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.

Warehouse photoIn the case of commercial property owners, reduced energy and operating costs enhance the valuation of the property. Recently, the American Appraisal Institu
te 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.