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ROI Calculator: Commercial Solar Panel Installation

The use of solar energy for both commercial and residential purposes has grown dramatically in the last 15 years. It has become an increasingly appealing and cost-saving energy solution for businesses and residential users.

The Benefits of Solar Power for Commercial Buildings

It is essential to know that solar power offers significant benefits for businesses of many sizes, not just the big guys. Here are the benefits that solar power provides: 

  1. A great return on investment. Solar panel installation is not simply an expense. 
  2. Operating cost reduction. Once the solar panel costs are paid off, the operating expenses of a business will be reduced. 
  3. Energy bills stabilized and controlled. A business will be able to predict its monthly energy costs more accurately, and it will be protected from fluctuating (and rising) energy bills. 
  4. The property value will be increased. 
  5. Tax credits and bonus depreciation can be realized. 
  6. Improved cash flow will be achieved because fewer dollars will flow out to the power company. 
  7. The business’s brand image will be improved because consumers will appreciate its move to greener energy. 
  8. Going solar will help address today’s growing environmental problems. 
  9. Low maintenance and high reliability. The photovoltaic cells in solar panels rarely break down, and panels come with a 25-year warranty. Many last 30 years or more and still provide solid energy production. 
  10. Versatility. Solar panels can be combined with other forms of renewable energy, like ground source heat pumps, for example, for even greater energy value. 

How to Calculate ROI for Solar Panel Installation 

The return on investment for solar panel installation is calculated by adding the lifetime cost of electricity from the utility and subtracting it from the lifetime cost of solar. 

The lifetime cost of solar includes equipment, shipping, installation, permitting and inspection fees, financing fees, grid connection fees, maintenance, and part replacements. Subtract from these costs applicable federal, state, and local incentives and rebates. 

Installation costs comprise a high price of the total solar power project. Installation costs should include all design, power requirements, and functional features and considerations. 

State and county governments generally charge fees to inspect and permit solar panel installations. 

solar-panelsSolar panels typically require little maintenance because there are few moving parts. However, it is essential to inspect them to make sure the panels are not damaged and that panels are kept clean. Panels are warranted to last for 25 years, so future replacement costs should be factored into the ROI equation. String inverters typically last 10-15 years, so they must be replaced at least once during the panel warranty period. 

The utility billing structure will also determine a business’s ROI calculations. A company may be able to sell excess power from its solar power system back to the utility in what is called “net metering.” The generation of more power used in a month is returned as energy credits against future bills. 

Tax credits and incentives are used to reduce solar power project costs. The Federal Solar Investment Tax Credit (ITC) was enacted in 2006. Its benefits in a phasedown schedule were extended for two more years in 2020. Federal tax credits are given based on the cost of solar power investments. The schedule for tax credits is currently: 

  • 26 percent for commercial or residential solar projects that started construction in 2021 or 2022. 
  • 22 percent for commercial or residential solar projects that start construction in 2023. 
  • 10 percent for commercial solar projects that start after 2023, with zero tax credits for residential projects. 
  • Commercial projects with solar power placed in service before January 1, 2026, can still receive the tax credits according to the applicable 26 or 22 percent rates. 

Solar Power Efficiency Factors 

Here are some factors that influence the efficiency of a commercial solar power installation: 

Sun Exposure. The amount of sunlight exposure that a system gets determines how much energy a solar panel installation will deliver. The higher the production, the faster the payback period, and the higher the ROI. So, for example, solar power is more efficient in Arizona, Florida, and Southern California than in Alaska or Maine. 

Shading. If there is shading above the solar panels, that will reduce the output of the solar panels. 

Mount angle and orientation. Solar panels work most efficiently when they face directly into the sun, so professional installers will work to tilt the panels at an angle equal to the business’s latitude. 

How to Maximize Your Investment in Solar Power 

To get the best ROI from your solar power installation, follow these tips. First, be clever with energy use. Second, invest in solar battery storage. Third, get an expert solar power installer that will offer work on a warranty. Fourth, maintain the system well. And fifth, take advantage of all federal, state, and local tax credits and installation incentives. 

Factors in Assessing Solar Power for Your Business 

To determine if solar power can work for your business, consider these aspects: 

  1. Look at how solar power may fit into your corporate mission. 
  2. Examine your company’s financial situation to see how solar power will work for you.  
  3. Look at your investment options. 
  4. Understand and assess the time commitments required for the project. 
  5. Identify if there are any risks for your organization. Do thorough due diligence on solar power installation vendors and be confident about the qualifications of the vendor you choose. 

What Staco Electric Construction Company Can Do for You

Staco Electric Construction Company offers a wide range of services for electrical and technical systems. 

We can take care of any job you have, whether it’s the long-term maintenance of your office building, replacing old wiring with a new system, or making sure task-critical electrical equipment is operating correctly and efficiently. 

We can build or install any electrical system required in your commercial building. We install high-efficiency systems designed to be the most cost-effective on the market and geared to your particular property. We are committed to building the most reliable electrical system for your needs.  

Our Renewables Division provides design, engineering, installation, and service of commercial solar and energy storage systems. We offer services to various business segments, including industrial, educational, military, healthcare, and non-profit organizations. 

Our custom systems are built with innovative technology and products sourced from the world’s premier manufacturers. They are designed to reduce overhead, allow for lower energy costs, and support the planet’s health. 

Choose an Experienced and Proven Solar Power Construction Company 

Contact Staco Electric Construction Company, based in Kansas City, MO, and serving the commercial construction industry in Kansas, Iowa, Nebraska, Missouri, and Oklahoma. 

Since 1971, Staco Electric Company has earned a reputation as one of the Midwest’s most experienced and highly recommended electrical and data/communications contracting services. 

With a comprehensive knowledge of new technologies, as well as systems that have been installed for years, we’re the Kansas City region’s service and installation specialists. 

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