Over the past decade, the financial risk-reward debate on solar power efficiency and return on investment (ROI) shifted from speculation to facts. Eighty-four percent of large corporations surveyed say they either plan or will consider to invest in renewable energy over the next five years.1 Additionally, numerous case studies and other reliable sources substantiate how solar power cuts overhead, boosts profits, increases market share, and even generates ROI. Learn why solar power solutions make good business sense-and how to pay for them-in this five-step guide from KeyBank.
Fact: Electric bills may account for 20% or more of a company's total operating expenses. However, a self-contained solar energy system can cut electric costs by 50% or more.
Powered by a natural, sustainable resource, solar-based power bypasses unstable fuel expenses and energy prices typically associated with electricity generated by old technologies. In other words, as traditional energy rates vary and rise, the fuel of solar energy stays at a fixed rate: Free.
We're living and working in a new age of solar power, and many businesses throughout the U.S. are learning to capitalize on it. Let's take a closer look at today's solar energy market and the ways in which you can benefit from it.
To understand solar energy's position in current market trends, let's review what happened in 2016:
Here's another reason for solar energy's popularity: The dramatically lower price of solar energy technologies.
For instance, in 1975 the cost of a solar panel was about $100 per watt. By 2016, the price dropped to less than 45 cents per watt-a cost decrease of nearly 99.5%. In fact, just over the past eight years or so, solar power costs have decreased at least 70%. Consequently, it's not surprising to learn that installing a solar energy system today is at its most affordable point ever.
While the new tax reform has impacted many equipment-related deductions, Congress continues to support businesses investing in clean energy technologies. The 30% Business Energy Investment Tax Credit (ITC) remains intact through 2019, with a gradual phase-out plan beginning January 1, 2020 - 2022.4 Even without the benefits of credits and incentives, an investment in solar energy is still worthwhile.
From a business perspective, "going green" is a profitable cash play-a smart, strategic move with a bottom-line payoff. Furthermore, investing in alternative energy also adds value to your business assets, brand identity, and marketing and public relations initiatives. Increased profitability, empowered assets, and enhanced public image all add up to a competitive edge in the marketplace.
While this all makes good business sense, you still need a fair sum of capital to launch a solar initiative. Equipment financing offers an economical, turnkey alternative to cash, lines of credit, or even loans. Why? Many organizations use financing because it not only preserves precious business capital, but it also expedites their renewable energy projects. It also offers many flexible features that enable them to stay competitive, regardless of the rapid speed of technological advance.
When you finance a solar power investment, you have access to an immediate credit source that allows you to bypass large, upfront down-payment requirements that deplete your cash reserves. Other benefits of financing renewable energy projects include: