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Cost Of Solar

How Cost Of Solar Installation is Decreasing?

Let’s face it: most business decisions are motivated by money.  If you’re a business owner, you can’t make risky decisions that put your employees and your bottom line at risk.  For many commercial business owners and farmers, the idea of installing solar panels seems risky.  But the reality is that solar energy is an investment that pays off in a big way (and not just for our planet).

With the cost of installing solar panels for businesses continuing to go down, and with the local and federal government offering attractive tax incentives for installing solar energy, now is the perfect time to invest.  It’s thanks to this lowering cost and these government incentives that the community solar industry is growing at such staggering rates. But what exactly does it cost to install solar panels for a commercial business?

Cost Of Installation Of Solar

Solar panels aren’t just for large chain businesses anymore.  Commercial buildings, farmers and business owners both large and small can all benefit from installing solar energy systems.  The average commercial property owner pays roughly $538 in monthly electricity bills.  That’s quite a hefty bill that most business owners would leap at the chance to take a chunk out of.  Businesses that install solar energy find that their electricity bills get reduced to around $91, which is an 83% reduction.

 Sure, that’s quite a monthly saving.  But is it enough to offset the cost of installation?  Let’s look at the figures.  Your solar system size in measured in watts, with the cost measured in dollars per watt.  The system size you choose depends on the amount of energy your business needs.  The average commercial system is priced at $2.87/watt, and that’s before including the tax rebates or incentives we’ll get to in a minute.

You might also interested in: The Benefits And Growth Of Solar

A 25 kW system therefore costs around $71,750, while a bigger system of 250 kW costs around $717,500.  Now this may seem like quite the figure, but most small businesses won’t require nearly as much energy as a 250 kW system.  Small businesses use between 15 kW to 25 kW, while medium businesses usually consume up to 50 kW.  And we haven’t gotten to the best part: the tax credits that make solar such an attractive option.


Benefits And Incentives Of Solar:

 Investment Tax Credit (ITC)

By far the best reduction in your business’ cost of installation for a solar panel system is the Federal Investment Tax Credit (ITC).  If you’re the owner of a newly installed solar panel system, you’ll receive a federal tax credit for 26% the cost of the entire system.  This drops the price of a 25 kW system from $71,750 to $53,095. The ITC applies not only to commercial systems, but also residential systems.  There’s also no cap on its value, which means businesses both big and small can enjoy the full benefits.

 Depreciation Tax

As if the ITC weren’t enough, solar energy systems also qualify for a Modified Accelerated Cost-Recovery System (MACRS) depreciation schedule that lasts for 5 years.  The precise amount varies based on the tax rate your business pays, but usually this works out to another 25% of the cost of installation being deducted from your taxes.  Suddenly the cost of installation starts to seem a lot more manageable.

State and Local Incentives

While the federal government is doing its part to encourage the commercial installation of solar energy systems as revenue builders, many state and local governments offer their own incentives.  Look into your local and state incentives in your state to find out more about what additional benefits your business can receive.

 For example, Massachusetts is one of the biggest supporters of solar energy programs.  Their SMART solar program gives you a check from your utility company based on a fixed monetary amount.  This amount gets paid for every kilowatt-hour of solar energy generated and is multiplied by the amount of solar energy you actually generate each month.  Commercial businesses continue to get paid this amount for 20 years.  That’s quite the revenue builder!

Power Purchase Agreements (PPAs)

A solar power purchase agreement (PPA) allows a business to buy solar energy without putting upfront capital cost.  This effectively means that you get the benefits of solar energy without the responsibility of operating the solar energy system.  A third-party provider pays to install the solar system on your facility, while you enter into an agreement to purchase the electricity it produces at a predetermined rate.  This is a great way for businesses to enjoy a lower electric bill without the hassle of going through the installation.

How To Get Started

Solar energy is far from an expensive investment.  It’s one of the most economically feasible choices a business can make, investing in the future of both their company and our planet.  And while we all want to do what we can for the environment, it doesn’t hurt to save a little money while doing it.

Solar developers such as NextLight Energy are leading the way to help provide businesses with the information they need to invest in solar energy.  From solar farms to PPAs, find out how your business can benefit from solar energy by visiting Solarcityenergy.us.  Contact us today to start taking advantage of the amazing revenue builder that is solar energy!

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