May 05, 2022

What are the benefits of a commercial solar system?

Commercial Solar System

With massive corporations and small organizations all around the world adopting commercial solar-powered systems, many business owners are now considering an installation of their own.

And why not? Solar energy can deliver an extreme amount of economic and environmental value for an organization, and the benefits only stand to increase over time.

To help create urgency for your organization’s green energy project, here are some of the best reasons that businesses are going solar today.

The 3 Key Benefits of Commercial Solar Systems

To put it simply, solar power enables businesses to become more sustainable in every sense of the word. A solar installation is an asset that allows businesses to better control both their electricity costs and carbon footprint.

To quantify the benefits of a commercial solar-powered system into three key takeaways, large-scale installations can help businesses, non-profits, and other organizations:

  • Save money on energy expenses,

  • Increase resilience with fortified access to power,

  • And meet environmental goals.

 

1. Reduced Operating Costs

No matter its environmental impact, the decision to go solar as a business is almost always about saving money on long-term operating expenses.

Today, PV solar is an affordable, accessible, and prevalent energy source that provides organizations the opportunity to own a power-generating asset, rather than continuously purchasing electricity from utilities and other outside energy brokers.

By installing a commercial solar-powered system, companies can become one of their own electricity suppliers, and often increase their property value with a clean energy power plant onsite.

Visualized as a multi-decade investment in a business’s bottom line, solar installations can help stabilize electricity expenses with more predictable cash flows than external energy purchased at variously billed rates.

Coupled with the fact that solar systems have relatively low maintenance costs, property managers can easily estimate project expenses and future energy production to determine an installation's total return on investment.

And while upfront costs may steer some property owners away from the idea of going solar, thankfully there are many incentives and policies designed to enable large organizations to more easily adopt solar energy technologies.

Federal Investment Tax Credit: Often referred to as the solar ITC, the Federal Investment Tax Credit is the primary incentive responsible for driving down installation costs of solar in the United States over the last decade. Using the ITC in 2022, qualified businesses can claim a large percentage of their system costs against federal corporate income taxes applied within the same year.

Unfortunately, organizations such as schools, religious institutions, and other exempt entities cannot claim the ITC if they do not pay annual income taxes. In some cases, third-party ownership (TPO) or Tax Equity Financing can help organizations without a large tax liability still take advantage of the ITC and reap the benefits of a PV system with a reduced upfront cost.

Accelerated depreciation: To lower the overall cost of a new installation, any business that claims the solar ITC may be eligible for accelerated system depreciation. Using a Modified Accelerated Cost-Recovery System (MACRS), businesses can deduct a system's depreciation expenses in their taxes over five years, rather than the entire lifespan of a system.

By taking advantage of any available rebates, incentives, and tax deductions, business owners can shorten the timeline of a solar project’s break-even point, in which adoption costs equal the avoided expenses of traditionally purchased energy.

2. Increased Energy Resilience and Control with Commercial Solar

By generating sustainable electricity onsite, companies with PV solar energy systems become less reliant on public utility suppliers and other outside sources to deliver all of their energy needs.

However, in the event of an outage, simple grid-tied commercial solar systems are forced to go offline if electricity can no longer be fed safely back into local power lines. For this reason, more and more commercial solar power systems are now being installed with a battery backup.

With storage attached, a solar system can function independently as a microgrid, so that electricity can be continuously produced, banked, and used throughout the property.

By operating off of the grid, companies can increase their energy resilience. without having to worry about business coming to a grinding halt in the event of a local power outage.

Smart power management: In addition to emergency preparedness, solar and PV storage systems can help companies control their energy production and use during ongoing business operations. To help save money when new solar power isn’t readily available, smart energy management systems allow businesses to use stored power both overnight and throughout periods in which utility energy is billed at a higher rate.

Advantages over gas-powered generators: When considered against traditional gas-powered backup generators, solar panels and PV storage systems eliminate logistics and expenses related to ongoing fuel deliveries. Instead, the excessive noise, air pollution, and upkeep costs typically associated with backup generators can be replaced with low-maintenance, emission-free solar powered systems.

3. Going Solar to Meet ESG Goals

Most importantly, going solar can help every kind of organization meet its environmental, social, and governance (ESG) goals. After all, even though it will likely pay off on a company’s balance sheet, going solar is not only about saving money.

As a tangible, easily quantifiable, green energy asset, solar power is an extremely effective way to help companies meet sustainability targets. While some call it “instant decarbonization,” commercial solar energy lowers a property's carbon footprint the moment it begins operating.

Plus, without any drastic changes to daily business operations, most solar-powered systems are extremely easy to implement. Adding an installation to a property will generally not disrupt ordinary workflows, so that a company can operate with business as usual.

Typically prefaced with an energy efficiency audit, the overall environmental impact of a solar power installation can also be improved alongside other recommended property upgrades, such as updated building features and modernized appliances.

Highly visible commitment to the planet: In today’s global economy, a company's commitment to sustainable business practices is valuable at every level, from the end consumer to the board of directors. A solar installation is a highly visible and undeniable effort to reduce greenhouse gas emissions, for which organizations can be recognized for their eco-conscious decisions.

And while it all comes back to finances, a commercial solar system can also help companies gain a marketable advantage over their competitors, ultimately contributing to a business's long-term survival.

EV (Electric Vehicle) integration and other opportunities: Alongside renewable energy development, vehicle fleet and building electrification are also popular ways for companies to reduce carbon emissions. When hoping to power a new EV fleet, commercial solar panels can help keep electricity costs low with self-consumption of the power produced onsite.

Final Thoughts

To do what’s right for a business, its shareholders, and the planet, a commercial solar energy system is a great way for organizations of all sizes to reduce operating costs and lower their overall environmental impact.

With onsite and out-of-mind clean power generation and storage, solar systems can increase a business’s environmental and financial stability, without majorly affecting day-to-day operations.

Interested in solar for your business? Learn how Enphase can help with a quote for your commercial solar project.

Questions? Contact us. We'll help you build your system, today.
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