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Why Solar is Powering More Businesses

Today, commercial property and business owners can find substantial benefits by investing in solar. For starters, rooftop solar photovoltaic(PV) systems under the current SREC II system 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 very excited about this valuable incentive for their clients who can utilize the credits.

  • Massachusetts’ net metering laws enable PV system owners to receive credit for energy produced.

  • Solar Renewable Energy Certificates (SRECs) allow solar developers to monetize the environmental benefits associated with developing solar, and in turn, generate a significant revenue for a project.

  • For businesses, 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 costs and reduced operating costs enhance the valuation of the property. Recently, the American Appraisal Institute created a tool for appraisers to use that clearly quantifies the additional value imputed by solar development on the site. In addition, adding solar to a building can increase the rental income, adding to the building’s net operating income, and again, 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.

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