Clean energy is not just for big corporations with enough funds to make decisions solely for the environmental good. For many small business owners, going solar may be a strategic choice with significant financial benefits. If you are wondering if solar is a feasible option for your business ask yourself these 4 questions.
- How much do you pay for electricity?
By some estimates, the average commercial real estate owner saves 75% on their electricity bill by switching to solar, but there are a lot of online resources available to estimate how much cash your company can save on its electricity bill each month. This information can also help you determine your payback period, or the amount of time needed to break even on your solar investment. The higher your electrical bill, the less time it takes for the system to pay for itself, so companies operating in places with high electricity rates can realize considerable financial gains from investing in solar PV.
- Choose your equipment wisely
On the other hand, you may realize that the most expensive panels don’t necessarily translate into the greatest savings for your particular needs. Be certain you’re working with a solar supplier who will help you navigate your many choices based on purchase and installation costs, energy capacity, and how long your solar panels are expected to last.
- Evaluate your financing options
Solar can be a smart investment with a strong rate of return, but funding a solar energy system is a complex process with many variables. Cash purchases yield the greatest savings at the greatest upfront cost. Those interested in reaping the benefits of ownership without buying their system outright can fund the purchase with a solar loan, which allows you pay off the expense of the machine through fixed monthly payments. For some business owners, it makes more sense to rent their solar PV system using a solar rental, or power purchase agreement (PPA), which brings immediate savings with little if any cash down, although monthly payments on a solar lease or PPA generally increase at a predetermined rate each year.
- Consider short-term price vs. long-term savings
To determine their true return on investment, business owners should think about the long-term benefit of going solar beyond its original cost and immediate savings. Thanks to increased financial incentives and reduced installation costs, the price of solar has decreased in recent years while energy prices continue to rise. Purchasing solar might help stabilize your energy costs and save you from the increasing and often fluctuating price of electricity purchased from a utility. In many cases, solar may even increase property value, enabling you to see added financial gain down the line.