Why Solar is Powering More Businesses

Today, commercial property and business owners are seeing substantial benefits by investing in solar. Solar photovoltaic (PV) systems offer an attractive return on investment, achieving a 12+% return during the life of a project. Essentially, solar development creates a 25-year revenue stream from a previously unused asset. Currently, among the chief incentives for solar investors are: 

• A 30% federal investment tax credit and accelerated depreciation. Developers are investing funds they would otherwise use to pay federal income taxes to create an income-producing asset. Accountants and investment advisors are excited about this incentive for their clients who can utilize the tax credit.
• Massachusetts’ net metering laws enable solar system owners to receive credit for energy produced.
• Solar Renewable Energy Certificates (SRECs) enable solar developers to monetize the environmental benefits associated with developing solar, in turn, generating revenue for a project.
• For businesses, sharp price swings in energy costs can make it difficult to plan or budget. Solar provides a hedge against energy price volatility by enabling a company to secure stable, long-term energy prices over a typical 25-year project life. 

In the case of commercial property owners, reduced energy and operating costs enhance the valuation of the property. Recently, the American Appraisal Institute created a tool for appraisers that clearly quantifies the additional value imputed by solar development on a site. In addition, adding solar to a building can increase rental income, adding to the building’s net operating income, thereby, enhancing value.    

Finally, installing a solar system says a lot about a company’s commitment to sustainability and reducing carbon emissions. Businesses generally want to support businesses that are environmentally responsible. Going solar is a great way to improve brand reputation and demonstrate leadership.