3 Reasons Solar Power Is Good for Businesses
Electric power generation is one of the top contributors of greenhouse gases (GHGs), accounting for approximately 25% of all GHG emissions in the United States. Reducing GHG emissions is one key step forward for businesses across all industries, and investing in solar power is a great way to take that step.
Unlike traditional electricity, which comes from fossil fuels, solar photovoltaic (PV) panels generate electricity directly from sunlight. Businesses can use this electricity for any purpose, from keeping the lights on to powering manufacturing plants. This post will discuss the most important solar benefits for businesses.
The Advantages of Solar Panel Installation
Solar panels bring more business benefits than simply reducing a company's carbon footprint. Here's a quick overview of the biggest advantages of using PV systems for commercial applications:
- Business tax credits: The federal government allows businesses tax credits or deductions just for installing a PV system. The extent of the credit varies depending on when the system was constructed.
- Reduced overhead costs: Solar power is essentially free, so businesses can cut back on their utility bills.
- Energy independence: Getting off the commercial power grid can save a company money and provide peace of mind during periods of high inflation.
- System longevity: Solar panels can last between 25-30 years with proper maintenance. Thankfully, they require minimal upkeep, so keeping them in good condition is easy for most companies.
- Fast return on investment (ROI): Solar panel systems can pay for themselves within only a few years. The exact time it takes to make a return can vary depending on several key factors, such as energy use and the number of panels installed, but businesses can expect to gain their initial investments back and exceed it relatively quickly with solar.
For most businesses, the most important benefits include cost savings, longevity, and competitiveness.
1. Solar Panels Cut Overhead Costs
Overhead costs include more than simply keeping the lights on. For many organizations, business overhead consists of:
- Operational materials
- Employee wages
- Equipment and building maintenance
Reducing — or completely eliminating — the company electricity bill is one of the chief advantages of installing solar panel systems. Some of the ways solar power helps further cut down on business expenses include the following:
Businesses can begin saving money on electricity as soon as their solar panels are operational, which can help them get an ROI within only a few years.
A business's potential ROI depends heavily on several factors:
- The initial cost of the solar panels
- The size of the system
- The type and size of photovoltaic cells installed
- The tax credits and deductions the company is eligible for
- The state a business is located in
- A company's typical energy consumption
Reduced Electricity Costs
A consistent energy supply is critical for businesses across all industries. Electricity keeps the lights on, the HVAC system running, and the assembly line operating according to plan. Companies can save costs by improving their building's energy efficiency, but there's a limit to how efficient something can be.
A long-lasting way to cut overhead costs is by reducing energy expenditures. Renewable energy sources, like solar power, are excellent options. Although purchasing and installing solar panels comes with upfront costs, solar energy pays for itself quickly.
Solar power enables businesses to gain more control over their expenses. When a business is dependent on the commercial power grid, it's subject to price increases caused by seasonal demand spikes, inflation, and supply shortages.
This variable pricing is because commercial electricity is a commodity that, like any other, can be purchased and sold according to demand. Any time demand for electricity spikes, so does the energy bill. That's why it is so important to consider making businesses more energy independent.
Obtaining even partial energy independence makes it easier to predict energy costs from month to month. Independently generated solar power is not subject to market forces, so its cost will not increase over time like commercial power will.
Solar Federal Investment Tax Credit
In 2020, Congress extended the existing investment tax credit (ITC) for businesses investing in solar panel systems. First, businesses can claim a tax credit of 30% or the cost of a solar panel system that entered service during that tax year.
The potential ITC decreases according to the year businesses begin construction on a solar panel system:
- 2020-2022: 26% credit
- 2023: 30% credit
- 2024 or beyond: up to 10% credit
Most solar panel systems that are eligible for the ITC are also eligible for accelerated depreciation using the modified accelerated cost recovery system (MACRS). This system helps businesses recover the value of their assets through annual tax deductions.
MACRS categorizes assets into classes based on set depreciation periods — eligible commercial solar panel systems fall under the five-year category. This category uses a general depreciation system (GDS) based on declining balance. For five years, the depreciation rate is applied to the non-depreciation balance annually.
Raise Property Value
In addition to cutting costs, solar panel systems can make property more valuable. If a business needs to relocate, they can often sell their current property at a higher list price than they would without solar panels.
The energy savings solar panels can provide are incredibly attractive to prospective buyers. The buyer can take advantage of the system and get started making an ROI right away. Many businesses looking to relocate often look for solar power systems when looking for new property.
Solar-enabled structures can enhance a property's aesthetic appeal, which can also make the property more attractive to buyers. Generally speaking, aesthetically pleasing properties yield higher property values than others.
2. Solar Power Boosts a Business's “Green” Reputation
It's not enough for companies to post about saving the environment on their social media pages. In an increasingly eco-conscious world, consumers look for companies that are taking action against the climate crisis.
Using solar power is an excellent way to position a business as environmentally minded, which can help companies stand out from the competition.
Renewable Energy Source
Renewable energy comes from natural sources that replenish faster than humans consume them. Solar power is perhaps the ultimate example of renewable energy, as the sun's energy is impossible to deplete.
Public awareness around renewable energy is growing rapidly, which is why consumers want to support companies that invest in and actively pursue clean energy generation.
Companies can advertise their solar projects to draw in new customers, but all claims must truthfully represent the organization's reality. For example, if a business only uses its solar panels to power a portion of its operations, it must clearly communicate this in its marketing messages. Check the Environmental Protection Agency (EPA) website for official guidance on claims about solar power use.
Exaggerated solar energy claims are a form of greenwashing, which happens when a company misleads or lies to consumers about its environmental impact. If a company is found to be greenwashing, it may suffer serious reputational damage and lose its eco-conscious customer base.
Reduced Carbon Footprint
Unlike fossil fuel generation, solar panels do not release greenhouse gases and other pollutants that contribute to global warming. This benefit enables them to offset carbon emissions produced by fossil fuel use, such as in transportation and agriculture.
Solar panels are incredibly efficient at offsetting carbon emissions. In fact, a single solar panel can reduce carbon emissions more than 10 mature trees do. When eco-conscious consumers know the effort a company is making toward shrinking its carbon footprint, they'll be more likely to buy, which can help pad their bottom line.
Credit Toward LEED Certification
In addition to reducing carbon emissions, installing a solar panel system can help businesses work toward obtaining Leadership in Energy and Environmental Design (LEED) certification.
LEED is a globally recognized green building and community certification program. As the most widely used system for rating green buildings in the world, LEED certification carries a certain weight to it — 61% of corporate leaders believe that sustainability helps companies gain a competitive edge.
Other benefits of seeking LEED certification can include:
- Increased productivity
- Higher employee recruitment and retention
- Cost-effective operations
- Improved facility air quality
It's important to note that LEED takes a holistic approach to evaluating a building, so clean energy generation is only part of the certification criteria.
Businesses can also look into obtaining other green building certifications in addition to LEED to further improve their reputation. Each certification has different standards, but all require a genuine commitment to improving the company's sustainability.
3. Solar Panels Are Low-Maintenance
Although solar power is a significant investment, PV panels are easy to care for. At minimum, most experts recommend hiring a professional to perform an annual inspection.
There are several other steps businesses can take to ensure their system is operating at peak performance for years to come:
- Routine cleaning: Buildup of dirt and animal droppings can block sunlight from hitting the panels, which can reduce the amount of energy they can generate. Companies must plan to have their solar panels professionally cleaned once or twice per year to remove any debris and improve performance.
- Clearing vegetation: If their property is located in an area where trees and bushes can get in the way, companies should make sure to regularly trim them back so the panels can have a clear path to the sun.
- Inverter inspection: Although solar panel inverters are designed to withstand extreme environments, buildup of dust and debris can damage filters and fans. Many solar companies allow organizations to add this service on to their annual inspection for a reasonable fee.
- Wiring inspection: Solar panel systems contain thousands of critical connection points, which can loosen over time. Companies should have a professional inspect the system's connection points annually to identify and resolve potential issues before they escalate into necessary repairs.
Finding a trustworthy solar company that operates within budget is essential for an effective preventive maintenance program. Reading online reviews and asking businesses in the same industry can help companies decide which firm to work with.
Invest in Solar Panel-Covered Parking Structures
Solar panels can be installed in various locations, including rooftops, open fields, distribution centers, or anywhere else that receives enough sunlight. However, for businesses with limited space, finding an optimal place to mount solar panels can be difficult.
That's where solar-enabled parking structures come in. Many parking lots are wide open spaces with plenty of direct sunlight. Businesses can take advantage of this space by installing parking shade solutions equipped with solar panel systems.
Some of the top business benefits of solar-enabled parking structures include:
- Energy initiative compliance: Installing new solar panel-covered structures can help businesses comply with government-mandated initiatives such as Denver's Green Buildings Ordinance.
- Longevity: High-quality solar carport solutions are designed to withstand extreme weather conditions, including hail and strong winds. In fact, carport structures are typically more durable than hail netting.
Solutions that combine solar power production with asset protection provide a business with the best of both worlds. Here's why:
Gain Asset Protection
Durable parking shade structures provide asset protection capabilities for businesses in various industries. When combined with solar power, these structures benefit companies with different needs:
- Commercial parking lots: Innovative new solar-equipped parking structure designs can enhance a parking lot's appearance while generating clean energy. These structures can be installed on ground-level and rooftop lots, depending on a business's property and location.
- Auto dealerships: Renewable energy solutions are difficult to implement for auto dealers in areas where hail and other extreme weather conditions are common. Solar-enabled parking structures provide excellent protection from the elements while saving dealers money on utilities.
- OEM facilities: Adding solar-enabled asset protection structures to OEM and outbound vehicle logistics facilities provide durable environmental protection and renewable energy production.
Working with a trusted asset protection company can help organizations maximize their investments. Experienced professionals can work with organization leaders to design custom solutions that address their facility's unique needs.
Get the Most out of a Facility
Depending on a company's location and the size of the property, there may be limited space available for a full solar system. Building parking structures with solar panels helps companies maximize the potential of their available space by performing two functions — covering all important business assets and helping them generate power.
Even if a company only has a small lot to cover, placing panels on that lot can significantly offset some of the company's dependence on the traditional energy grid.
Contact VPS to Learn More About Solar-Enabled Covered Parking Structures
As the world's leading supplier of commercial parking products and solutions, VPS can help maximize space while enabling energy independence. Our representatives have the knowledge and expertise to design a turnkey solution that meets businesses' unique asset protection and power generation needs while staying within budget.
To learn how to save energy with solar power, VPS can help. Contact us online today to request a free quote.