It is less expensive than ever for your business to install solar panels. If projections are to be believed, the cost of installing solar will continue to fall. Still, you may be looking for ways to offset your initial investment in solar in the short term. There are several factors to consider when comparing the initial investment against the long-term cost-saving benefits your organization can receive.
The first thing business owners think about is the solar tax credit. While this credit is a powerful incentive, it is just one of many initiatives to consider when calculating the actual expense of investing in solar for your business. The following are four factors you may not have considered that could potentially save you tens of thousands and up to hundreds of thousands of dollars each year.
- This is a federal policy that was created in 2006 and then extended in 2015. Its goal is to encourage businesses to use solar energy by offsetting the initial expense of installing a commercial solar system. This policy allows businesses to receive a credit against their federal income taxes for the money they invested in a commercial solar panel system
Every year, the percentage of a business’s investment in solar that can be used as a tax credit decreases. In 2020, the tax credit represents 26% of the investment. In 2021, it drops down to 22% and then 10% from 2022 onward. The sooner your business acts, the greater cost savings you will see.
2. State and Local Incentives. State and local governments have a vested interest in the proliferation of sustainable energy. Several states and local governments offer additional incentives and rebates to businesses that install commercial solar panels. The Database of State Initiatives for Renewables & Efficiency is a tool your business can use to search for money-saving tips applicable in your area.
3. Net Energy Metering (NEM). This is a popular program that allows your organization to create its own energy and then to give unused energy back to the local electricity grid. The utility company will credit you for any of the energy you have created and given to the grid.
Net energy metering policies vary from state to state and from utility company to utility company. Some will allow you to receive a credit on your monthly electric utility bill. Others will allow accumulated credits to rollover month-to-month until they have been used.
While this billing arrangement is an amazing way to lower utility costs, it’s important for you to become familiar with how this policy is carried out in your area. The US Department of Energy is a great resource that provides up-to-date information on this subject.
4. Solar Renewable Energy Credits. In the world of renewable energy, Solar Renewable Energy Credits are considered currency. These credits are obtained by businesses that track the amount of clean renewable energy they produce through their commercial solar system. The higher the levels of clean energy they produce, the more credits are created. Some businesses will sell these credits to others and use the money generated to offset the expense of installing commercial solar panels. To learn more about this program and how it may apply to you, visit The Database of State Incentives for Renewables & Efficiency.
In addition to using the above-mentioned policies, there are steps you can take to maximize the cost saving benefits of installing commercial solar panels. For example, storing solar energy in batteries and then using stored energy during peak kilowatt hours can save your business thousands of dollars every single year.
There are several initiatives that can offset the cost of installing solar panels for your business. It will take a little bit of time, a little bit of research, and the ability to ask the right questions. However, this can result in short-term and long-term cost savings benefits for your company. Learn more about the cost savings benefits of Solar Power by contacting Solar King today!