Top 5 Reasons Your Business Will Benefit From Solar Energy

Mount Rachel

By Rachel Mountain

Namaste Solar has seen companies from all different industries and verticals investing in on-premise solar. We designed and built 4.2 MW of solar power at 20 sites for Colorado State University. We partnered with Jax Ranch & Home to design and install a system that will offset 100% of their store’s energy usage. And we have built solar carports and installed electric vehicle charging stations for KONG company. Industry or vertical aside, most homeowners can benefit from solar in these five ways:

1. An improved bottom line through tax benefits

At least half of your original solar investment is recouped through tax credits and deductions, allowing solar to deliver a double-digit internal rate of return (IRR) in many cases. Now, thanks to the Inflation Reduction Act of 2022, the federal Investment Tax Credit (ITC) is back to 30%. You can also increase the tax credit via adders, including an additional 10% if the project meets the home content minimums.

2. Reduced utility bills

On-site solar replaces an otherwise sunk expense with an asset. The money you typically pay to the utility company can instead be used to buy a three-decade-old solar asset that delivers long-term benefits to your business. Owners of triple-net leased (NNN) properties where tenants pay their electricity bills can also recoup their investment while also offering energy savings to their tenants.

3. Possible positive cash flow immediately

Colorado’s Commercial Property Assessed Clean Energy (C-PACE) program allows companies to implement solar with little to no out-of-pocket money (100% loan-to-cost), enabling projects to have positive cash flow from year one after recovering the benefit tax. Additionally, building owners can bundle the cost of a new roof, solar PV, LED, and HVAC upgrades into one fixed-rate loan with terms of up to 25 years. The loan structure eliminates any risk for property owners, as the non-recourse loan is tied to the property through a special tax assessment. As a result, C-PACE financing can be passed on to the next owner if the property is sold.

4. Reputation and brand differentiation

The Denver metro area is a growing and increasingly competitive market that is attracting many national and international businesses. Commercial solar sets these businesses apart from the competition and gives real estate investors access to a more sophisticated class of tenants with internal sustainability committees or mandates. Solar helps increase occupancy and base rates, meet corporate sustainability goals, comply with regulations (like Energize Denver), and retain quality employees and tenants. Companies that have installed solar know that there are few capital energy improvements that offer such a holistic range of benefits.

5. Increase in property value

In addition to the utility savings from solar, some utilities will purchase Renewable Energy Credits (RECs) generated by your system. For example, a 200 kW system on a 30,000 square foot flat roof in Xcel Energy’s territory will generate approximately $11,000 in annual revenue for 20 years. This income directly increases the net operating income (NOI) of your property.

summing up

Commercial on-site solar electricity is cheaper than traditional utility-based electricity over time. As utility rates continue to rise, so does the value of your solar system’s energy, and these savings free up capital to fund major business initiatives or investments. For those seeking to meet environmental, social and governance goals or mandates, solar brings impressive and measurable environmental benefits to the table. It also increases the marketability of your property, giving you an edge in today’s hyper competitive market, all while generating an attractive return on investment.

Rachel Mountain is a co-owner and commercial solar project developer at Namaste Solar. Namaste Solar’s purpose is to transform energy and transform business. The company’s experienced solar consultants will help you understand your project’s goals, timelines, and milestones. Look at their extensive commercial experience and see how they measure up.

Leave a Reply

Your email address will not be published. Required fields are marked *