How to Solar Power a Business

05.24.22

How to Solar Power a Business

One of the biggest expenses many businesses have to deal with is the cost of energy. Whether the electricity that powers a company comes from coal, nuclear, natural gas, or wind, the odds are likely that energy bills are higher than company owners want them to be. 

Traditional energy sources, notably those that use fossil fuels, also have a negative impact on the planet. The burning of fossil fuels for energy releases nitrogen into the atmosphere, which contributes to smog and acid rain formation. Today, people burn around 4,000 times more fossil fuels than they did in the 1700s, contributing to climate change and rapidly depleting non-renewable resources.

Fortunately, there are better options available for generating electricity and delivering energy to a business. Solar power energy for businesses offers many advantages, from reduced costs to an improved reputation. Learn more about how to solar power companies and the reasons to do it.

Ready to start transitioning your business to solar power? Contact our team for solar hail protection structures to kickstart the process. 

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Importance of Switching to Solar Power

In April 2022, the United Nations (UN) released a new report highlighting the importance of reducing carbon emissions and altering global energy policies and usage. According to the report, the world needs to act “now or never” to keep global temperatures from increasing by 1.5 degrees Celsius — or 2.7 degrees Fahrenheit. The report urged action to reduce greenhouse emissions while noting that the right changes to infrastructure, technology, and policies can help reduce greenhouse gas emissions by up to 70% by 2050.

One way to cut emissions is to have more and more businesses switch to solar power. 

In addition to helping reduce emissions, switching to solar power helps companies save money, and it can offer tax incentives.

Help reduce emissions

How Solar Power Works

Solar power turns energy from the sun's light into usable electricity. One and half hours of sunlight on the earth's surface produces enough energy to power the entire globe for a full year. Capturing that sunlight lets businesses generate electricity, reducing reliance on fossil fuels. 

Two methods of capturing solar energy and converting it into electricity exist. The first is photovoltaics (PV), which is the process used by solar panels. Sunlight shines onto the solar panels, which contain PV cells. Those cells absorb the light's energy, producing electrical charges. The charges respond to an electrical field in the PV cell, producing a flow of electricity.

PV cells aren't very large. Each one usually produces one or two watts of power. They are made of semiconductor materials, such as silicon. A semiconductor has less electrical conductivity than metal but more than an insulator. Silicon is often the semiconductor of choice for PV cells because it's an abundant material that also does a phenomenal job converting energy into electricity. 

Since PV cells are small, they need to be linked together, creating panels or modules. Panels are often connected together into arrays, which get attached to the power grid, creating a complete system. The modular structure of PV solar panels means that systems can be designed and built to meet large and small power needs. 

In some cases, when a business installs a PV system, the system ends up generating more electricity than the company needs for its own use. The excess electrical energy can be used by the rest of the power grid, supplying electricity to neighboring businesses and residences. As a result, the system as a whole becomes less reliant on fossil fuels and non-renewable electricity sources. The business can also store excess energy to use later and rely less on utility companies.

Reasons to Switch to Solar Power for Businesses

It seems across the country and around the world, businesses are switching to solar power. Companies ranging from Amazon to IKEA, Walmart, and Apple have embraced solar energy. Smaller businesses are also making the switch. Going solar offers multiple benefits to companies that decide to use it. Take a look at a few reasons to install solar panels and start tapping into the sun's energy.

1. Reduced Utility Bills

Going solar can significantly reduce a company's electricity bills. The average commercial utility bill across the United States is over $600 per month, though many businesses spend more depending on their size and operations. Switching to solar power can cause that bill to drop by about 75%. So if a company paid the average, around $600 monthly before going solar, its bill could drop to around $150 per month. 

Reduce utility bills

Making the switch to solar can also free businesses from the whims of the local electric company. Across the country, the costs of utilities like energy are increasing, leading to higher bills for customers. Once a company starts generating its own electricity through solar power, it no longer needs to worry as much about price increases and how those increases will affect its budget, especially with off-grid solar power generation.

Reducing a company's electricity bills can help it make plans for its growth and future. Since companies can worry less about rising energy costs, they end up in a better position to make plans for where they want to go and invest in their operations.

2. Environmental Benefit

Solar and other types of renewable energy are good for the planet. The sun's light is an infinitely renewable resource, as long as the sun continues to shine. While some areas of the planet see more sunlight than others, it's possible to capture energy from the sun even in regions that are cloudy or have few hours of sun daily.

Another way that solar power is good for the environment is by limiting the production of emissions. When a business uses sunlight to create electricity, it doesn't have to burn as much fuel. Burning fossil fuels produces gases that create a greenhouse effect, increasing the temperature of the atmosphere. Because solar power produces no smoke, there's also no air pollution created.

Most fossil fuels are non-renewable. Once their reserves are depleted, they're gone. Using renewable energy sources provides a company with an alternative and makes it more prepared for the day when fossil fuels are no longer readily available. 

Environmental benefit

3. Improved Business Reputation

Green is a good color for many businesses. Installing solar panels and making the switch to renewable energy sources can improve the way consumers view a company. 

For many consumers, a business's practices and ethics matter more than how it prices its products. A company can win over new customers and keep their current ones by going solar then advertising its solar power initiatives. 

Customers expect a lot from companies regarding environmental protection. More than three-quarters of consumers expect businesses to do something against climate change. Nearly 90% of people are likely to purchase from a business that takes a stand about an issue the consumer cares about. Perhaps most importantly, 73% of consumers would stop doing business with companies that don't care about sustainability. 

Improved business reputation

Getting current customers and potential consumers to see the company's perspective is key for ongoing success and business growth. Going solar helps businesses retain and win over customers.

4. Almost No Maintenance Needed

Solar panel systems are fairly low maintenance. They also have a long life span and can last for decades. 

For the most part, companies don't need to do anything to take care of their solar panel systems. They don't have to adjust the panels or replace any parts often. The only maintenance task required is to clean the surface of the panels regularly, but that's only if a business is located in an area that doesn't get a lot of rainfall.

Otherwise, rain will usually be sufficient enough to wash away any dust and debris that accumulates on the panels. The angle of the panels is also high enough that dust and debris slide off when it rains. 

A solar panel system typically has a warranty that protects it in case the panels malfunction or stop producing sufficient energy. The warranty can vary from system to system, such as a 25-year warranty that guarantees that the power supply won't dip below 85%.

Solar panel warranties

5. A Good Return on Investment

The initial price of going solar seems high, but generally, installing a solar system provides a good return on investment (ROI). Companies offset the cost of a system in several ways. First, the reduced cost of electricity helps companies see a return on investment. Businesses can also depreciate the cost of the system on their tax returns, reducing their business's tax obligations. Finally, tax credits are available for purchasing and installing solar power.

6. Tax Credits

Corporations that file a federal income tax return can claim a tax credit for a portion of the cost of installing a solar PV system. Initially, the credit was worth 30% of the cost of the system, but that program has now expired. In 2020, Congress voted to extend the Solar Investment Tax Credit (ITC) through 2024.

Companies that begin construction on a new system in 2022 can claim up to 26% of the cost as a tax credit. If the project begins in 2023, a business can claim 22% of the cost

Tax credits for solar panels

Businesses need to meet certain requirements to be eligible for the ITC. The solar PV system needs to be located in the U.S. or its territories. It also needs to use new equipment and can't be used to heat a swimming pool.

To calculate the value of the ITC, multiply the percentage that applies to a project by the amount invested in eligible equipment and property. Property that's eligible for the credit includes solar panels, wiring, inverters, and balance-of-system equipment. Include sales tax when calculating the credit. Installation and indirect costs can also qualify for the tax credit. 

If a company received a rebate for a solar PV system from a state government, it can include the value of the rebate when calculating the tax basis and the credit amount. In most cases, a rebate from the utility provider is exempt from rebates, meaning companies would need to subtract that rebate from their costs before calculating their tax credit.

Questions Businesses Should Ask Before Going Solar

Companies that are ready to go solar need to consider a few things before they purchase and install a solar PV system. Some questions to ask before going solar include:

  • How much space is available for the system? The number of solar panels installed influences the amount of energy the system will create for a company. Some commercial enterprises, particularly larger businesses, are happy to have a small portion of their total energy produced by solar, such as 1% or 2%. Smaller companies can install systems that produce the majority of their electrical power. To do that, a company needs plenty of space.
  • Where should the company install the system? Roofs are common locations for solar panels, as are large, empty fields. If a business has an expansive covered parking area, it can make sense to integrate the solar power system into the parking lot. Solar parking structures are multi-taskers. They harness the sun's energy to power operations while protecting employees' or customers' vehicles from hail damage.
  • Should the company lease or buy? The price of solar power systems has dropped 89% over the past decade, and tax incentives help make purchasing a system even more affordable for a company. But there are cases when leasing a system is the way to go. Think about leasing a solar power system as if the company is paying for the power generated rather than for the equipment itself. Depending on the terms of the lease, it can be more or less expensive than using the electricity from the local utility company.
  • Which solar provider should the company work with? Many solar power system installation companies are out there, providing differing levels of service and quality. It's critical to partner with a company that meets a business's needs and that stands behind its work. Depending on a company's needs, working with a solar power company that offers design, fabrication, installation, and finishing services makes sense. Essentially, the company should be there to answer any questions and guide a business through every step of the solar power system installation process. 

Ways to solar power a business

Ways to Solar Power a Business

Another thing to consider when choosing a solar power system is the type of connection the system will have. A new solar power system can stand on its own or be connected to the local power grid:

  • Off-grid: With an off-grid solar panel system, the system stands completely on its own. It provides power to a business independently of the local electric utility. Usually, off-grid systems need to be a substantial size, as they need to generate enough power to keep a company operational and have enough storage capacity to retain any excess energy. An off-grid system is ideal for a business that wants to be truly energy independent.
  • Grid-tied: The majority of solar panel systems are grid-tied and for good reason. A grid-tied system connects to the local electrical grid. It uses energy from the sun but can also tap into energy from the electrical grid when there isn't sufficient sun power. For example, if the company is based in an area that only gets a few hours of sunlight a day, it'll need to use some of the local electric company's power. If a system produces more energy than the company uses, the business can sell the excess to the power company.
  • Grid-tied with energy storage: The third type of solar power system includes energy storage, usually in the form of solar batteries. With an energy storage system, a company can tap into the energy stored in the batteries and use it when there isn't enough power from the sun. A grid-tied system with an energy storage option helps businesses avoid purchasing power from the grid, which saves them more money. Businesses can also rely on a grid-tied system with energy storage to keep the power up and running during an outage.

Solar Panel Covered Parking Structures

One way to go solar at a business is to integrate solar power into structures it already needs and uses. For example, if a company needs to protect vehicles from hail, it can be worthwhile for it to choose parking structures with built-in solar panels. 

Solar panel covered parking structures offer multiple benefits for businesses. The solar panels create electricity, which a company can use to power its buildings and save on its electric bills. The parking structures can also help it earn Leadership in Energy and Environmental Design (LEED) certification. By installing parking structures with solar power, companies can earn points for the on-site renewable energy credit. 

Going solar with parking structures can also make a building project more appealing to lenders or other funding organizations. Some organizations offer extra financing to companies that invest in green initiatives. 

Depending on a company's location, choosing to install solar panel covered parking structures can also help it comply with any solar initiatives or mandates. 

Installing parking structures

Solar parking structures make a company more appealing to customers, too. People are more likely to leave their cars in areas that offer protection from hail. If a business sells cars, it wants to make sure they are in the best condition possible before customers drive them off the lot. 

Additionally, customers are more inclined to work with a company that is taking steps toward more environmentally conscious programs. Solar panels can be a selling point when advertising a company's products and services.

Who Can Benefit From Solar Panel Covered Parking Structures

Companies in a wide variety of industries can benefit from installing parking structures with built-in solar panels. If a business has a parking lot connected to it, installing parking structures can give its customers peace of mind while generating energy. 

Solar panels can be a particularly attractive feature if a business is trying to show off its energy efficiency and eco-friendly credibility. A dealership that specializes in the sale of electric or hybrid vehicles can install parking structures with solar panels to demonstrate its commitment to green energy. 

The parking structures can also be beneficial for municipalities that want to encourage residents to embrace green living and green programs while offering amenities and services to residents. The structures give people a safe place to park while creating energy for the area to use.

Get Hail Protection and Solar Energy With VPS Shade Structures

VPS helps businesses that want to go solar and provide hail protection. We're a leader in large-scale hail protection structures and also specialize in solar panel covered parking structures. We'll work with companies to create a parking structure that's right for them and that meets all of their needs. To learn more, contact us today.

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