A solar investment is a strategic move for businesses seeking to reduce energy costs, enhance sustainability, and gain energy independence. Although the cost of solar PV systems has risen recently due to supply chain challenges, labor increases, and heightened demand, solar remains a worthwhile investment. The combination of long-term energy savings, diverse financial incentives, and environmental benefits often outweighs these initial costs, making solar an attractive option for commercial and industrial facilities.
Energy Offset & Independence
Lower Utility Bills with Solar Energy
The immediate benefit of a solar investment is the direct energy offset seen on the utility bill. Many commercial and industrial facilities consume large amounts of energy on a daily basis. An on-site solar system—whether rooftop or ground mount—can provide a portion of that energy and reduce the total electricity purchased from the utility. Depending on the size of the system and the facility’s energy usage, a solar investment can offset anywhere from a small portion to the entirety of daily consumption. As an added bonus, some utilities even offer net metering programs that let you feed excess energy back to the grid, earning credits or payments for surplus solar production.
Benefits for Facilities
Solar investments are particularly helpful for facilities that are subject to peak demand charges. Electricity used during peak demand is billed at a higher rate than regular usage, so even a small decrease in the peak will result in a noticeable reduction in the final cost to the customer. Peak hours for commercial and industrial applications tend to be during the workday Monday through Friday. Consequently, the daytime is also when a solar system produces the most amount of energy – therefore on-site solar becomes a logical pairing.
Energy Backup Options
Additionally, with a solar PV system, a facility has more energy independence and can be protected from utility grid power outages. With the right sized system, solar can provide critical power to keep important operations running and avoid costly downtime. Since most commercial and industrial businesses operate during the day, this can be a good backup source of energy. If your facility also operates at night, you may want to consider battery energy storage or a different type of backup system.
Tax Credits & Financial Incentives
There are a number of tax credits and financial incentives available for businesses to encourage solar investment and adoption. The federal government recently passed the Inflation Reduction Act in August, which increased the Investment Tax Credit (ITC) to 30% until 2032 and expanded eligibility for non-taxed entities. This opens the door for cities, counties, and non-profits that may not have been able to afford solar before. Commercial and industrial customers can also take advantage of the Modified Accelerated Cost-Recovery System (MACRS) to recover their solar investment through accelerated depreciation deductions.
State and Local Incentives
Individual government agencies offer special provisions for renewable energy as well. The US Department of Agriculture offers the Rural Energy for America Program (REAP) which provides grants and loans to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. The Small Business Administration offers 504 Grow loans that allow for an extra half million dollars of debenture if the building offsets energy consumption by 10% with renewable energy.
On top of the federal incentives, many states have their own tax credits and programs that can offer further savings on the initial investment. South Carolina specifically has a 25% corporate tax credit for solar energy systems that is paid out over ten years. Select utilities also have solar programs that buy excess electricity from the customer at a predetermined rate.
Depending on the type of business and financing structure, you can find numerous incentives that apply to your project. Many of these can also be combined for maximum savings. Work together with your project contact and your finance team to take advantage of every available incentive – you will be surprised by just how many there are.
The Long-Tem Benefits of a Solar Investment
25-Year System Life Expectancy
A solar investment is a long-term cost savings strategy. Partnering with a solar EPC like Colite Technologies ensures that your system is designed with efficiency, durability, and reliability in mind. The selected equipment and components are built to meet industry standards and deliver consistent performance. A typical system lifespan is around 25 years, meaning it will continue to produce its rated amount of electricity for decades. Each component includes its own warranty, typically ranging from 10 to 30 years, with the first major replacement often occurring around year 10. Many providers also offer long-term operations and maintenance plans to handle upkeep and repairs, protecting your solar investment for years to come.
Building a Sustainable Reputation
Furthermore, solar panels are one of the most easily recognized renewable energy equipment. Customers and visitors can quickly identify a solar system and know that your business is using green energy. We have seen that Millennials and younger Gen Z are more likely to buy from and work for companies that have sustainability and/or climate goals; as they move into the workforce and take on decision-making roles, their influence will continue to increase.
It is also becoming more common to see large corporations extend sustainability requirements to their suppliers and partners. Whether from governments or board members, many companies are facing pressure to become carbon free, carbon neutral, or even carbon negative. These companies’ spheres of influence are wide; as a result, Tier 2 and 3 suppliers along the supply chain are also seeing the need to reduce their environmental footprint to continue working with them.
Solar remains a cost-effective alternative to energy sources that produce carbon emissions and is easy to implement. Onsite generation directly offsets a facility’s energy usage while increasing independence from the utility and supports a sustainable reputation for years to come. With various tax credits, grants, and loan programs for renewable energy, total project costs can be significantly decreased. As investment in solar technology grows in the future, projects will see improved equipment, greater efficiencies, and major savings.
Take a look at one of our solar projects in Atlanta, GA. What could solar do for your facility?