Why Commercial Solar Is a Good Investment For Your Business

Commercial solar is an excellent way for businesses to bolster their ESG (environmental, social, and governance) initiatives. In addition, it reduces energy costs and helps companies recoup investment quickly.

The federal solar Investment Tax Credit is a major financial incentive that’s available to all qualified enterprises. Additionally, bonus depreciation and net metering can add to your solar savings.

Cost-Effectiveness

Commercial solar is a great way for businesses to reduce energy costs and become more sustainable. Although upfront costs may be a concern, the long term savings and benefits will quickly offset any initial investment.

The cost of a commercial solar system depends on its size, the type of panels used, and location. The amount of electricity it generates will also affect its cost per watt.

Incentives and financing options can help reduce the upfront costs of a commercial solar system. These include the federal Solar Investment Tax Credit, state and local rebates, and performance-based incentives like MACRS depreciation. These can help cover 45-80% of the system’s total cost.

Additionally, the use of solar panels can be a great way for a business to showcase its commitment to sustainability and corporate social responsibility. This can help increase brand recognition and attract more customers.

Environment-Friendly

Commercial solar is a clean, renewable source of electricity that can help businesses save on energy costs in the long run. It also helps organizations to reduce their carbon footprint and mitigate climate change, while meeting important sustainability goals.

By switching to solar, companies can lower their environmental impact and improve their brand image by demonstrating their commitment to sustainability. This eco-friendly stance resonates with environmentally conscious consumers, who prefer to support green businesses.

Solar energy systems use photovoltaic cells to transform sunlight into electricity, reducing the need for fossil fuels and other polluting energy sources that contribute to air pollution. Additionally, solar systems can eliminate the need for backup generators, which often emit harmful exhaust.

In addition to lowering overhead electricity costs, solar can create additional revenue streams through local programs that offer rebates or incentives for businesses that generate their own energy. These additional benefits can help offset initial capital expenses and increase the financial return of commercial solar.

Long-Term Investment

A commercial solar panel system can be a great investment, especially when your business qualifies for the federal tax credits and bonus depreciation. This tax benefit allows businesses to deduct 85% of the value of their solar systems from their taxes, significantly offsetting the upfront cost.

Using renewable energy also helps protect your business from volatile electricity prices. If your company relies on the commercial power grid, you may be subject to electric rate spikes during peak times due to seasonal or supply shortage costs. But if your business is self-sufficient on solar power, you’ll be immune to these price fluctuations.

If your business does not have enough cash on hand to invest in a solar power system, you can consider a power purchase agreement or an operating lease. With a PPA, a third-party solar developer will own and operate the system. They’ll provide your business with electricity at a lower, fixed rate for a set period of time, usually between 10-25 years.

Lease Agreement

Many customers who want to benefit from the cost-saving benefits of solar energy choose to finance their system with a lease agreement. These agreements, like PPAs, are third-party owned and offer a fixed rate for the duration of the contract. However, a customer should carefully consider the terms and conditions of any solar lease.

One important issue to consider is the escalator clause. These agreements can last for decades and customers should make sure that the escalator is based on reasonable assumptions about future utility rates. This will minimize the chance that a customer someday ends up paying more for power from their solar energy system than they would have buying it from their local utility.

Additionally, solar leases should contain a provision that ensures that equipment will be removed in a timely manner after termination of the agreement. This includes ensuring that costs for cleaning and restoration of the rooftop will be covered by the landlord.



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