Since the last economic crisis, economic uncertainty has created many difficult hurdles for business owners to navigate. Business owners are more hesitant to make future business plans such as expanding their operation, hiring or investing in upgrades. However, solar has been a “ray of sunlight” for many business owners because it gives them a tactical advantage over the economic unknowns. America’s dependence on energy is increasing and concerns are growing because many of our energy sources are coming from volatile parts of the world. With solar, businesses are not only able to address future cost by hedging against future price increases, but are adding to their bottom line.
Lower Overhead Cost
Solar can drastically reduce expenses and eliminate most or all of a business’s electric bill. Removing a cost of doing business today has potential for even larger savings in the future.
Solar projects are eligible for a 30% federal tax credit. For every dollar spent on solar you would receive $0.30 when you file your taxes (if you paid that in taxes). For businesses, if the total tax credit cannot be taken advantage of in the current year, the remaining portion can be carried back 1 year and carried forward up to 20 years. Some businesses are taking advantage of the tax credit earlier than year end, by reducing quarterly tax payments immediately. Additional tax savings can be realized through depreciation as solar can be depreciated over a 5 year period.
As with any investment, the return needs to justify the cost. Pre-tax returns for most solar projects in the Northeast US can range from 5% to 25% with paybacks typically ranging from 3 – 10 years. A payback can be also viewed as the “end date” to an electric bill, as all electricity after the system is paid back is free electricity.
A solar system consists of many nonmoving parts, reducing the impact if one part were to fail. Most solar system owners will not see any maintenance cost in the first 10 years. After the initial 10 years, industry standards project ongoing maintenance costs to be around $.015 to $.02 / kwh.
If the uncertainty of today’s business climate has you looking for a tactical advantage, research the many benefits that a solar system can create for the bottom line of your business.