Lattice Solar Solutions

The 3 Key Benefits of Commercial Solar Systems

Solar power empowers businesses to become more sustainable operationally and financially. A solar installation is an asset that allows businesses to manage both their energy expenditures and carbon footprint.

To quantify the benefits of a commercial solar powered system into three key takeaways, large-scale installations can help businesses and organizations:

• • • Realize cash-flow by reducing energy expenses
    • Increase resilience by mitigating risk with fortified access to power
    • Meet environmental and sustainability goals

1. Reduced Operating Costs

No matter its environmental impact, the decision to go solar as a business is almost always about saving money on long-term operating expenses.

Today, PV solar is an affordable energy source that provides organizations the opportunity to own a power-generating asset rather than continuously purchasing electricity from utilities and other outside energy brokers.

By installing a commercial solar-powered system, companies can become one of their own electricity suppliers, and often increase their property value with a clean energy power plant onsite. A PV array with storage essentially becomes an energy substation.

Visualized as a 5-to-7-year investment in a business’s bottom line, solar installations can help stabilize electricity expenses with more predictable cash flows than external energy purchased at variously billed rates and future uncertainties.

Coupled with the fact that solar systems have relatively low maintenance costs, property managers can easily estimate project expenses and future energy production to determine an installation’s total return on investment.

Federal Investment Tax Credit: Often referred to as the solar ITC, the 30% Federal Income Tax Credit is the primary incentive responsible for driving down installation costs of solar in the United States over the last decade. Using the ITC in 2022-2023, qualified businesses can claim a large percentage of their system costs against federal corporate income taxes applied within the same year. 

Unfortunately, organizations such as schools, religious institutions, and other exempt entities cannot claim the ITC if they do not pay annual income taxes. In some cases, third-party ownership (TPO) or Tax Equity Financing can help organizations without a large tax liability still take advantage of the ITC and reap the benefits of a PV system with a reduced upfront cost.

Accelerated depreciation: To lower the overall cost of a new installation, any business that claims the solar ITC may be eligible for 100% accelerated system depreciation. Using a Modified Accelerated Cost-Recovery System (MACRS), businesses can deduct a system’s depreciation expenses in their taxes over five years, rather than the entire lifespan of a system.

By taking advantage of any available rebates, incentives, and tax deductions, business owners can shorten the timeline of a solar project’s break-even point, in which adoption costs equal the avoided expenses of traditionally purchased energy.

2. Increased Energy Resilience and Control with Commercial Solar

By generating sustainable electricity onsite, companies with PV solar energy systems become less reliant on public utility suppliers and other outside sources to deliver all of their energy needs. Energy should be valued like other portfolios and diversified to mitigate risk and hedge uncertainty.

However, in the event of an outage, simple grid-tied commercial solar systems are forced to go offline if electricity can no longer be fed safely back into local power lines. For this reason, more and more commercial solar power systems are now being installed with a storage battery backup. With storage attached, a solar system can function independently as a microgrid, so that electricity can be continuously produced, banked, and used throughout the property. By operating off of the grid, companies can increase energy resilience as a Phase 1 or Phase 2 project in lieu of coming to a grinding halt in the event of a local power outage.

Smart power management: In addition to emergency preparedness, solar and PV storage systems can help companies control their energy production and use during ongoing business operations. To help save money when new solar power isn’t readily available, smart energy management systems allow businesses to use stored power both overnight and throughout periods in which utility energy is billed at a higher rate.

Advantages over gas-powered generators: When considered against traditional gas-powered backup generators, solar panels and PV storage systems eliminate logistics and expenses related to ongoing fuel deliveries. Instead, the excessive noise, air quality issues, and upkeep costs typically associated with backup generators can be replaced with low-maintenance, emission-free solar powered systems.

3. Going Solar to Meet ESG Goals

Most importantly, implementing solar technologies can help organizations meet its environmental, social, and governance (ESG) goals. 

As a tangible, easily quantifiable, green energy asset, solar power is an effective way to help companies meet sustainability targets. While some call it “instant decarbonization,” commercial solar energy lowers a property’s carbon footprint the moment it begins operating.

Plus, without any drastic changes to daily business operations, most solar-powered systems are extremely easy to implement. Adding an installation to a property will generally not disrupt ordinary workflows, so that a company can operate with business as usual.

Typically prefaced with an energy efficiency audit, the overall environmental impact of a solar power installation can also be improved alongside other recommended property upgrades, such as updated building features and modernized mechanical systems.

Highly visible commitment to the planet: In today’s global economy, a company’s commitment to sustainable business practices is valuable at every level, from the end consumer to the board of directors. A solar installation is a highly visible and undeniable effort to reduce greenhouse gas emissions, for which organizations can be recognized for their eco-conscious decisions.

And while it all comes back to finances, a commercial solar system can also help companies gain marketing, branding, and supply chain advantages ultimately contributing to a business’s long-term sustainability.

EV (Electric Vehicle) integration and other opportunities: Alongside renewable energy development, vehicle fleet and building electrification are also popular ways for companies to reduce carbon emissions. When hoping to power a new EV fleet, commercial solar panels can help keep electricity costs low with self-consumption of the power produced onsite. (See our EV Charging programs and partnership with ChargePoint.