Top 5 Reasons to Install Solar for Your Commercial Property

January 13, 2023
January 13, 2023 Meissner

Top 5 Reasons to Install Solar for Your Commercial Property

Financial Drivers and Benefits in 2023

1. Significant Return on Investment (ROI)

Solar is a low-risk, high-return financial investment. Solar pays for itself in a range of 3-10 years*, and solar PV systems have a lifespan of 25+ years – that’s 15+ years of no-cost energy. The time it takes to break even (solar payback period) depends on several factors, such as the cost of the solar PV installation, property location, and current energy consumption.

2. Tax credits will minimize your investment

The Inflation Reduction Act (IRA) of 2022 establishes and extends the federal Investment Tax Credit (ITC) for solar photovoltaic (PV) systems at a rate of 30% of the total PV system cost. The 30% ITC was extended for 10 years, through 2032. Unlike tax deductions, this tax credit can be used to directly offset your tax liability dollar for dollar.

3. Reduce overhead costs and increase your Net Operating Income (NOI)

Boost your cash flow by significantly decreasing the operating costs for energy and creating roof rent income for Ownership. Solar energy could become a source to generate additional revenue through monetizing assets like roof space and parking lots.

4. Attract and retain more tenants

Installing solar panels will significantly decrease tenant electricity bills. Not only will you attract tenants looking to save money, but you will also be more likely to attract tenants interested in sustainability practices. Solar Energy increases the reasons for tenants to renew their leases and enhances the property value for future tenants. You’ll be making the first step in promoting an eco-friendly community and building a greener reputation for your business.

5. Safeguard the planet AND your business by going green

The sun is a source of clean, sustainable, and renewable energy. Utilizing solar energy will not only reduce your carbon footprint and decrease pollution, but also safeguard your business against rising grid prices and boost your property’s value.

*The California Public Utilities Commission (CPUC) has finalized the rules for Net Energy Metering 3.0 (NEM-3), which will take effect on April 14, 2023. The rule change results in a significant reduction in the value of energy exported to the grid from an onsite solar energy system. Currently, under NEM-2 solar systems receive close to retail-rate for any electricity that is not used onsite and sent back to the electricity grid. Under NEM-3, the credit value for exported energy will be in line with wholesale rates, which average $0.02-$0.05 per kWh (a ~70% reduction in value). Luckily, there is a short window of time until April 13th to register projects under the NEM-2 rules. The qualification for ensuring a system is granted NEM-2 status, which contains a 20-year grandfathering period, do not require the system to be installed or operational by this deadline. Rather, an interconnection application must be submitted to the relevant utility (SDG&E, SCE or PG&E) and marked as complete by the deadline. The project would then have a 3-year window to be installed.

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