The Advantages and Disadvantages of Businesses Going Solar

October 5, 2016

 

BUSINESS BRIEF


Executives must weigh the advantages and disadvantages of solar energyMaking the decision to go solar isn’t something you do in a day. And it certainly shouldn’t be done without a thorough evaluation and careful assessment of both the pros and cons. To help get you started, we’ve put together three of the top advantages—and disadvantages—of pursuing a path toward investing in a commercial solar energy system.

In order to make the best business decisions, it’s important to have all the information available—both the positive and the negative. And frankly, there are situations where installing solar may not make great sense for your overall business strategy, your location or the regulatory environment in your area.

In many instances, however, the benefits of going solar far outweigh the drawbacks—and understanding both will help you make wiser, more confident choices for your business.

The Advantages of Solar Energy:

Solar Power Disadvantages:

 

In order to make the best business decisions, it’s important to have all the information available—both the positive and the negative.

 

The Advantages of Solar Energy

Solar can save you money

That’s likely the big one you’ll hear from every solar provider, and with good reason. By investing in a solar system, your business has the potential to reduce its electric bills. And depending on the size, location and efficiency of your installation, you could even eliminate them entirely. That’s because the energy you pull from your solar panels is not only used to power your facilities, it can also earn you credit with your local utility. When it’s sunny, you’re likely to contribute extra power to the grid. Then, at night or other not-so-sunny times when you need power, you can use that credit to help offset the cost of the electricity you’re pulling from the grid. For most organizations, the primary reason for going solar is to save money—with some projected to save hundreds of thousands of dollars (or more) in electricity costs over the life of their solar panel system.

Everybody loves a sustainability leader, especially your employees

Of course, going solar isn’t just a financial decision; it’s an environmental and brand decision, too. A growing number of businesses are installing solar panels in large part for the powerful statement it makes to their customers and employees about how much they care about the health and future of the planet. The solar panel installation at your location speaks volumes about your priorities—and people will take note. The fact that your company is committed to renewable energy can leave a lasting impression in your customers’ minds, show environmental leadership in your industry as well as your community and help you attract and retain top talent.

Solar is reliable and easy to maintain

Solar panels are an extremely reliable source of power that should last 25 years or longer. Of course, not all panels are created equal in terms of their reliability or efficiency. So it’s super important to ask the right questions of the solar partners you evaluate to make sure you get maximum dependability for your dollar. Once installed, commercial solar systems also require very little ongoing maintenance (outside of a yearly cleaning).

 

For most organizations, the primary reason for going solar is to save money—with some projected to save hundreds of thousands of dollars (or more) in electricity costs over the life of their solar panel system.

 

Solar Power Disadvantages

The up-front costs of solar can be high

There’s no denying that going solar costs money—and your initial capital investment in a commercial solar system can take a number of years to show a return. As with any significant purchase, it’s important to consider how your investment in solar power aligns with your overall business strategy, and make decisions accordingly. Keep in mind, too, that many up-front expenses can be mitigated by other financing options, including leasing the system from your provider or entering into a solar Power Purchase Agreement (PPA). Be sure to ask the providers you’re evaluating for a clear breakdown—and the break-evens—of each option. For more information, check out How Businesses and Public Entities Can Pay for Solar.

Your commitment must be long-term

As mentioned above, in some cases, solar’s up-front costs can be high. And even non-purchase options (like leasing and PPAs) that provide a faster path to savings usually require a 15-year or longer contract. For organizations that need to turn on a dime, or can’t commit to these longer-term implications, solar may not be the right choice. Again, it’s important to find a partner who’s willing to calculate and communicate the costs associated with the various financing options on your behalf—and look beyond the immediate cost-per-watt. That way, you can see what it takes to go solar today, and how much you’ll be saving in the years ahead.

Your location can limit your benefits

It may be a bit obvious to say, but solar panels require sunlight to generate electricity. And that means how much you’ll save on your utility bills every month—and how quickly you can recoup your capital expenses—will depend on a combination of both the exposure your panels get to the sun and your location’s physical footprint (i.e., where and how many panels you install). What may not be so obvious is that the discounts you’re eligible to receive and regulations you’ll have to follow also have a lot to do with where your facilities are located—and can have significant impact on your economics. Luckily, there are plenty of resources online that can help you find out exactly what the regulations and available credits are in your area.

SUMMARY

So there you have it. As you can see, the benefits of installing a commercial solar system—to your bottom line, the environment, as well as the reputation of your company—are substantial. And the drawbacks, while real, greatly depend on the strategy, fiscal objectives and physical location of your business. A thoughtful consideration of both the pros and cons will help you make a safer and smarter decision.

 

Related links:

PODCAST: Learn the Advantages and Disadvantages of Commercial Solar Energy Systems

VIDEO: The 3 Types of Onsite Commercial Solar Installations

Are Solar Panels Worth It? Evaluating Your Business’s Return on Potential Solar Solutions

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