Is Solar Energy Worth It? Insights on Reducing Utility Costs

The price of electricity in the United States is rising, with no end in sight, and companies all over the US are feeling the pinch in their profits. A steadily increasing number of business owners are looking for sustainable alternatives, like solar energy, to offset these soaring energy prices. But the first question on many business owners’ minds is most likely: “Is solar energy worth it?”

Solar energy is indeed a smart business investment. You can reduce energy costs for your business by gaining energy independence, and it has a proven return on investment (ROI) for businesses of all sizes.

Why Are Utility Costs Soaring across the US?

The annual cost of electricity is rising nearly 4% per year. One contributing factor is that the price of natural gas and coal has gone up in recent years. Natural gas supplies approximately 40% of electricity production in the US, while coal produces closer to 20%.

Those rising fuel costs are combined with the need to upgrade aging electrical grids against natural disasters, and electric companies are passing these expenses down to the customer. The resulting volatile energy costs can have a huge impact on businesses. The US Energy Information Administration (EIA) estimates that commercial electricity use in the US will continue to rise by 3% in 2022 due to economic growth.

The US can meet this growing need for electricity with solar. The EIA also forecasts continued growth in the use of solar energy through 2023.

Is an Investment in Solar Energy Worth It?

Is solar energy worth it? The evidence says that it is. Investing in a solar energy system is a way for a business to protect itself against rising utility bills and become energy independent. Going solar allows your business to make an investment that will save on or even eliminate one of your highest operation costs: electricity. Solar energy enables you to pre-pay for the next twenty-five to thirty years of electricity.

By lessening your dependence on the electrical grid, you will no longer be subject to rapidly rising rates charged by utility companies. Businesses can greatly decrease their monthly energy costs by utilizing solar energy. Suppose that 25% of your energy needs are met by the US electrical grid, and the rest is produced from your rooftop. An $8,000-per-month electricity bill can be reduced to $2,000 per month, netting significant yearly savings.

For example, Home Dynamix had Geoscape Solar install an 825.630-kW panel system that now covers 98% of the building’s electricity needs.

Software company Infragistics wanted to reduce energy costs and reach new profitability goals. Geoscape Solar installed solar panels on piers, rooftops, and carports, covering 93% of the company’s energy needs.

Merit Kitchens, a family-owned custom-cabinetry business for three generations, is another commercial-project success story. Geoscape Solar installed a 47.415-kW panel system that meets 83% of this business’s energy needs.

Geoscape Solar customizes every solar installation project to meet the business’s specific energy needs and maximize the available locations for solar panels. Customers have used a combination of roof mounts, solar canopies, and ground mounts.

What Is the ROI of Solar Installations for Businesses?

The exact ROI of solar installations is difficult to quantify because it depends on many factors, including the business’s size and energy needs, the initial installation cost, federal tax credits, state renewable energy tax credits, and other incentives.

Simple payback is one method of estimating the ROI. This is a calculation of how many years the solar installation takes to pay for itself. However, this simple method doesn’t always take into account the following variables.

Size and Energy Needs

Businesses are different sizes and have varying energy needs. Each business property has different placement areas that are suitable for solar panel installation. ROIs will vary, but all businesses will enjoy a substantial ROI when investing in solar energy systems.

Funding Your Solar Installation

A second variable is the way that you choose to fund your solar installation. Some options involve no upfront costs, so you can enjoy energy savings on day one. Geoscape Solar business owners have various finance options, which include:

• A traditional power purchase agreement
• An easy own power purchase agreement
• Operating lease
• Capital lease
• Purchase loan

Incentives

A third variable is how your business utilizes available incentives. Whether you purchase a solar power system, lease one, or buy solar electricity through a service agreement, federal, state, and utility incentives make the economics of solar energy compelling.

The EIA forecasts strong growth in the solar industry because of incentives like the solar investment tax credit. The recently passed Inflation Reduction Act of 2022 includes a 30% tax credit for solar energy projects installed through 2034. This tax credit and other incentives can finance well over 70% of the cost of your system.

Energy Independence for Your Business

Is solar energy worth it? Yes. Gaining energy independence yields higher profits for the commercial sector because it enables you to avoid rising utility costs. Through solar energy, your business can benefit from lower energy costs and a solid ROI in a few short years.

At Geoscape Solar, we help businesses utilize solar energy for profit. Your business will become energy independent, be able to decrease utility costs, and leverage available solar incentives for a quick ROI.

To discover how installing solar energy on your property will increase your business profitability, contact one of our energy specialists!