from the grid at night. Reducing grid dependence provides a buffer against rate hikes.
Maintaining Uptime During Power Outages
Between severe weather and aging infrastructure, power outages are becoming more frequent. Even brief outages can cause major business disruptions and revenue loss.
Solar panels allow you to maintain essential operations during grid outages. For even greater resilience, you can pair solar with
battery storage systems. Batteries let you store solar energy for use anytime, providing reliable backup electricity.
There are two main storage setups: off-grid and grid-tied. Off-grid systems operate independently to keep sites running.
Grid-tied systems only use battery power during outages but can recharge from the grid as needed.
Enhancing Sustainability and Reducing Your Carbon Footprint
Today's consumers and employees want to engage with responsible, eco-friendly companies. Green business practices are becoming prerequisites for winning new customers and attracting top talent.
Solar energy allows organizations to reduce their environmental impact. Once panels are installed, you can source clean, renewable power for decades. Switching even partially to solar can significantly lower your carbon emissions.
Promoting your solar adoption demonstrates social responsibility and sustainability. Consumer perception surveys show that sustainability has become a major influence on purchase decisions across demographics.
Communicating your commitment also appeals to mission-driven job seekers. Highlighting corporate social responsibility can give your employer brand an edge.
The Cost-Saving Potential of Solar Power
Solar offers a shield from volatile utility prices that are vulnerable to market conditions. Once a solar system is purchased, the "fuel" price of sunlight is fixed at zero.
With commercial solar, it's important to use financial modeling tools to analyze the total cost of ownership for the most accurate projection of benefits.
Return on Investment with Commercial Solar Systems
Commercial solar energy investments can yield attractive returns, generally paying for themselves within 3–7 years. Cost savings accrue through tax incentives and lower electricity bills.
For example, a 500 kW system for a warehouse may cost $850,000 upfront. But it could eliminate $100,000 in utility bills annually, totaling over $2 million over a 20-year equipment lifespan. After incentives and depreciation savings, that system may realistically pay itself off in closer to 5 years.
Government Incentives and Tax Credits
The federal investment tax credit (ITC) offers 26% of installed costs returned through tax credits. This applies to both businesses and nonprofits. On top of that, bonus depreciation allows 100% of equipment costs to be deducted in the first year.
State incentives, utility rebates, and net metering programs add further benefits. Working with experienced solar financing advisors helps identify and capture incentives to enhance ROI.
Start Your Commercial Solar Power Journey With Pacifico Power
When considering the best options for your bottom line, think about the energy independence of solar power.
Pacifico Power has the resources and know-how to build a
solution that fits your business''s goals and budget. From start to finish, your bottom line is secured. Contact Pacifico Power for a consultation today.
