Small businesses could benefit significantly by installing solar panels in their offices. You may benefit from sizable tax credits and money-saving opportunities. Solar panels are more environmentally friendly, attracting potential customers and employees. They may even enable you to generate income by selling surplus energy to utilities.
In this article, we have put up a list of advantages and disadvantages unique to solar energy for businesses to help you decide whether or not solar is good for you. You can use these to help you understand if solar power suits your company.
The importance of solar energy
One of the best energy sources for the environment is solar energy. For instance, coal and natural gas are two other means of generating power, but they have long-term effects on the environment. These processes cause carbon dioxide emissions, which aid in climate change.
You are using plentiful, sustainable, and renewable energy by changing to solar. The rate at which the Earth intercepts solar energy is about 10,000 times greater than the rate at which humankind consumes power.
Additionally, solar energy costs 70% less than it did ten years ago. More effective systems have been produced due to advances in solar panel technology. Public support for solar power has been growing, making it a popular choice for business owners to fuel their businesses. Below we will examine the pros and cons of using solar energy for your business.
What are the pros of solar energy?
1. Lower electric bills for your business
You will significantly reduce your energy costs if you switch to solar power. Some companies experience a decrease in energy costs of up to 75%. According to one survey by A1A Power, the typical commercial property owner pays $2,000 per month for electricity. For those that adopted solar power, they spent $500 per month. That is a 75% reduction in energy costs!
Your electricity is accessible once the cost of buying and installing solar panels has been settled. The sole exception is when there isn't enough sunshine to produce electricity, such as on cloudy days. During those days, you could use standard electricity as a backup. Also, you should know that the captured solar energy will be stored in battery systems for use in overcast or dark conditions.
2. Great tax incentives
The government appreciates solar's positive environmental effects. They are significantly reducing the cost of solar energy to encourage more enterprises to adopt it.
Through a federal tax credit, the Solar Investment Tax Credit (ITC) enables businesses to recover 26% of the cost of their solar system. However, this incentive will drop to 22 percent in 2023 and 10 percent in 2024. You can miss out on a significant amount of money if you put off installing solar.
Tax Cut and Jobs Act of 2017 brought 100% bonus depreciation, another tax-saving benefit. This tax benefit enables you to front-load your investment in solar energy even more by accelerating all federal depreciation savings to the year your system is put into service.
3. Improves your business value
Many consumers and employees today think about how their purchasing habits affect the environment. One method to demonstrate your commitment to sustainable company operations is installing solar panels. Depending on your customer or employee profile, it may be wise to mention your solar panel installation in your marketing strategy. Sustainability in business has become a topic of interest for both customers and employees.
Having sustainable practices is now a very attractive plus in every angle you look at, and your audience is looking at carbon footprints more than ever. Carbon footprint is the number of greenhouse gases that activity produces. It's often measured in tons of carbon dioxide (CO2) that the action produces. The annual CO2 production of the typical small business ranges from 11.6 to 23.3 tons.
Because solar panels create electricity without emitting any emissions, they help you lower your carbon footprint. Solar panels aren't entirely carbon neutral because carbon dioxide is produced during their production and transportation, but they are recyclable.
4. Solar is consistent, maintenance-free, and reliable
A solar power system will require little to no maintenance after installation, mainly if no batteries are in use. The system will deliver electricity for 25 to 40 years without noise or pollution. A 25-year warranty is typical for solar panels; they have a lifespan of 30 years, which shows how reliable they are.
Also, once installed and configured, solar panels are incredibly dependable and require little maintenance. Solar panels don't make much noise or be overbearing like other energy sources. Solar energy is plentiful, even though it can be impacted by night, location, and weather.
What are the cons of solar energy?
1. High investment costs
For many small businesses, the upfront cost of solar installation is one of the most considerable obstacles to changing to this energy source. Although prices have significantly decreased, it still requires a sizable investment.
Installation costs for a 100 kW system, which generates roughly enough electricity to offset a $1,200/month electric bill, can range from around $220,900 before tax credits to about $107,598 after. Nevertheless, many commercial solar systems generate a double-digit ROI and pay for themselves in a few short years.
2. Solar is not for everyone
For the majority of rooftops, solar panels will work well. However, installation prices could be significantly higher depending on the nature of your roof. For example, installing panels on a roof with a steep slope will call for extra caution. On the other hand, a flat roof can have drainage problems. You must consider where your roof is facing, obstacles, structures, and your business's environment.
Before installing panels, technicians advise finishing any urgent roof repairs. For many organizations, the expense of roof maintenance or replacement and the price of solar panels can be too much. There are other alternatives to rooftop panels, but you must consult an expert first.
3. Lower electricity costs could mean fewer savings
If your electricity costs are already cheap, then the savings from solar energy won't be as considerable and beneficial. The initial cost of obtaining and installing solar panels would take longer to pay for themselves. For this reason, some business owners decide it's not worth the significant up-front expense.
You should consider this with your team and see if all the further benefits outweigh the fewer savings issue. For instance, being a "green" company, as we mentioned, could be important to your customers or employees. Those two critical groups directly correlate to your company's performance, making it a worthwhile investment. According to a Unily, an intranet company study, 83% of workers felt their employers were not doing enough to become green and tackle climate change.
4. You have to consider your long-term plans
Going solar in your business is a decision that has to be considered a wise long-term investment. Your system may need a few years to generate enough electricity to cover its cost. But when it works, it produces pure savings, allowing you to keep the money in your pocket or put it to use somewhere else.
You might want to wait until you're comfortable and sure of your location, so you don't relocate your business in a few years after installing your solar system. A solar system will pay off if you stay in your building longer to use the free electricity.
Should your business invest in solar?
Despite its many advantages, solar energy isn't right for every business. It costs a lot to set up, and finding a reliable installation can be challenging. If your electric cost is low, making a move might not be worthwhile.
Going green will reduce operating expenses and serve as a great PR and marketing tool. An environmentally responsible image is suitable for any company, as it can generate a positive response from consumers.
So if you have made up your mind and are looking at financial options so you can invest in solar energy, One Park Financial is here to help! If you have been in business for three months or more and generate at least $7,500 in monthly revenue, get started today!
Disclaimer: The content of this post has been prepared for informational purposes only. It is not intended to provide and should not be relied on for tax, legal, or accounting advice. Consult with your tax, legal, and accounting advisor before engaging in any transaction.