Beginner's Guide to Commercial Solar
Here in Massachusetts, at the end of 2018, Watertown became the first town to mandate solar on new commercial constructions and renovations of existing buildings of more than 10,000 square feet. We can see this ‘green remodeling’ becoming commonplace around the nation; but in the meantime, we’d like to share some basic information on commercial solar, for those who may be interested BEFORE it is required by law.Ted "The Wolf" Strzelecki
Adding solar to your business’ building has many advantages. It makes for more sustainable operations—in more ways than one! First and foremost, your business will gain energy independence, which is crucial in this time of rising energy rates, complicated billing structures and increased power outages. Next, it is great public relations to go green as a company and reduce your CO2 emissions. Finally, it’s a fantastic way to monetize unused roof space or property and bring in passive income for your business.
While going solar is a major capital expense, the government—from federal on down to local—have created incentives to reduce the upfront investment, as well as make the payback period shorter. The federal ITC (Investment Tax Credit) is currently at 30%, which means your business will recover almost one-third of the system’s cost IF you go solar by the end of this year. After 2019, the ITC is set to decrease through 2021 before settling at 10% commercially for the foreseeable future. (Please note: The residential ITC is different in that the incentive will eventually decrease to ZERO.) With the new tax code, there’s another bonus federally, as well: The cost of a solar system can be completely depreciated within the first year. That means up to 21% of a system’s coast could be covered with this depreciation bonus.
On the state level, many offer SREC (Solar Renewable Energy Credits) trade programs, in which certain production creates a credit which can then be traded for a certain financial rate. Here in Massachusetts, the SMART (Solar Massachusetts Renewable Target) program (http://masmartsolar.com/) is currently in effect. The program was very popular from the get-go for customers using more than 25 kW AC, which is most commercial entities. Presently, business customers of the Eversource East utility are still able to apply for and receive a certain rate back from the state for each Watt of energy produced and consumed.
Then there is net metering, where you basically sell the extra energy your system produces back to your utility company and in return, you get credits for your next electric bill. This is very handy for those who opt for systems that do NOT cover 100% of their energy bill, whose utility has time-of-use or demand charges, or who do not utilize energy storage.
The most common, simple and affordable type of solar is roof-mounted, but not every installation is a prime candidate. Other options include a ground mount, which eliminates any issues with shading, design angles, directional orientation and space/size. Canopies/carports over parking areas are another popular means of installation. In fact, the Massachusetts SMART program gives an additional $0.06/W for those who opt for a canopy install for their business. There is also a SMART adder for building-mounted, which is the least utilized option for mounting solar panels (on the sides of buildings), but is a great option for high rises.
We briefly touched on energy storage above. Yet another SMART adder that will pay back additional money to Mass. solar customers, solar + storage further increases a business’ dependence on the electrical grid (especially in times of a power outage) and helps even more in budgeting for energy spend.
The best return on investment lies with those who buy their solar systems outright. Ownership allows businesses to take advantage of all the aforementioned incentives, plus the money saved can be reinvested into the business, leading to higher profits. Leases and power purchase agreements (PPAs) allow for immediate savings and no capital outlay or ownership responsibilities; but because a third-party PPA provider or leasing company owns and maintains the array, these providers also get to keep most of the incentives
Before deciding on what’s right for you, be sure to do your homework to find an honest solar company like Solar Wolf Energy, to be completely open, upfront and descriptive about all your options. You also may want to consult a tax advisor for the financial aspects. Keep in mind your business’ needs and discuss them with your solar representative. Being straightforward about your goals, as well as your electricity history, will help the rep create a solution that is best for your company. A site visit will also help determine regulatory codes and the condition of electrical systems before the solar rep creates a personalized system proposal for you.
When a deal has been made—hopefully with us here at Solar Wolf—we take care of all the permitting, regulatory paperwork and relevant incentive applications for you as we prepare to install your system. After install, inspection approval and interconnection to the grid, the system is live and we CONTINUE to be with you every step of the way, available for your questions and concerns at any given time. In the meantime, we’ll be monitoring your system’s performance and celebrating your solar journey right along with you!