The desire to make things better for our kids is human nature. We want to see them better off than we were, whether that’s more financial stability, a better education, or with wisdom we wish we had at their age.
For family-owned businesses and farms, this rings true on many levels. You want to hand off the next generation an efficient, stable, and profitable livelihood.
But operating costs are on the rise and the future is always uncertain. It’s seemingly impossible to anticipate what new hurdles the next generation will face, or what tools they’ll need to overcome these challenges.
Regardless of what the world looks like in a couple of decades, one thing will stand true: reducing operating costs will always help a business be profitable as long as it doesn’t diminish efficiency or quality.
With solar energy, you can do just that. Investing in a solar system today will let you hand down your business with one less monthly bill and with an asset that raises the property value.
A solar system can bring your farm or business both short-term and long-term economic benefits, all while curbing its carbon footprint and increasing your independence from the utility company.
Future-Proofing Your Business or Farm with Solar Energy
Installing a solar system will bring you short-term benefits now and will continue to deliver benefits to your family farm or business throughout its expected lifespan of 25 to 30+ years. Here’s how.
No Electric Bill
One of the easiest ways to increase your profit is to shave down your operating costs. However, you need to be sure you’re not doing so at the expense of your products’ or services’ quality.
A great way to knock down your operating expenses is to get control of your electric bill. Solar energy helps you do this by generating free electricity. Depending on the size of the system you install, you could produce up to 100% of your operation’s electricity usage.
And keep in mind that what you pay per kilowatt now is likely going to be much less than what you would pay in a few decades. Between 2005 and 2015, electricity prices increased by 34%. The next generation will be faced with electric bills much higher than what you pay today. A solar system offers protection from rising rates and gives you control over a fixed cost.
Increasing Your Property Value
A solar system is an asset to your business. After all, a property that can produce its own electricity for free is going to be more desirable to potential buyers than one with a huge electricity bill.
Studies have shown that a solar system can increase a commercial property’s value by 9.6%. This amount will vary depending on your state and utility’s regulations for solar energy, as well as the type of equipment that makes up your system.
Regardless, the system will add value to the business or farm should the next generation need to sell or relocate.
On the flip side, you may be wondering if this comes with downsides, like an increase in your property taxes or insurance.
While some states do increase property taxes for properties with solar energy, many waive the tax on value added by your solar system. To find out if your state will waive property taxes on your solar system, check out this blog.
As for insurance, you’ll want to check with your insurance company. You may need to purchase additional coverage to cover your solar system, however, that cost should be factored into the payback you see on the proposal from your solar installer, meaning it’s not a hidden cost that will eat into the earnings of the solar system. Learn more about insuring your solar system with this blog.
Benefits for Your Business Today
If you choose to invest in solar, you won’t only be doing the next generation a favor. You could be helping yourself out right now. While solar energy offers a substantial amount of benefits for your business or farm in the long run, it has short-term benefits as well.
Tax-Saving Incentives in Year One
Installing solar is a great way to reduce the amount of taxes you’ll pay in the first year of your system. From the Solar Investment Tax Credit (ITC) from the federal government to accelerated depreciation to any local incentives, you can recapture a large portion of the installation cost in tax savings the year the system is installed.
In 2020, the solar ITC allows businesses and farms that install a solar system they own (as opposed to a lease or PPA) for just 74% of the system’s cost. This means you’ll receive a credit on your taxes worth 26% of the cost of the solar system installation. This credit can be applied to your taxes the year it was installed, or it can be spaced out over the next 20 years until the whole credit is used.
Additionally, many businesses and farms that install solar are eligible for accelerated depreciation, meaning you can take all the tax-saving depreciation benefits from the solar system in the first year your solar system is installed.
Both the solar ITC and accelerated depreciation can reduce the cost of installing solar by a substantial amount, meaning your system can reach payback in just a few years, depending on the size of your system and the amount of electricity your business or farm uses.
We’ve installed solar systems for businesses and farms that reach payback in under four years, easily leaving decades left in the solar system’s lifespan to generate 100% free electricity.
Your Customers Appreciate Green Businesses
Businesses who install solar are making a statement to their employees and customers that they care about sustainable business methods. And employees and customers hear that, appreciate that, and are willing to show it with their wallet.
A recent study by Neilson found that customers under 40 are willing to pay more for services or products sold by companies that use green practices. Additionally, employees enjoy working for a company that does right by the environment.
The issue with some green business practices is that they’re difficult to communicate to your customers and employees without sounding like you’re tooting your own horn. However, depending on where it’s installed, anyone driving by can quickly see your solar panels and recognize the commitment you’re making to the environment.
So installing solar can help create loyal customers and employees which will benefit your business today and in the future.
Preparing Your Business for the Next Generation
No business is safe from our ever-changing world. We don’t know what challenges the next generation will face, regardless of what industry we’re in. There will always be a need to stay on top of market shifts, changing regulations, and new competition.
While we can’t protect the next generation from those challenges, we can prepare them to face them with determination, resilience, and wisdom.
And eliminating one of their monthly bills will help set them up for on-going success.