Electricity costs are among the largest overhead expenses for most businesses. In areas with volatile energy markets, sudden rate increases can strain a company’s finances.

By generating electricity with commercial solar panels, your business can become less dependent on the grid and more resilient to power failures. This can help your business boost its reputation as a responsible corporate citizen.

Reduced Electricity Bills

Commercial solar systems help businesses gain a competitive financial advantage by lowering electricity costs. Utility bills account for a large percentage of a company’s operational expenses and are one of the most volatile elements of any business. As energy rates continue to rise, more and more forward-thinking companies are turning to solar power to help offset the cost of energy and foster an image of sustainability.

According to Judith Shadzi from Cosmic Solar, companies that invest in commercial solar reap many benefits including:

First and foremost, commercial solar panels significantly lower energy bills for businesses. Combined with financing options that require little or no upfront purchase, businesses can enjoy positive cash flow starting from Month One. The system also protects companies against future energy rate increases and allows them to sell any excess electricity back into the grid for free.

Increased Property Value

Many homeowners, buyers and real estate agents already know that solar energy systems can increase the value of a home. In fact, one study found that homes with solar energy systems sold for an average of $15,000 more than comparable homes without them.

Commercial properties can also benefit from the addition of solar panels. Unlike residential solar panels, which only have 60 or 72 cells, commercial solar panels are typically larger and more powerful. This allows businesses to produce a larger amount of electricity, so they can reduce their dependence on the grid.

However, the return on investment (ROI) for commercial solar panels will depend largely on the initial investment cost and how much energy your panels produce. Nonetheless, most businesses can expect to see a return on their investment within four to six years. This can be a great way to boost your company’s revenue while also helping the environment.

Tax Breaks

Businesses that use solar energy can qualify for tax credits. The Federal Investment Tax Credit, or ITC, provides 22% of the cost of a commercial solar system as an offset to federal corporate income taxes applied in the year of installation. Schools, religious institutions, and other exempt organizations may be able to take advantage of third-party ownership or tax equity financing to claim the credit.

Businesses can also sell 5 megawatts (MW) of power back to the grid in exchange for tariff rates up to 5 pence per kWh. This is known as Profitable Energy Generation, or PEG, and it can provide an additional revenue stream.

Building-integrated solar products, like shingles, windows, and facades, qualify for the ITC if their primary function is electricity generation. To claim the credit, a business must start construction or hire a company to begin work before year-end and file IRS Form 3468 on their tax return. The value of the ITC is scheduled to decline from 30 percent to 10 percent after 2023.

Reduced Carbon Footprint

Commercial solar installation systems are a great way for businesses to cut their energy bills and reduce their carbon footprint. They also help businesses demonstrate their commitment to sustainable practices and corporate responsibility.

Commercial and industrial (C&I) solar projects range from rooftop arrays to ground mounts, with sizes varying based on the electricity needs of a given business. These large-scale projects typically use more solar panels than residential ones, and can be sized to meet the electricity needs of a wide variety of businesses, including manufacturing, agricultural, retail and office complexes.

The C&I market lags behind the residential one, but is poised to take off. As more and more businesses realize the economic benefits of going solar, they are likely to invest in this renewable energy option. Solar energy creates no harmful emissions, and even when paired with an energy storage system that allows excess power to be stored for use at night, it significantly reduces the carbon footprint of a business.