For most businesses, profit is a primary metric of success and sustainability. For many, energy is a significant and constant expense that’s an absolute necessity just to keep their business running.
Energy prices continue to rise year over year, rising 11% from 2021 to 2022 and rising an average of 2.9% per year for the past 60 years. Given this, switching to solar should be a top priority for any business looking to optimize their expenses and maximize their returns on investments.
For most businesses, profit is a primary metric of success and sustainability. For many, energy is a significant and constant expense that’s an absolute necessity just to keep their business running.
Energy prices continue to rise year over year, rising 11% from 2021 to 2022 and rising an average of 2.9% per year for the past 60 years. Given this, switching to solar should be a top priority for any business looking to optimize their expenses and maximize their returns on investments.
Energy as an investment
By making an upfront investment in solar panels, solar power allows businesses to lock in a significant portion of their energy costs. This can lead to long-term financial savings, especially as utility rates increase over time. By generating their own solar power, businesses can now “own instead of rent” their source of energy and reduce their exposure to the volatile prices of grid electricity. This provides cost stability and predictability, making it easier for businesses to budget and plan for the future. Businesses are able to capitalize the cost of solar panel installations on their balance sheets, recognizing the expense over time through depreciation. This approach aligns with accounting principles, treating the investment in solar panels as a capital asset with enduring value rather than a routine operating expense. With an investment in solar panels, businesses will have the ability to hedge against future utility price hikes, bringing a significant return on investment over the lifespan of their solar panels.
Energy independence, continuity, and compliance
While it’s increasingly easy to make the financial case for solar, it brings with it a variety of other benefits for businesses as well.
By generating their own electricity, businesses become less dependent on the grid, reducing their vulnerability to grid outages or disruptions which have the potential to last for crucial hours or even days. Having your own power source greatly enhances your energy security and business continuity in the case of a large weather event or other catastrophe.
Adopting solar power is also helpful for aligning with corporate sustainability goals and demonstrating a commitment to environmental responsibility. Businesses can reduce their carbon footprint and use their commitment to sustainability as a unique selling point. This can differentiate them in the market, attract environmentally conscious customers, and contribute to building a positive brand image. In industries that have renewable energy mandates or targets, adopting solar power can help businesses meet regulatory requirements and avoid potential penalties.
The bottom line
In addition to the benefits above, there is one last item that makes solar even more viable for businesses looking to save money on utility costs. The Investment Tax Credit (ITC), allows qualifying businesses to deduct a minimum of 30 percent of the cost of their solar panel systems from their federal taxes. Many state and local governments offer additional financial incentives, tax credits, and rebates for businesses that invest in solar power. These incentives can significantly reduce the upfront costs of solar installations and enhance the return on investment.
So, for any business with a focus on profit and a constant need to optimize all costs and maximize ROIs, solar should certainly be a top priority. When the financial benefits can be shown clearly on your bottom line, all the additional benefits that solar brings are just icing on the cake. Contact us today to see how we can help you get started.
