How Businesses Can Benefit From Using Renewable Energy
Renewable energy is defined as energy that comes from a source that can naturally replenish itself on a human timescale. And considering our sun has about 7 to 8 billion years left in its lifespan, it’s safe to say that solar is the perfect source of renewable energy for both residential and commercial properties.
But regarding commercial properties specifically, renewable energy from solar installations delivers a bevy of benefits that can help businesses continue to thrive—perhaps not for billions of years, but definitely for the foreseeable future
Not only does delving into sustainable energy help your bottom line with monthly electric bill savings, it also has the power to attract new clients and customers and ensures your company is a good steward of the planet at large. Indeed, a conversion to renewable energy is worth the effort and here are the reasons why.
1. Lower Energy Bills
Of course, the primary driver toward solar for most businesses is the need to reduce utility bills. And with the oil and natural gas industry reaching maximum volatility, solar continues to be the best option for businesses searching for some serious cost savings. The average business in the U.S. pays close to $560 to utility companies each month. On the other hand, businesses that install solar panels are able to cut their bill by nearly 90 percent or higher—totally erasing electric bills from the bottom line.
Investing in solar panels to harvest energy from the sun can be an economically intelligent purchase for your business. Because you don’t need to worry about competing for resources, you can ensure your solar panels will keep your energy costs low for years.
2. Boost Your Business’s Reputation
As a business, you want to show your clients, customers and community that you care about their well-being. This goes much deeper than just providing your customers with the best quality products or services. You need to make smart business decisions to prove to your audience that you have their best interest at heart and that your values align with the strategic choices you make.
Outfitting your business with solar is the perfect way to show customers you care about more than saving money (and you can save money while doing it). During a time when leaving as small of an impact on the environment as possible is important, you want to go above and beyond to exceed your target audience’s expectations. Making the choice to use renewable energy over forms of traditional energy could be the difference between a client choosing your business over the competition.
3. Cover System Costs with Grants
As utility costs continue to rise, businesses now have the opportunity to take advantage of a number of programs that can help to reduce overhead. These programs provide the opportunity to obtain grants for the equipment and installation of clean energy sources, including solar.
One such program is the Rural Energy for America Program (REAP), a federal incentive designed to assist small and rural businesses, as well as farmers, obtain energy efficiency upgrades and install new solar systems. REAP provides solar panel grant funding for up to 25 percent of new solar installation projects.
4. Enjoy a Federal Tax Credit
The solar Investment Tax Credit (ITC) is one of the most important federal policy mechanisms to support the growth of solar energy in the United States. Since the ITC was enacted in 2006, the U.S. solar industry has grown, creating hundreds of thousands of jobs and investing billions of dollars in the U.S. economy in the process.
The ITC—or the federal solar tax credit—allows you to deduct 30 percent of the cost of installing a solar energy system from your federal taxes as part of the Inflation Reduction Act. The ITC applies to both residential and commercial systems, and there is no cap on its value. This applies to companies that buy their PV system outright, either with a cash purchase or solar loan. The 30 percent applies to both business and residential projects, including projects installed in 2022, and will last until the end of 2032.
Solar is also a fully depreciable asset in year one, which reduces taxable income. Depreciation on solar panel arrays is one of the best ways businesses can keep installation costs down and ROIs high. The Tax Cut and Jobs Act of 2017 brought with it the option for 100 percent bonus depreciation on solar panels. This helps businesses recover any costs associated with a solar installation.
5. Become an Industry Leader
No matter your industry, real profits begin to roll in when you’re thought of as a leader in your sector. Part of being a business owner is making swift, smart decisions that accelerate your company ahead of the competition. One such decision is the switch to solar, as opting for renewable energy can set you apart from the competition.
Investing in solar energy before other companies can paint your organization as forward thinking and on the cutting edge in the industry. Other businesses will see your shift to solar as a trend they need to follow. And once that happens, you’ll continue to lead your industry in trends and behavior—and consumers will also take notice.