If you’re a business owner, adding solar to your business might seem like a risky move in today’s market. However, thousands of smart business owners have discovered that commercial solar systems are a great asset to their businesses.
Solar isn’t just for the Fortune 500 companies anymore. Businesses of all sizes are benefiting from the financial rewards of installing solar. Below are 6 benefits of commercial solar no matter the size of your business.
Capitalize on Tax Credits and Incentives
The Federal Investment Tax Credit is the most significant benefit for anyone looking to go solar for their business. Commercial business owners of newly installed solar systems get a federal tax credit for 30 percent of the cost of the system.
In addition, some states also offer additional tax credits and government grants for going solar. These incentives can drastically reduce the upfront cost of your system and accelerate payback for a better return-on-investment.
Take Advantage of Accelerated Depreciation
In addition to the government incentives, the Federal Modified Accelerated Cost-Recovery System (“MARCS”) allows businesses to deduct 85 percent of the value of the solar asset from their taxes. This provides another significant offset to the upfront cost of a solar array.
So while your company will receive cash flows from a solar power system for upwards of 20 or 25 years, the total value of that system (in terms of upfront costs) will be taken out of gross income over the five-year period allowed by MACRS. Resulting in a lower tax liability over the initial five years the system is installed.
Reduce Your Building’s Operating Costs
According to an article in Forbes, you don’t have to have a solar array to save money with solar. Small changes like using solar signs and lighting, or switching to solar water heater can help your bottom line.
However, installing a solar system can dramatically reduce your operating expenses which can have a ripple effect throughout your company.
Regardless of whether you pay for your solar system up front or lease it, corporate utility costs will significantly decline to the point where the savings can more than pay for the solar system.
As you can see in this example of a real commercial solar system analysis, this business owner ends up saving almost $500,000 in utility costs and has a cash benefit of almost $400,000!
Hedge Against Rising Utility Rates
In addition to lowering your operating expenses, solar power can protect your business from volatility in the energy markets. Within the last 10 years, electricity rates have increased by 34%.
With continued volatility in the Middle East, dwindling resources and an aging infrastructure at home, consumers may be looking at even higher rates over the next decade.
By investing in solar power, you can protect yourself against these increases by producing your own electricity. By guaranteeing your business a certain electricity rate with solar, you can take the variable nature out of your utility costs and categorize it as more of a fixed expense, providing for a more predictable and stable balance sheet.
Increased Property Value
Incorporating solar power into your business can dramatically increase the economic value of your property.
Renewable energy systems are known to increase resale value by $20,000 for every $1,000 in annual electricity savings.
In some states, solar power systems are also exempt from sales tax and property tax increases. By investing in solar power, you not only boost the economic value of your property but also make it more attractive to investors who might be willing to pay a premium for a building that is economically and operationally efficient.
Improve Your Brand with a Greener Image
You’re sending a positive message about sustainability and support for the community, country, and planet with the installation of a solar system. Think of the great PR you generate every time customers, employees, neighbors, and shareholders see solar energy panels on your property.
Go solar to protect the environment and improve how everyone in the community sees your company.
Whether you own a small building or large corporation, choosing solar power for your business can make a big impact; not only for the environment, but on your bottom line.
Why not get started and experience the benefits of solar energy this year? As a trusted solar energy company in Idaho, we can help you take advantage of all the benefits of solar energy for your business.
Contact us today at 208-530-2393.