Solar power isn’t something you think of often. Mostly, it’s something you hear about on TV and blasted all over the Internet. But, this technology has come a long way since the 1970s. Most businesses don’t think it belongs on their rooftops, but there may be applications where it’s legitimately useful.
Prices Have Come Down
Solar isn’t a new technology. It’s been used for more than 40 years. For the majority of solar power’s history, solar panels have been considered an expensive alternative to more traditional forms of energy. But, these days, improvements in production processes have allows solar prices to come down. Today’s market allows for more reasonable pricing – even for businesses.
It’s not useful in all applications, and the benefits will hinge on what part of the country you happen to live in as well as what you intend to use it for. It’s a way to supplement existing power in areas where power is more expensive than the long-term installation of solar panels, or where brownouts are common and you want to diversify your energy sources for more stability.
Government Gives You Incentives
The government has gotten into the game of solar, giving businesses incentives, like tax breaks, for installing solar systems. Solar power incentives are available in many different markets so, for example, anyone who buys a solar power system and installs it in the U.S. is eligible for a 30 percent federal tax credit.
In addition to this, many utility companies offer rebates toward the cost of the solar power system. Finally, net metering makes the solar panel a good way to offset rising energy prices in some areas of the country.
Net metering is the process of generating solar energy and then feeding it into the electric grid. This creates a net positive in the grid and reverses the rotation of your electric meter – crediting you with money (energy) for later use.
The sometimes high solar panel installation costs are often by the fact that solar panels for business use are tax deductible. When businesses spend money on equipment, they can depreciate the cost of that equipment over time. Accelerated depreciation during the first year, and all of the depreciation within 5 years, means the payback happens very quickly.
While some businesses can go solar for a very reasonable investment, there are still many applications where the cost just isn’t justified. For example, if your company is located in an area with inconsistent sunshine, or you’re located in an area where you are bathed in shade for most of the year, it’s going to be difficult to benefit from a solar system.
Additionally, not all areas in the U.S. receive the same amount of sunshine. With current systems operating at a peak efficiency of just 40 percent of sun gathered, the payback might not happen soon enough for your business to make it a good investment. When looking or a payback period for your system, add three to five percent increases in rates each year. This allows you to fairly compare the real costs of electricity, adjusted for inflation.
Ryan McNeill researches practical applications of renewable energy. He enjoys blogging about his insights and ideas into sustainable power sources.