With the quickly falling solar panel prices and lucrative solar incentives in abundance, now is the perfect time to install solar panels.
If you have heard anything about the solar energy revolution that is happening these days, that is already a step forward for the solar industry. When we were developing solar projects five years ago, the first step included convincing real estate owners that solar panels on their roofs would produce power.
Today, the industry is a lot more focused on the economics and bottom-line impact, as well as the benefits to the environment.
Solar energy is already cheaper than the grid-power in many states, even without incentives. This means that the cost of energy produced from the sun is equivalent to retail utility prices. This accomplishment is due to panel prices dropping 90 percent and solar installations growing tenfold since 2008. Now, billions of dollars are invested to fund solar projects. Large corporations like Google and Walmart have already built hundreds of solar plants of their facilities.
New Jersey is leading the way for solar for businesses
New Jersey is one of the leading states in the United States for solar. The state offers cash incentives to businesses that install solar on their roof. These incentives can cover up to 50 percent of solar system cost. On top of the state incentives, there are also federal tax credits that can cover another 30 percent of the system cost.
As we now know, solar power is already cheaper than retail rates so if you add incentives to the project’s revenue stream, you get a pretty great deal. Since regulators respond slower to changes than the market, there is a unique opportunity now in the market. Early adopters can and should take advantage earning hefty profits.
How can my business benefit from solar?
Installing solar panels on a roof will increase the property’s net operating income (NOI) and will generate cash within the first year. Real estate owners (and businesses) can benefit from solar in a variety of ways:
- Lower the property energy bill: With $0 down, you can simply buy the energy from the solar system at a significant discount compared to utility rates, cutting your energy bill by more than 50 percent.
- Lease the solar panels: With no money out of pocket, you pay your lease payments from the energy savings. Instead of wasting money paying the utility every month, you use that money towards your lease payments—which are lower than your monthly utility bill
- Get great return on investment: By purchasing the solar panels, real estate owners can benefit from the different federal and state incentives and enjoy 2-5 years paybacks on their investments.
So, what’s the catch?
Many real-estates owners have similar concerns, the main one regarding the roof life: “Will installing a system damage my roof?” or “How will it impact my roof insurance?”
Insurance companies handle solar installations frequently and, in most cases, there is no addition to the insurance premium. Additionally, the solar panels are ballasted and placed on rubber sheets. Therefore, there is no roof penetration or damage to the roof during installation. In fact, solar panels can extend the life of a roof as they block UV light, which is often the number one cause of roof degradation.
Another concern has been the maturity and stability of the technology. There are over 1 million solar systems in the US, transforming the industry to a multi-billion dollar industry. Panel manufactures are public companies and offer 20-25 years manufacturer warranty on their equipment. Further, panels are considered a commodity and are interchangeable between the different providers, eliminating the risk of a panel manufacturer going bankrupt.
For properties that meet all the necessary criteria, the opportunity is huge. The first step before “going solar” is to conduct a brief feasibility analysis and see whether the building is a good fit for a solar installation.
It is smart to hire a solar broker that can help you navigate the different solutions, check your roof, find you the right solar installer and verify the equipment. Here at SolarKal, the leading solar brokerage in the US, we will match you with an experienced broker at no cost. If the roof is right, the utility is supportive, and you have enough load, you might be a lucky winner and benefit from the energy source of the future.
Paul Abramson is a commercial solar energy broker with SolarKal and a member of the Meadowlands Regional Chamber’s Contractor and Building Services Committee.
The choice to incorporate solar energy or any other technology into a project is just one of the many decisions owners need to contemplate when constructing new or renovating existing facilities. The Contractor and Building Services Committee is comprised of knowledgeable Chamber members, from varied construction-related backgrounds, that are ready to assist owners in determining what building systems are the right fit for their project.