The Dollars and Sense of Going Solar
There has been a lot of buzz about local businesses, nonprofits, and schools going solar, so we decided to address this hot topic at our September Better Business Challenge Lunch n’ Learn, “The Dollars and Sense of Going Solar and Other Pathways to Renewable Energy”!
More than 50 people joined us to learn about the benefits of solar power and to hear about the variety of renewable energy alternatives available if solar isn’t an option. Speakers included Nick DiFerdinando of Sun Tribe Solar, along with those whose organizations have gone solar in the last year: Martin Chapman, President of Indoor Biotechnologies, Jennifer Lehman, CEO of Hantzmon Wiebel, and Rob Orlando, Head of School at Peabody School.
So… what ARE the commercial benefits of going solar?
#1. The cost of solar installation is declining.
“The falling cost of ‘going solar’ in Virginia – 47% over the past 5 years – paired with various financial incentives at the federal and state level make this is a great time for businesses to incorporate solar energy into their operations,” DiFerdinando shared.
#2. The return on investment on solar is real.
Solar power can pay for itself within five to ten years – financial incentives alone can pay for up to 50% of the total project cost, DiFerdinando said. And considering that solar panels produce electricity for at least 25 years, once your investment is paid off, you can enjoy at least 15 years of free electricity.
The following details renewable energy financial incentives available on the local and federal level that can help your business save on solar system investments.
Federal Solar Tax Credit: The U.S. government offers a 30% investment tax credit for solar energy systems (2019 is the last year for full 30% ITC). Costs can be lowered further with 100% bonus depreciation at the federal level.
Rural Energy for America (REAP) Grant: This USDA program provides grant funding and guaranteed loan financing for up to 25% of the renewable energy system or to make energy efficiency improvements in rural areas, including Charlottesville.
Charlottesville Solar Tax Credit: The City of Charlottesville offers a tax credit for a part of the total cost of solar equipment, devices, or facilities. The tax credit will be applied to the building’s property tax over a five-year span.
Charlottesville Clean Energy Commercial Loan Program: Through a partnership between the City of Charlottesville, University of Virginia Community Credit Union, and The Local Energy Alliance Program (LEAP), this program offers interest rates as low as 0% on loans on renewable energy technologies and energy efficiency improvements.
Dominion Net Metering: Dominion’s net metering program allows customers to connect their renewable energy systems to the larger grid, and they will be paid for electricity generated in excess of what they need to power their buildings.
#3. Fix your utility costs to hedge against future volatility in the energy market.
Electricity prices are on the rise. DiFerdinando noted that in Virginia’s commercial sector, energy costs are climbing at a rate of +3.08% per year. Contrast this stat with the declining costs of solar installation, and sun-powered electricity looks more and more like a smart, sustainable business investment.
Aside from the financial incentives and favorable pricing on solar, more and more people – from consumers to employees – are paying close attention to how companies approach to sustainability. Market research (see Shelton Group’s “Millennial Pulse” 2017 special report) indicates that 59% of millennials look to companies to address social and environmental problems – and they are spending their money on sustainable brands as a “personal form of activism.”
“A company’s approach to sustainability has a big impact on whether Millennials choose to purchase from that company,” the report states. In fact, 70% of that demographic say a company’s environmental practices impact their purchase decisions. A 2018 Shelton Group report, “Brands & Stands,” backs up that trend, indicating that consumers of all ages support brands that have a greater social purpose. “64% of those who said it’s ‘extremely important’ for a company to take a stand on a social issue said they were ‘very likely’ to purchase a product based on that commitment,” the report notes.
Lunch n’ Learn speakers Lehman and Orlando both also reinforced that notion, saying that clients, customers, and employees appreciate being part of something bigger that helps the community at large.
So where do you go from here if you’re solar curious?
You can take that first step in deciding if solar power is the right choice for your business by simply contacting a solar provider for an estimate (most providers do this initial step for free), which typically includes an energy bill analysis, site evaluation, and comprehensive proposal. (Note: participants of the Better Business Challenge can earn 20 points from the Energy Scorecard by doing this step). The average process, says DiFerdinando, also involves a solar power agreement and financing options; then if it’s a “go,” you move to implementation of your solar energy system that includes ongoing monitoring and support by the installer.
Stay tuned for Part II of this blog post featuring other pathways to renewable energy!