Investing in Solar Energy: A Smart Business Choice

 

Business Solar Energy Systems

Major corporations like Wal-Mart install solar energy systems to help offset costs. This can also be a great option for small and medium-sized businesses.

As a small business owner, you may enjoy the thought of “going solar” to save on energy cost and reduce your store’s carbon footprint. You may also feel that installing a solar power system is a luxury reserved for well-funded corporations like Wal-Mart, Kohl’s, or Google. While this used to be true, the declining cost of solar PV equipment and major cash and credit incentives make choosing solar energy an excellent (and wise) business decision for even small and medium-sized business owners.

Thanks to better technological advances in the solar industry during the past decade, the price of creating and installing a commercial solar energy system has lowered allowing many small firms to “see the light”. With a number of federal and state rebates and incentives sweetening the pot, many small business owners are seeing their solar energy system pay for itself within as little as 5 years.

So, what exactly is the cost of “going solar”? While it seems like a simple question, it is not about comparing “apples-to-apples”.  Upfront costs will depend on your power needs, the size of the system you choose, the weather in your local area, and what government incentives are available to immediately defray the costs of purchasing a solar power system. In order to get an idea of how state rebates and deductions can save massive amounts of upfront capital, we can take a look at a case study.

The owners of the Shelter Island Ace Hardware store in Shelter Island, N.Y. bought and installed a system for $58,500. The owners immediately got a utility-company rebate of $21,840, approximately $11,000 in federal tax credit, and a one-time $18,550 accelerated depreciation charge that lowers the store’s taxable income This brought their out-of-pocket expenses to about $7,000. With a cost of about $.18 per kw for electricity, the store’s system would pay for itself in about 3 to 5 years. For David Gurney and Meredith Page, the owners of the store, it only made sense to go solar.

If profits aren’t the only thing that drive your company, reducing your carbon footprint without squeezing your margins makes solar energy a wise business decision. Some companies, like SunRidge Farms in Pajaro, CA, have installed solar energy systems for ecofriendly reasons, and have been able to avoid carbon dioxide emissions that would be the ecological equivalent of planting 1,800 acres of trees. Many customers appreciate environmentally-friendly products & companies, and will build brand loyalty based on this fact alone.

If your small business doesn’t have thousands in free capital available to outright purchase a solar energy system, there is no reason to think you’ll never be able to go solar. Many financiers are realizing the value of solar energy and are giving out financing and loans for the initial investment. Stephen Nicholls, of Mueller Nicholls Builders in CA, has financed his solar energy system but says that the amount he spends on his monthly loan payment is equal to what he saves on his electricity bill every month. Nicholls was able to go solar without increasing his monthly expenses, and in 5 years when his loan is paid off, he will be saving a great deal of money thanks to his solar energy system.

It’s a great time to start investing in solar energy as most of the incentives, rebates, and tax credits will be available through 2016. Check with your state and local government to see what programs are available and start crunching numbers to see how much your business could save by making the switch to solar. The important thing to focus on is the return on investment and learning what the savings could bring you in the coming years. Once you realize the impact that solar energy has on the environment along with your wallet, you’ll see that it is a great business decision.

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