Is Solar Power a Wise Investment for Small Businesses?
Small businesses are the most susceptible to rising energy costs and limited consumer spending. When times are tight, pennies are pinched and cost effectiveness becomes tantamount to company survival. Now that may sound like a reason to avoid the high up front costs of adopting panels and solar power, but for many small businesses, it is instead a prime incentive for doing just that.
Small businesses face several energy usage challenges that many homes do not. First of all, businesses are at peak usage when electricity is at peak demand. So a solar power system will mitigate electricity costs when they are most expensive. Lighting and appliance loads are especially high for businesses, particularly those in the food and beverage sector. Switching to more energy efficient appliances and light bulbs is a vital first step, but solar power offers even more benefits.
Solar power is a wise investment for small businesses for a number of reasons:
- Rebates and Tax Incentives - The federal Investment Tax Credit (ITC) has been extended through 2016, allowing businesses to recoup 30% of the initial cost, including installation, of a solar energy system. Many states also have lucrative incentives in place for businesses, a factor that may sway the investment in either direction. Recent additions to the small business incentive base came as part of the American Recovery and Reinvestment Act (ARRA), which include federal loan guarantees for commercial solar systems (among other technologies), as well as incentives for weatherization and energy efficiency upgrades to help businesses and homeowners get started on the solar path.
- Energy Costs and Usage - On average, businesses consume significantly more energy than single-family homes. So it stands to reason that businesses have more to gain from adopting “homemade” solar power. Indeed, payback periods tend to be shorter for businesses because daily and yearly energy savings are higher, especially as grid electricity costs continue to inflate.
- Green Publicity - A fast-growing proportion of consumers are shopping or buying services from companies with an outwardly “green” appearance. Adopting solar power, even selling solar products, is an attractive quality in the competitive small business sector. Solar power opens doors to a new realm of public relations events, promotional opportunities and advertising potential that are underrated – and unmeasured – side benefits. Solar installers like RECSolar even incorporate marketing and promotion into their package of services for small business customers.
- Scale - A small-business solar system can easily be large enough to benefit from lower installation costs due to economies of scale. In other words, you buy in bulk, you save money. It is a concept that any business owner can understand.
Solar power is an investment that varies from home to home and business to business. As sweet as the above deal may sound, solar power is not for every small business. Many variables are involved in the equation, including business location, state and local incentives, building design and much more. However, rising costs, public support and government solar rebates have created a situation where solar power is a wise investment for more and more businesses. Increasing energy efficiency and getting a solar site analysis are key first steps.
Here are a few examples of positive small business solar investments:
Payne Printery – Wilkes-Barre, PA
United Bicycle Institute – Ashland, Oregon
And here are a few resources for small business owners interested in solar electricity:
U.S. Small Business Administration – Overview of ARRA
Business.gov – Grants, loans and incentives for businesses
Photo Credit: Green Office Makeover
Posted on October 29th in Solar Information by Dan.