Savings, Incentives, and Inflation

Electricity generated by solar energy systems is still pricier than conventional electricity from coal and natural gas. While solar may not be the right choice for every business, with a combination of Federal and state incentives as well as utility incentives your company has the potential to dramatically lower the costs of operating your business. As natural gas and coal prices continue to increase, solar energy becomes an even more attractive option for businesses.

Government incentives set out to entice businesses to adopt renewable forms of energy, and to consider them a worthy investment. To this end, there are a wide variety of incentives for businesses looking to invest in solar energy systems that can significantly reduce the initial installation costs. A 30% corporate investment tax credit (ITC) currently has no monetary cap for installation costs. A 30% cash grant is also available to some businesses as an alternative.

The Modified Accelerated Cost-Recovery System (MACRS) allows companies the ability to recover investments through an accelerated 5-year depreciation schedule. This program is also available for photovoltaic systems. There is a one-time 50% bonus depreciation for systems installed in 2010. Several states in the US are also extended tax credits to businesses installing solar energy systems, as well as grants and rebates.

There are peak shaving practices for businesses, that allow businesses to purchase electricity when it is at its cheapest. For example, utilities often charge less for electricity during the morning and evening hours, and midday hours are considered peak hours. With an efficiently designed photovoltaic system, you can reduce the amount of electricity purchased during peak hours, as this is when your solar system will absorb the most sun.

A solar energy system has a lifespan of roughly 25 years, making it a long-term investment that reduces variable costs. The reason for this is because a solar energy system will reduce your company's vulnerability to energy price inflation. If your company uses a great amount of energy, and foresees an increase in the price of conventional energy then you are highly vulnerable to a decreased bottom line. If your company is ready to commit to a better energy solution solar energy is a great choice. While it won't lower all your costs overnight, and the installation process is complicated, if your company is committed to a long-term investment, solar energy may be the best options.

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