It is no secret that on-site solar energy can benefit facilities of all types—from small retail stores and offices to giant corporate offices, warehouses, and even shopping malls. On-site solar refers to solar photovoltaic (PV) panels installed on either a residential or commercial property. They can be installed on the roof, mounted on a field, or sometimes built as canopies over functional spaces (i.e., parking lots).
Some of the most well-known companies in the U.S, such as Verizon, Amazon, and Lowe’s, are also amongst the top 10 installers of solar energy in the country. Many of these established companies have also made commitments to source 100 percent renewable electricity for their facilities by 2025-2050.
As a facility manager, if you are new to solar energy projects, you might be wondering how it can directly benefit the properties you manage, and by extension, the company that you work for. The great news is that there are many advantages of adopting solar. Let us explore the top ten reasons why your facility should install solar panels:
- Reduce Electricity and Operational Costs with Net Metering
Businesses can decrease their monthly electricity bills by installing on-site solar. Due to a state policy known as net metering, commercial solar customers can give the excess energy their solar system produces back to the grid. In exchange, they receive credits that lower their utility bills. If the solar energy system is designed correctly with the building’s annual energy usage in mind, then the solar energy that is ‘over produced’ during peak-sunshine hours can be used to compensate for when there is low levels of sunlight and lower output of solar energy. To put it simply, the greater the energy output by your solar array, the lower your electricity costs.
Therefore, solar can help you improve your building’s operational margins and your company’s Net Operating Income (NOI) across the year.
- Improve Property Value, Don’t Pay Additional Taxes
As the real estate industry becomes more aware of the advantages of solar, appraisers are more and more taking into consideration the value it adds to facilities. According to the American Association of Appraisers, properties with previously installed solar arrays have a greater market value and a higher resale value as well. Companies are always trying to find ways to increase the value of their real estate assets, and solar is a promising way to do it.
However, are you worried that adding solar to the building you manage will raise the property tax bill? Thankfully, this should not be an issue in many places in the U.S, as there are currently thirty-six states that offer a property tax exemption for the value that solar systems add to a facility. So, enjoy a higher market value without needing to pay any additional taxes.
- Take Advantage of Federal Government Incentives
Businesses can benefit from federal government incentives that simultaneously reduce the cost of installing solar and the company’s annual corporate taxes. The Federal Solar Investment Tax Credit (ITC) allows businesses to receive a one-time dollar-for-dollar reduction on their taxes by installing solar on their properties.
- Install Solar Without Any Upfront Costs
The solar industry has evolved immensely in the last decade. Beyond technological improvements, innovative private-sector financial mechanisms have allowed even commercial customers with a limited budget the opportunity to install solar.
The Federal ITC mentioned above is only applicable to your business if you decide to directly purchase a solar array system. If your budget does not have the capacity to pay for the upfront cost of going solar, then your company can consider a Power Purchase Agreement (PPA).
Under a PPA framework, an experienced solar developer, like Pivot Energy, would technically be the renewable energy system owner on your facility. The solar developer would pay for all the upfront costs of installing solar and maintaining the system over the duration of a PPA contract. In exchange, you would agree to buy the energy produced from the solar system at a predetermined rate. This monthly amount is typically lower than what you are currently paying to your utility. So, you can literally enjoy the benefits of solar without bearing any of the upfront investments.
Additionally, if you are a facility manager for a non-profit organization, government entity, or a company without taxable income, the ITC would not probably be very applicable. In this case, you can still benefit from going solar in the form of a lower cost per kilowatt-hour through a PPA.
- Decrease Your Budget Uncertainty
Continuing from benefit #4, you are essentially locking in 15-20 plus years of predictable electricity costs by going solar. You will always be able to budget what you are paying for, unlike utility bills that fluctuate significantly with the market and many other uncontrollable factors. Solar will stabilize electricity costs over time by putting you, the facility manager, in greater control of your overhead.
- Reduce Climate Risks
It is in companies’ best interest to start considering the benefits of solar energy to the environment. Solar can help your business stay ahead of the curve and mitigate climate change-related risks that may impact you in the future. For example, switching to solar technology can help businesses be resilient against rising fuel prices, extreme weather events, and policy risks such as caps on carbon emissions.
To expand on the risk of fuel price volatility – according to the U.S Energy Information Administration (EIA), the average cost of electricity for commercial customers rose by $0.02 from 2019 to 2020. While this increase might not seem significant at the moment, if the trend continues (which it is expected to), then utility costs will be even a more significant share of your facility’s overall management budget in the near future.
- Solar is Low Maintenance
Solar is a very inert form of energy generation technology with no moving parts once installed. Therefore, solar arrays do not require much routine maintenance beyond preventive care. This makes installing solar easy over the long term, so your facility staff does not need a lot of training and your maintenance costs will not be rising significantly either.
It is also worth noting that if instead, you choose to go through the PPA route, the solar provider would be entirely in charge of maintenance and operations.
- Promote the Local Economy
When your building decides to install solar, you support jobs directly in your community in the form of electricians, installers, electricians, and project managers. Beyond the advantages to the local economy, your facility can gain a positive reputation in the community as a promoter of American jobs and clean energy.
- Improve your Sustainability Communications
Companies, big and small, are facing an increased amount of pressure from their shareholders, customers, and even employees to “go green.” Hence, having a strategy to integrate more renewables in your properties slowly is no longer a differentiator—it is practically a market necessity. By going solar, businesses can prove their commitment to sustainability and the needs of all their stakeholders.
- Provide Shade for your Employees and Customers
Solar energy does not always have to be installed on a roof. In fact, you can also explore the idea of solar parking canopies that can cover customer and employee parking spaces. Solar parking canopies have the advantage of generating electricity just like a rooftop solar array and connect to your facility in a similar method. However, the plus side is that your employees and customers can benefit by protecting the elements – no matter the season.
Talk to the Experts
All things considered, the facilities you manage can benefit from many advantages by installing solar. Beyond decreasing the monthly electricity bill, solar also improves property value, boosts corporate sustainability targets and reduces future financial risks to companies.
The Pivot Energy team is ready to support your property in planning its renewable energy strategy and help design a system that is sized to your building’s energy usage in mind. Do not hesitate to reach out to speak with a member of our team today.