Solar for Business: Why Go Solar

Companies are always on the lookout for investments with high IRR and ways to mitigate ESG risks. One investment that can help meet both of these goals is solar energy. Financial incentives can help offset the upfront cost of solar installations, and the long life spans of photovoltaic systems ensure stable energy costs for decades. Read on to learn more about why companies should include solar into their business strategies.

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Corporate Social Responsibility

More than a trendy catchphrase, corporate social responsibility has become an important part of a company’s public image and financial standing. Investors, not just consumers, consider social responsibility when they make decisions, and companies that measurably demonstrate good environmental stewardship can increase their chances of securing investments.According to Forbes, "[i]nvestment that takes into account environmental, social and governance (ESG) issues now represent one in every four dollars invested in the US." Being environmentally-conscious is quickly becoming a priority of everyday business, and companies that deploy sustainable practices are enjoying a competitive advantage. In 2018, Bank of America Merrill Lynch found that firms with stronger ESG records outperformed their peers, enjoying higher returns over the course of three years and higher-quality stocks (HBR).Additionally, a firm can improve its public image by promoting increased sustainability. According to a 2015 study, companies that demonstrate support for the environment see higher percentages of customer loyalty and trust. As opposed to vague promises, using solar energy can provide quantifiable evidence of a firm's sustainability efforts that can help satisfy customer demand.

Compelling Financial Returns

With the numerous financial incentives at a local, state and national level, solar energy has a very compelling business case.The federal Investment Tax Credit (ITC) for solar projects allows owners to offset their tax payments by 26% of the eligible cost basis of a solar installation. In addition to the federal ITC, there are various state and utility incentives for solar projects. These include Solar Energy Renewable Credit (SREC) programs, net-metering structures, Community Solar programs, and upfront grants. To learn more about these specific programs and more in your state, read our blog on solar policy updates here.

Control Energy Costs

One of the most concrete benefits of a commercial solar system is having greater control over energy costs. Buying energy from a utility means firms are subject to fluctuations in energy prices. This makes forecasting energy costs challenging. In addition, many utilities charge more for energy use at peak times. A firm that generates its own solar power will have predictable energy costs for the life of the system, meaning that budgeting for energy costs will be simpler for 25+ years.Moreover, battery systems, in conjunction with solar arrays, can improve the reliability and financial return of a solar installation. Having energy storage as part of a solar installation can allow corporations to take advantage of pricing strategies, such as peak shaving and time-of-use charges, that help maximize their savings.Businesses looking for financial, environmental and branding benefits should consider how solar energy can boost their bottom lines and fulfill their corporate responsibility goals.For more than 10 years, PowerFlex has provided turnkey solar and energy storage solutions to clients such as Amazon, Target and Bloomberg that help lower energy costs, increase property value and meet sustainability goals. We manage all aspects of the solar project, from development to execution and asset management, and work with real estate owners and tenants to make the process as simple and seamless as possible. Contact us today for a free solar assessment, and see how solar energy can work for your company.