Many businesses’ top concern is finding ways to free up cash flow continuously. Some common methods include switching to low-cost advertising and strategically negotiating with vendors. These other methods can become tiring and cause burnout very quickly.
The good news is that the mass adoption of solar energy presents another opportunity to save money. Installing and maintaining commercial solar panels requires minimal effort and is an effective way for businesses to free up monthly cash flow.
Fortunately, the benefits don’t end there. A business with a solar system can utilize tax incentives and protect itself against energy price fluctuations, to name a few.
Reduced or Eliminated Energy Bills
When all the small businesses in the U.S. spend over $60 billion on energy bills annually, it’s understandable to see increased interest in commercial solar panels.
A common belief is that installing a solar energy system can completely eliminate your energy bill. While this belief is true, the complete elimination of your energy bill relies on several factors.
These factors include:
- Installing a sufficient number of solar panels
- Being energy-efficient during work hours
- The total hours of direct sunlight
- The local electricity rate
- The angle of the panels
In most cases, it’s possible for a business to completely eliminate their energy bill as long as they’re energy-conscious and install enough solar panels to match their usage.
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Energy Price Fluctuation Protection
At the end of the day, energy is a commodity, meaning it’s exposed to constant and sometimes severe price fluctuations. Luckily, one of the solar energy pros and cons is protection from constant fluctuation.
Regardless of the industry or niche your business serves, it’s bound to use energy your local utility company distributes. That means when the electricity demand is high and the amount available is low, you’ll see a sudden spike in your monthly energy bill. Seasonality and demand aren’t the only variables to consider. In fact, electricity prices are expected to rise about 3.8 percent in the coming year.
By installing a system that can power your business with free, renewable energy, fluctuating energy prices become less of a worry. The system allows business owners to predict their energy usage and monthly bill with increased certainty.
Commercial Tax and Renewable Energy Incentives
The average cost to install a commercial solar panel is high, but if you factor in federal and state incentives, there’s a dramatic drop in the final price. On the federal level, business owners can deduct the solar panel system installation cost.
Currently, this amounts to a 26 percent investment tax credit. It’s important to note that the investment tax credit will continue to decrease in the coming years. It will fall to 22 percent in 2023 and 10 percent in 2024 for commercial installations.
Additionally, businesses have a $1.80 per square foot tax deduction incentive. However, this is only available to installations that generate at least 50 percent of the heating and cooling system’s energy.
This is a high incentive for business owners to install a sufficient number of panels. The goal is to become entirely self-reliant eventually. Of course, staying connected to the grid even though you have enough panels to power your business has its own set of advantages.
Additionally, there’s also accelerated depreciation. This allows a business to write off the smart meters and other solar equipment much sooner than throughout the product’s life.
Reduced Overhead Costs
Overhead costs for a business go beyond supplies, wages and insurance. A consistent but necessary overhead is your business’s electricity cost.
Maintaining a constant supply of energy is essential for any business. In most cases, electricity is used for more than keeping the lights on. It’s likely also used to power the heating and cooling systems and various other machines.
As mentioned earlier, installing a solar panel system is an efficient way to reduce your monthly bills without much effort. However, it will still tap into the grid at night and on an as-needed basis. This is only if your system still ties to the grid.
Generating free renewable energy reduces the need to pull from the grid at constantly fluctuating prices. At the end of the day, the total reduced overhead amount depends on the level of self-reliance and how much is invested into the system.
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Enhanced Consumer Reputation
As the global concern over climate change increases, consumers have taken action in their own way. One is by purchasing only from environmentally responsible companies.
Investing in these systems sends a message to consumers that your business is taking steps to become sustainable. This not only broadens your audience and customers but also improves the business’s overall reputation.
In a world where reviews and reputation are everything, converting to solar is an investment in creating a solid brand image.
Maintaining a Reliable Power Source
A power outage is unfortunate but sometimes is a common occurrence, depending on the location. It’s a costly mishap that comes with being 100 percent reliant on the grid and sometimes tens of thousands of dollars in wasted money.
By having a way to generate electricity yourself, the odds of experiencing a power outage become much slimmer.
Saving with Solar
It’s true that any solar panel cost can be seemingly high at first. However, it’s ultimately an investment that offers excellent short- and long-term benefits.
Depending on the size, a business can benefit from reducing or eliminating electric bills and recouping the cost in a matter of years. Additionally, installing a solar energy system attracts customers who shop at sustainable businesses.
The benefits of going solar go beyond how much a business can save. It also ultimately helps a business’s bottom line.