Commercial Solar is not new. In fact, the early adopters did it 15 years ago, then the fast followers like the retail giants joined the process. Now the customers are business and building owners that are tired of their high electric bills and know something about solar.
If you own your building in which your business operates, you benefit the most from adding a solar system to your building. You decrease your electricity costs dramatically while increasing the value of your building and giving a good image to your client base. The building value goes up more than the system costs, and several multiples of the net cost of the system after you subtract the tax incentives. If you have title to your building in an entity separate from your business, like most business owners do, you can decide if the building entity buys the system and sells power to the business, increasing your income from your building. Alternatively, you can have the business purchase the system, decreasing their costs, allowing you to raise the rent without negatively affecting your business.
If you do not own your building, but you plan on staying there for the next 10 years, you can ask your landlord to give you a break on your lease amount because you have increased the value of the building. You can also ask your landlord to install a solar system and give you a break on the cost of the electricity he generates.
No matter how large your electric bill is, you will benefit from a solar system. The smaller your bill, the smaller the solar system you will need to offset all of your annual usage. They can be as small as a small residential system or as large as several acres on large warehouses or factories. If you do not have adequate roof space to put enough solar panels on your roof to offset all of your annual usage, you can consider adding carports that provide shade and other benefits. You can also add solar panels to any unused ground you may have or even property that adjoins your property.
The least expensive solar installations are large ground mounts just because the scale allows for a rapid installation. If you are thinking you do not want to lose farmland for a solar farm, think that a typical ground mount can generate $8,000. per month per acre. I don’t think many crops can match this. The next least expensive would be on the roof of the building. This means you would have to check the condition of your roofing and determine through engineering that your building can support a solar system. In general, all buildings built within the last 25 years were built strong enough to support a solar system. It is common to improve the roofing when installing a solar system, combining all the costs in one financing. Carports add about 35% to the cost of a solar system, but 70% of that additional cost is offset with tax incentives, and overall paybacks in PG&E territory are still less than 3 years. The added benefit of carports is shaded parking, and a modern appearance to your facility.
So how do you pay for this solar system on your building? If you have adequate free cash flow to make the payments, stretched out over 5 to 10 years, you will qualify for financing in today’s market. You will most likely have to provide a personal guarantee, which means personal financials and tax returns along with your company’s tax returns and year to date financials. Ever since the credit crisis, lenders and lessors are required to have a lot of documentation, but loans are being made every day. We commonly add other equipment or building upgrades to the financing package and pay for all of it with energy savings, with 100% financing and a positive cash flow from day one.
How does a business benefit from solar? In many ways and the more you look into it the better it gets. Your building goes up in value yet in California, your property taxes do not. The solar shades your building, making the roofing last longer and the building stay cooler. As a landlord, you are much more likely to get a government tenant with solar on the building, due to the points system governmental agencies use to analyze leasing choices.