These next several years are going to be key for businesses considering a solar panel installation on their property. With supply issues stemming from COVID-19 problems quickly resolving, access to solar installation materials is becoming more cost-friendly.
Additionally, state funds and federal grants from the Inflation Reduction Act can give many commercial businesses a way to save even more money on their projects. However, other legislative pushes from utility companies and similar areas make some solar investment harder than it used to be.
In the middle of these changing circumstances, most businesses have a simple question: Will a commercial solar panel project actually save money? If it will, how long does it take for those savings to kick in? Let’s dig down into the details and get some real answers for 2023 and the years to come.
After the upfront costs have been paid and the solar installation is ready to get to work, companies want to know when they can start recouping their investment.
Part of this savings equation depends on how much electricity your business spends a month. Some estimates have an average of around $500, but that can vary a whole lot by industry and area. Another factor is the size of the installation or how much electricity it can expect to produce on average, but let’s assume a large solar project designed to cover a sizable amount of a business’s energy needs.
Some reports say that businesses can cut as much as 75% of their monthly energy bill with an installation like this, dropping that average down to $125. Others place that percentage even higher on average. Reports indicate that mid and small-sized businesses save around $101,000 by switching to solar, including the cost of installation.
That’s several thousand dollars a year over the lifetime of the solar installation, which is typically enough to cover financing for the solar project and save money afterward.
Solar battery storage, while an additional cost, also helps cover energy use during peak hours of operation. That’s especially important for businesses with power contracts that charge more for electricity during peak hours. Relying more on solar with the help of battery storage can mitigate costs during times when rates are higher, saving even more money with the proper management.
It’s difficult to put a firm number on incentives for solar panel installation. They vary according to state legislation, are impacted by new bills like the Inflation Reduction Act, and have varied year-based cutoffs for savings, among other factors. Savings may be easier in solar-friendly states like California, but many other regions are starting to follow suit.
Ultimately, in the right circumstances, your business can expect to save around 30% on the costs of a qualifying solar installation and possibly up to 70% in the right circumstances. It’s a good idea to partner with a lender, accountant, or financial advisor who has experience in solar incentives (and their sometimes tricky legal requirements) and can figure out just how much of your installation project will be covered.
Solar installations will save businesses money, but there are many ways to maximize those savings and cover the upfront costs ASAP. Start with research about solar options in your area, and see what an installation can do for you. Many resources, such as the National Renewable Energy Laboratory, offer great starting places.