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What makes for a good commercial solar investment

What Makes for a Good Commercial Solar Investment

April 5, 2023 By In News No Comments

What makes for a good commercial solar investment? In recent years, the use of commercial solar power has increased rapidly as more and more businesses recognize the many benefits of commercial solar investments. There are many benefits of commercial solar, not only is solar energy better for the environment, but it can also lead to significant cost savings for businesses. In fact, with electricity prices on the rise across the United States, installing a commercial solar system can help offset the impact of rising energy costs.

Over the last year, almost every state in the US has seen drastic increases in electricity prices, for both residential and commercial, over the past year. In 2022 to 2023, New Hampshire saw a 49% increase in electricity prices. Massachusetts saw a 25% increase, Connecticut saw a 35% increase, and Pennsylvania experienced a 26% increase. These figures demonstrate the importance of finding alternative sources of energy, such as solar power, which can provide businesses with more stable and predictable energy costs over time.

So, what makes for a good commercial solar investment? Let’s take a closer look at some of the factors that can help ensure a strong return on investment for businesses considering solar energy.

 

High Energy Usage

How much energy does your business need to operate? One of the most important factors in determining whether a commercial solar investment is worthwhile is the amount of energy a business uses. In general, businesses that use a lot of energy are more likely to see significant cost savings by investing in solar power. As a rule of thumb, businesses that use at least 120,000 kWh of electricity per year are good candidates for a commercial solar system.

If a business uses less than 120,000 kWh per year, it may still be worth considering solar power, but the savings may not be as substantial. In addition, it’s important to consider the size of the business’s roof, as this can affect the size of the solar system that can be installed.

 

High Energy Costs

Are you in a state with high electricity rates? This is a key factor to consider Some states, such as New Hampshire, Massachusetts, Connecticut, Maine, and New York, have some of the highest electricity costs in the country, with rates ranging from 23.57 cents/kWh to 31.72 cents/kWh. Businesses in these states can benefit greatly from commercial solar installations, which can help offset the high cost of traditional electricity sources.

As mentioned above, energy rates are on the rise.  Not only will a commercial solar system reduce the already high costs, but it will prevent the unpredictable costs of your energy usage. Once your solar system is operational, you’ll have consistent and predictable operational costs.

 

Roof & Land Space Availability

The amount of space available for a commercial solar installation is an important factor to consider. While the ideal roof size for a commercial solar system is around 12,000 square feet, businesses with smaller roofs can still benefit from solar power, as there are many different system sizes available to suit a variety of needs. In addition to roof space, businesses can also consider using available land to install solar panels, especially if the roof is not ideal for a solar installation. A solar installation on open land requires enough space to accommodate the panels, the inverters, and other equipment necessary for the system to function.

In addition to the size of the roof, it’s important to consider the orientation and shading of the roof. A south-facing roof with minimal shading is ideal for solar power, as it allows for maximum exposure to the sun throughout the day.

 

State and Federal Policy & Tax Incentives

If your business meets the three criteria above, the next thing to consider is what state or federal tax incentives are available to you.  Some states offer tax credits or rebates for commercial solar installations, while others have net metering policies that allow businesses to earn credits for excess solar energy they generate and feed back into the grid.

Net metering allows businesses to sell excess energy back to the grid, which can help offset the cost of electricity when the sun isn’t shining. States like Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, and Pennsylvania all have net metering programs in place, making solar energy an even more attractive option for businesses in these areas.

The federal government also offers the Investment Tax Credit (ITC), which can provide businesses with a credit of up to 30% of the total cost of their solar installation.

Another important incentive for businesses to consider is the USDA’s Rural Energy for America Program (REAP) grant, which provides grants of up to 40% of the total project cost for renewable energy and energy efficiency projects in rural areas.

Solar Renewable Energy Certificates (SRECs) are another great incentive for commercial solar projects. These certificates are created for every 1,000 kWh of solar energy that a system produces and can be sold to utilities to help them meet state-mandated renewable energy goals. The value of SRECs varies by state, and some states have SREC markets that allow businesses to sell their SRECs to third-party aggregators or brokers. For businesses in states with SREC programs, these certificates can provide an additional source of revenue that can help offset the cost of the solar system and provide an even greater return on investment over time.

 

Does Your Business Meet This Criteria?

If your business meets some of the criteria listed above then you’re perfect for a commercial solar system.

Investing in a commercial solar system can be a smart financial decision for businesses looking to save money on energy costs while also reducing their carbon footprint. By considering factors like energy usage, energy costs, roof size, solar panel efficiency, installation and maintenance costs, and available financing options, businesses can make informed decisions about their solar investments and maximize their return on investment over time. With electricity prices on the rise across the country, now is a great time for businesses to explore the benefits of solar power and take advantage of the many incentives and financing options available for commercial solar installations.

Contact Genie Solar Energy today and we’ll creative the perfect commercial solar system for your business.

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Genie Energy Ltd., (NYSE: GNE, GNEPRA) is a global energy solutions company. We supply customers in the US and Europe with electricity, including electricity generated from renewable resources and with natural gas. Through Genie Solar Energy and Prism Solar, we design, construct and install commercial solar energy solutions. We provide commercial and industrial clients with energy brokerage and consultative services through our Diversegy brand.

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Convinced to go solar by the New Jersey incentives, PCS Wireless looked at several solar companies to provide the best overall value. Genie Solar was able to design a unique system to offset the largest portion of their electricity usage. Additionally, we combine it with an exclusive financial product which minimized the cash out of pocket and maximized the return on investment. The 494 kW system was constructed in minimal time, with no impact on the businesses operations.
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A provider of engine-generator systems, Kraft Power was a pioneer of “Total Energy” (Combined Heat and Power). After seeing the financial and green benefits of solar at their headquarters in Massachusetts, Kraft wanted to capitalize on the lucrative state incentives in New Jersey at a distribution center. By installing a 57.5 kW system on the roof they were able to offset 100% of their electricity usage, take advantage of the Investment Tax Credit, accelerated depreciation, and collect revenue from the New Jersey SREC program. Genie Solar made it a smooth process and limited the need for internal resources to manage the project.
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A premier provider of water treatment in the New York and New Jersey area, Tower wanted to go solar to save money and generate clean energy. Upon reviewing the financial benefits available in New Jersey with the SREC program and the federal Investment Tax Credit, they wanted to safe harbor the project in 2019 and construct in 2020. Buying American Made panels was an important component of the project, and by utilizing their white roof, Genie Solar was able to leverage Prism Solar’s bifacial panels to minimize the square footage needed and maximize the electricity generated. Genie Solar helped them achieve all of their goals in an efficient manner with a 44.6 kW system.
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Cardoza had both a showroom and a distribution center with exorbitant electricity costs in New Hampshire. As a legacy business, it was important to reduce costs and protect the business from increasing expenses prior to passing it on to the owner’s children. The show room’s roof and location made it a less than ideal location for solar; but the vast roof and direct sunlight on the distribution center could generate enough solar to power both facilities, plus the owner’s house. Leveraging New Hampshire’s group host program, Genie Solar built one 99.7 kW solar array to power all three locations. The owner is now considering converting more equipment to solar and building a second array.
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A destination nursery in rural New Hampshire, HBTSR was a long standing customer of Genie Solar’s sister company, Diversegy. After helping the business reduce electricity expenses for the past number of years, HBTSR turned to Genie Solar to reduce their rising electricity expenses over the long run. “Between the federal and NH state incentives, I was paid $8,000 to install my solar array. On top of getting money back, I am going to realize over $300,000 in savings during the 25 year warranty period of the solar array.”
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