With the threat of inflation and a looming recession, it’s a smart move as an entrepreneur to seek innovative ways to save money and cut costs. Considering using solar energy for your business just makes a lot of sense. This is especially true if you’re looking to save money since electric bills account for the most significant expenses for companies of any size.
> In the US, over $60 billion annually goes to energy expenses.
> Commercial properties spend an average of $2.10 per square foot on utility costs.
(from Integrity Energy)
In 2022, consumers in the US experienced the highest jump in their electric bills since 1981. And although energy costs continue to increase at unprecedented levels, the country’s electric grid is “ becoming less dependable.”
How much do power outages cost commercial establishments? According to the Department of Energy, businesses lose a whopping $150 billion annually because of power loss. This is probably why you may have heard that the nation’s largest corporations, such as Microsoft, are leaning towards using green, renewable energy like solar power. And even if you run a medium or a small company, you can definitely yield the benefits of using solar power.
Advantages of Solar for Business
Significant Financial Savings
Yes, installing solar panels will require some upfront investment, but it will provide you with huge savings on your electric bills in the long run. Data from EnergySage suggests that commercial establishments using solar power can lower their total energy expenses by up to 75%. So, if you’re paying $1,950 each month on electric bills, it is possible to reduce that to just around $500 – a massive cut in your energy costs!
On average, you can repay solar installation costs with your monthly energy savings within three to five years. This means the years after that (most solar panels are made to last for 25 years) are pure profit for your business.
More Affordable than Ever
With more homeowners and business owners opting to go solar, the industry has expanded and deployed thousands of installations throughout the country in recent years. Because of its growing popularity, the cost of installing a solar system has substantially declined by over 60% in the last decade. This only means that even medium or small enterprises can now afford to have solar installed for their business and enjoy its benefits.
Solar Tax Credits and Other Incentives
On top of cutting energy expenses, there are rebates and tax credits you can take advantage of when you use solar energy for your business. A few of these solar incentives include:
This is a federal investment tax credit offered to homeowners and businesses that installed solar systems on their properties. Business owners can deduct 30% of the amount of their solar project investment on their federal income, offsetting what they actually owe in taxes to the IRS. Click here to learn more about the ITC.
There are a couple of tax incentives, on top of the federal ITC, that business can benefit from based on their state. Arizona and Colorado, along with 23 other states offer sales tax exemptions that help lessen the upfront costs of the installation of a solar system.
There are also property tax exemptions for solar energy currently offered by 36 states. This tax exemption allows businesses as well as homes to excluse the added value of a solar ststen from the valuation of their property.
There are currently 25 states that offer additional tax credits on top of the ITC. These state credits are much like the federal ITC, but it applies to state taxes. The amount of tax credits varies depending on the state.
You can check what incentives for solar energy are offered by your state in this database.
Businesses using solar energy are entitled to another program by the federal government, which is the MACRS. This initiative allows commercial establishments to write over the total asset value of their solar system in five years. The MACRS can be combined with the ITC and can be claimed on top of state incentives if they are available in your area. For more information about this incentive, you can read more about it here.
**For more detailed information visit: energy.gov website and read the Federal Solar Tax Credits for Businesses which gives links that you and/or your tax advisor can use to get just the exact forms/information necessary to claim your US federal solar tax credit. Nature’s Generator does not guarantee that you will qualify for this tax credit and any information we provide is solely for educational purposes and should not be considered legal advice, professional tax advice, nor financial guidance. Consult a licensed tax professional to fully evaluate your eligibility for this tax credit. If you qualify, then it is a great program to help you save money on a solar (EV) system.
Reduced Reliance on Local Grid
Power interruptions are no longer a surprise for Americans. In fact, according to reports from the U.S. Energy Information Administration, an average electric consumer in the country experienced seven hours and 20 minutes of power outages in 2021. No wonder businesses in the nation lose billions because of power loss.
Extreme weather events due to climate change, plus the nation’s aging power grid, are the major causes of widespread power failures in recent years. By installing a solar system, you can protect your business and continue your day-to-day operations without worrying about the volatility of the local grid.
Even if you don’t become fully self-reliant and use solar generators only as backup power, you’ll still have a dependable energy source, so your business operations could go on as usual, no matter the situation with your utility provider.
Turn into a Green Business
Using solar is a great way to start turning your company into an environmentally-friendly business. Besides solar incentives and significant cost savings, and of course, helping reduce global warming, renewable energy also positively affects your brand. Studies show that a business going green makes consumers feel that the company is credible and trustworthy (92% of Millennials are more likely to trust a brand that supports social/environmental issues). Using solar for business can actually gain new patrons and distinguish you from the competition.
Is solar worth it for business?
Although installing a solar system for your business may seem like a considerable investment, the benefits you can reap from it definitely outweigh the upfront costs. Long-term savings, tax credits, and incentives, independence from the local grid, and being an eco-friendly brand make solar for your business worth it.
If you’re looking for a tried and tested option for your solar installation, you can check out Nature’s Generator Powerhouse range which are suitable for small businesses. Our systems are designed to be expandable – you can add solar panels, wind turbines, Power Pods, and more so you can harness more power to fit your needs.
If you have questions or would like to know more about our solar generators and eco-system, don’t hesitate to reach out to our customer support representatives.
* We want to give credit where credit is due. Professional writer, Ishna Sablaya, contributed research and content to this blog titled: Solar Energy for Business Thank you, Ishna, for your contributions!