Business owners who are interested in going solar are often hesitant, claiming that installing a system seems "too expensive." If the company is already paying for electricity from a utility, solar power may seem like an unnecessary expense. Or the company could be in the midst of a particularly tight budget period, and is waiting to go solar until cashflow improves.
These otherwise well-meaning concerns could get in the way of some serious savings. Without knowing how to properly account for solar, you might choose to overpay for electricity instead of saving more on your bills than the monthly cost of a solar system. The trick is to look at solar not as an expense, but as an investment that is both low-risk and high-reward. When you find out what it actually costs to go solar, you will find that it is not only affordable, but a veritable no-brainer, a monthly budget reducer, and a fortune-saver over the lifetime of your system.
Even a relatively small solar system can produce a four-figure annual savings on your electricity bills. To back up these savings, Joule Energy has a written production guarantee that pays our clients back dollar for dollar in the event that their solar system does not produce the expected amount of electricity. Further, as utilities gradually raise their rates, your solar system helps soften the blow and provides you with greater long-term stability in energy costs.
And when it comes to financing, we won't leave you in the dark. We work with financing partners that develop packages for solar and energy efficiency projects, and can make the payment structure work within your timeline for receiving tax credits. In some cases, we can also design a financing package that allows your business to be cashflow positive from day one, especially when combined with other energy-saving upgrades such as LED lighting.
In general, we recommend going solar if the payback is between 5 and 10 years. If that sounds like a long time to you, remember that this still works out to at least a 10% annual guaranteed return on investment. We challenge you to find another type of investment that can match this return in both the level of risk and reward. And unlike other forms of investment, the returns in the form of energy savings are tax-free.
It's also worth mentioning that there are multiple tax credits and incentives aimed at helping businesses go solar. For example, the federal energy income tax credit (ITC) refunds individuals and businesses 30% of the cost of installing a solar system with no maximum system size. And for those who are interested in off-grid systems or battery backups, the ITC also covers batteries used for storing solar energy.
The credit was originally set to expire at the end of 2016, but has been extended for at least three more years. That's great news for business owners who plan to complete large-scale solar installations and want to ensure the financial viability of these projects.
You can also take advantage of the USDA's Rural Energy for America Program (REAP) if your business is located in an area with less than 50,000 inhabitants. This program, which encourages the adoption of renewable energy and energy efficiency improvements among rural small businesses, consists of loan guarantees for up to 75% of total eligible project costs, and grants for up to 25% of total eligible project costs.
So when you actually crunch the numbers, the benefits of going solar can easily outweigh the costs, from when your system is first installed to decades after it has been paid off. Unless your roof is somehow already making money for you, there's no reason to put off going solar.
Have more questions? Our account managers are well-versed on the costs and benefits of going solar, and will help you design a system that provides the maximum return for your business. You can contact us here, or call our office at 504-586-0625, and we will be happy to answer any and all of your solar questions. There's nothing to lose, but you could be leaving money on the table if you haven't yet calculated your potential solar savings.