Jayson Waller is CEO of POWERHOME SOLAR. He hosts a motivational podcast called True Underdog and his book “Own Your Power” is on Amazon.
In a recent interview, I was asked if our solar panel business customers lean left or right. My answer was simple: They are focused forward on improving efficiencies, which leads to an improved bottom line. They are thinking ahead to the next disruptive power outage, sure to be followed by another, and when millions of electric cars will line the streets, taking an even bigger toll on our grids.
For business owners and C-level executives, solar energy can be a solution to keep operations moving forward. Even in an election year, the sun is nonpartisan and will treat every solar panel on the rooftop of your business the same way. When the sun’s rays beat down (even on overcast and gloomy days), they produce electricity that can be used right away or stored for later use if your business property also has solar battery storage. That’s how it works, but here are some ways it can help your business save money and limit business disruption.
• Potential Reduction In Monthly Electric Bills: Solar panels can be installed on top of most any building rooftop from office space to warehouses to arenas to restaurants to multi-family housing to service centers and more. This solar energy can potentially reduce your electric bill to save thousands, even tens or hundreds of thousands, depending on the size of your system or the number of locations with solar panel rooftops. While it varies by locality, there may be even more potential savings for eligible businesses if they are able to sell excess solar energy back to utility companies via net metering.
• Community Outreach: There is no better “show and tell” for customers than solar panels. Their visibility gives businesses an advantage because solar is both a green initiative as well as a win for the community since every building with solar panels is taking a step to lessen the burden on the grid. Customers will be able to see the panels for themselves when they are at your facility and in your marketing materials.
• Protection During Power Outages: This solar benefit may seem obvious, but it has multiple layers of success. Not only will solar energy give you the ability to keep some lights on and desktop computers running when there is a power outage, but for any business that has refrigerated or frozen goods, those investments can also potentially be protected for a period of time. And, depending on the size and structure of your facility, having a source to keep at least some of your lights on can keep your business open.
• Federal Tax Credit: The federal solar tax credit allows companies to deduct up to 26% of the cost of adding a solar panel system to their buildings from their federal taxes. So, for every $10,000 that a commercial entity spends on solar, they can deduct up to $2,600. However, this tax credit is scheduled to drop to 22% in 2023 and, barring any possible extensions by lawmakers, will drop to 10% permanently in 2024. So, time may not be on your side if you’re still mulling over this decision.
• State And Municipality Tax Credits: Some states offer a state income tax credit for businesses. In South Carolina, they get a corporate tax credit of $3,500 or 50% of a businesses’ tax liability, whichever is lower, for each facility with solar. These credits in excess of $3,500 can carry over for up to 10 years. A lot of states offer sales tax exemptions as well. In Tennessee, businesses are 100% exempt from sales tax on a solar panel system. Of course, there may also be local incentives, so do research on the perks where your business is located.
• Long-Term Property Value And Marketability For Resale: This is the crème de la crème when it comes to thinking ahead! Many cities and states have initiated property tax exemptions on solar, so the added value of solar panel installation will not be counted on property tax fees. In our home state of North Carolina, commercial businesses can deduct 80% of the property tax on the value that a solar panel system can add to a property. This can be a big draw for business properties, especially those with larger tax burdens.
Three Circumstances That Create Solar Energy Drawbacks
Installing solar panels can create a reservoir of potential savings. However, there are ways an investment could be a wasted initiative for companies.
1. If You Need A New Roof: Solar panels are set atop existing rooftops; solar companies do not replace them. Therefore, if you’re building needs a new roof, that should come first because when it does come time to replace your roof, you’ll have to pay to remove and reinstall the panels. Solar panels should only be considered when the current rooftop is in excellent shape or a new roof is installed first.
2. If You Are Planning To Relocate: It doesn’t make sense to invest in solar as an upgrade if you won’t be there long to reap the benefits. Even in states where there is genuine marketing ability on resale, buyers will want to see the measurable results of the solar panels while they were in use during your business’ occupancy. Solar panels are a long-term commitment with savings happening over time, not overnight.
3. If Your Building Has Too Much Shade: The best place for optimal solar production is on the south side of buildings, though panels facing east or west also should get enough sunlight for solar to be beneficial. However, if any property has too many nearby trees or shadows from neighboring structures, it could greatly impact the amount of solar production. Utilize digital measurement tools to see if solar is the right investment for your business.
How much solar energy can help your business improve its bottom line will be determined by many factors, and in some cases, it won’t be helpful at all. But it is worth exploring because anytime you can show customers your green initiative or show company executives your savings on your P&L, you are winning!