Solar energy has become increasingly popular in the United States and around the world. Some associate solar panels with utility or residential applications, but solar can benefit businesses.
The U.S. Energy Information Administration reported 3.7% of homes and 1.6% of commercial buildings have installed small-scale solar. Commercial solar benefits not just businesses, but nonprofits, schools and government buildings.
How can solar help my business?
Going solar offers numerous benefits for businesses and other organizations. As the demand for electricity and the cost of oil rise, solar energy offers businesses an attractive alternative. Solar provides sustainable, clean energy that can reduce operating costs, see a good return on investment and appeal to consumers.
Operating Costs
Solar energy systems produce electricity from abundant sunlight. This can reduce your company’s utility bills. Solar provides clean, sustainable operation. Solar savings can amount to tens of thousands of dollars over the lifetime of your system.
Return on Investment (ROI)
While solar seems expensive, it will pay for itself over the system’s lifetime. Your investment in a commercial solar system can cut overhead costs and reduce your dependence on unstable fossil fuel prices. Eventually, the electricity cost offset will surpass the installation cost — and make you money. Even with financing options, which typically go through a bank or financial service, solar systems can still pay for themselves.
Sustainability
Solar is a clean, sustainable energy source that uses no fossil fuels. Whether you want to do your part or reduce carbon emissions, solar can be a great way forward. Corporate responsibility and environmental stewardship can contribute to your organization’s triple bottom line.
Marketing
Many consumers want to support green businesses — and many in the labor market want to work for sustainable companies. Going solar can help your business attract and serve customers or clients and find competitive talent.
Energy Security
Solar energy, especially when paired with energy storage, provides consistent energy to power your business. Whether it’s a power outage, wildfire or hurricane — your building can have emergency power. Plus, when energy costs rise due to global markets, your company can see stable energy costs.
Are there government incentives?
Yes, there are government incentives not only for residential solar but also for commercial solar. The federal government offers strong commercial solar incentives in the U.S. These incentives include solar, solar plus storage and storage-only projects. Individual states offer solar energy incentives as well.
The investment tax credit (ITC) is a tax credit that reduces the federal income tax liability for a percentage of the solar system cost. Meaning during the tax year, you can write off a percentage of the solar cost from your taxes. The current ITC allows businesses to write off 30% of solar expenses.
In addition to the ITC, there are depreciation benefits for commercial solar projects which improve the financial return. The Modified Accelerated Cost Recovery System (MACRS) is an American depreciation system used for tax purposes. MACRS allows the capitalized cost of an asset to be recovered through annual tax deductions over a specific period of time
MACRS incentives private investment in property, such as solar energy. Solar equipment can be eligible for a cost recovery period of five years. If you used the ITC, you must reduce the project’s depreciable basis by half the value of the 30% ITC — meaning you can deduct 85% of your tax basis.
Some states, like California or Massachusetts, offer incentives for residential and commercial solar projects. For example, Massachusetts offers the Solar Massachusetts Renewable Target (SMART) Program. The SMART Program is a production-based incentive that is paid directly by utility companies to solar electric system owners.
For more information about your state, check the Database of State Incentives for Renewables & Efficiency. Additionally — counties, cities, municipalities, utility companies and nonprofits may offer incentives, rebates or grants.
What’s the difference between commercial and residential solar?
While the science remains the same, there are differences between solar systems that power homes and systems that power commercial buildings. This ranges from size, installation, cost, time, color, placement and financing.
Size
Commercial solar projects are often larger. Not only do commercial buildings require more electricity, but commercially sized solar panels and storage batteries are larger. This is to capture more sunlight and provide more power to the building.
Installation
Installation details can be different based on your situation, but the process is the same. Both use bolted racking structures. Residential systems are often smaller and are installed on slanted, pitched roofs. Commercial solar projects are often larger and typically installed on flat roofs. Flat roofs are easier for solar panel installation.
Cost
While commercial solar systems can have higher costs, they typically have a lower cost per watt on par with residential systems. When comparing panel to panel, commercial panels have higher costs due to their larger size. Commercial solar systems with storage also have the ability for more storage space (due to larger building sizes). However, panels are bought individually and can be determined by their power calculation.
Time
Installation times for commercial solar projects are longer than residential projects. The longer installation time is due to larger-sized projects and a longer, more detailed approval and permitting process. All solar projects are required to meet local regulations. Commercial solar projects have larger scale and technical complexities, but once approved are typically straightforward.
Color
Solar panels often come in black or white, with commercial panels tending to be white. Residential panels can come in black or white but are often black due to manufacturer choices and homeowner preferences.
Placement
Commercial properties have more solar installation options, such as rooftop solar, ground-mounted solar and solar-paneled parking lots. Commercial properties are often bigger and can have more room or options for solar panel placement. Residential solar panels are typically limited to rooftops based on home size and neighborhood regulations.
What about nonprofits?
Commercial solar projects include more than just businesses. Faith-based organizations, public schools, private schools, healthcare facilities, tribal governments and other nonprofits can benefit from sustainable energy.
The Inflation Reduction Act of 2022 expanded the investment tax credit for solar and battery storage projects — which includes nonprofits. Nonprofits with no tax liability can apply for direct payments equal to the value of the tax credit. The current ITC is 30% — meaning the government will provide direct payments consisting of 30% of the solar project. This includes solar, solar plus storage and storage-only projects.
The White House offers a great resource outlining direct payments and explaining eligibility.
What about small businesses?
Solar can be a great asset for small businesses. If your small business owns property, solar systems with or without storage can provide lower energy costs and more energy stability. For the same reasons above — reduced utility bills, lower carbon emissions and energy security. Small businesses can also see returns on investment for solar panels due to government incentives, nonprofit grants and panels pay for themselves over time.
How Enact helps businesses
Enact has worked with many businesses around the world — from California to Dubai. Our mission is to accelerate the transition to clean energy and empower clean energy consumers. Enact’s end-to-end solar solutions take care of the entire process from design to post-installation monitoring.
Using our design and documentation software, we create free customized solar energy system designs to meet the needs of our customers. This can include energy storage and electric vehicle solutions if desired.
After agreeing to the perfect design for your business, we coordinate the entire installation and permitting process to save you time. Our end-to-end service takes you through the process step by step for a simple, solar experience.
After installation and proper government and utility permitting, we also offer a solar and storage monitoring platform Enact Consumer App. Enact Consumer App empowers clean energy owners to understand their system’s performance and quickly identify maintenance or repair problems.
Get started with Enact
Enact doesn’t just work with homeowners, but also businesses of all sizes and shapes. We’ve worked with hotels, shopping malls and even schools. If you want to learn more about how solar can save you money, visit our website and request a free custom proposal.
All we need to set up a free consultation is your name, the company’s name and address. Send us a copy of your latest electricity bill before your consultation so we can design a proposal. More electricity consumption information, such as monthly kilowatt-hour consumption or green button data, is also very helpful.
Small, independent businesses are often similar to residential consultations. Larger projects often require multiple meetings to better understand the project needs, goals and situation. Businesses in California are usually quoted with an energy storage battery due to NEM 3.0.
Sign up for a free consultation to get started on your organization’s sustainability journey.