According to Springfield Business Journal’s 2022 Economic Growth Survey, 89% of respondents say the cost of doing business has worsened in the last year. With inflation hitting a 40-year high this summer, and the Labor Department reporting energy costs are up 20% over the 12-month period ending in September, business owners have a reason to be concerned about daily operational costs.
Will Cox, CEO of Solera Energy LLC, however, has a sunny outlook on the future for businesses: solar power.
“For business owners, a significant portion of our overhead goes to energy cost,” Cox says of the growing expense line.
He suggests solar power as a way to curb those costs, with a quick return on investment.
“Solar gives business an opportunity to inflation-proof their electricity,” he says.
To put the savings in perspective, Solera Energy provides a case study that a commercial manufacturer with a 609 kW system captured first-year savings of $84,422 and up to $119,814 annually by year 10. The company estimates a payback period of five years, and after 30 years with solar power, the manufacturer would free up cash flow of $4.7 million.
For businesses, as well as residential owners, Cox says the first step in switching to solar is to find a reputable company.
“You want to make sure they have a proven track record of success, look at their length of time in the business, their warranties, if they have an in-house master electrician and their own crews, and if they are a member of the Missouri Solar Energy Industries Association,” he says.
The first part of the process at Solera is examining a potential customer’s utility usage and behaviors to help determine if solar power is the right fit.
“We are able to get an idea pretty quick if solar is going to make financial sense or not by examining their previous years’ utility bills,” Cox says.
If there is sufficient space for the panels and the system cash flows appropriately for the customer, the next step is to choose a finance avenue. Cox notes multiple options available to make installing solar power more cost effective, and one of them is through the newly signed U.S. Inflation Reduction Act. Those going solar can apply for a 30% federal tax credit for their solar power installations through 2032, according to Energy.gov.
In addition, Cox says with the IRS’ modified accelerated cost recovery system, or bonus depreciation, most solar power consumers “can get 50% to 80% of the system paid for them in tax benefits and local rebates where available.”
In the past, Cox says most solar energy users were businesses that had a tax liability. With more financial options and tax incentives available, such as the direct pay option, he says Solera Energy has been able to serve more schools, nonprofits and churches.
“The Inflation Reduction Act allows a broad spectrum of business types to see the financial benefits of going green that previously couldn’t because of the limitations in utilizing tax benefits,” he adds.
Aside from electric bills, Cox says clients indicate other benefits to implementing solar energy: the environmental and sustainability impact. Having solar panels help businesses score higher in the environmental, social and governance investment sector.
“Whether or not you agree with it, an ESG score is something a lot of investors are looking at now,” Cox says.
Solera Energy, along with partner Gardner Solar, in Missouri and northwest Arkansas for over a decade, works across the region to provide services to municipalities, businesses and residences of any size.
“The size of the systems installed is relative to energy consumption,” Cox says, noting Solera has worked on businesses that use the same power as a typical residential home, “all the way up to our 11-MW system you see at the Nixa Solar Farm, which is the largest in the state.”
This content is brought to you by Solera Energy LLC.
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