Understanding the Benefits of Commercial Solar Financing Options
Going solar offers numerous benefits for commercial businesses, including environmental sustainability, attracting eco-conscious consumers, and significant cost savings. By utilizing solar energy, companies can effectively eliminate their electricity bills, potentially realizing thousands of dollars in savings over the 25-35 year lifespan of the panels.
Nonetheless, solar is a large investment for businesses to undertake, and while incentives and rebates significantly reduce the cost of solar, making a solar payment can be quite a daunting task to complete all at once. This blog post explores various financing options to help businesses make informed decisions when purchasing commercial solar panels and ways to make purchasing solar a lot easier.
1. Cash purchase
Paying for solar panels in cash is the simplest option. An upfront payment allows you to become the sole and immediate owner of your panels, resulting in a slightly faster return on investment. This effectively covers the cost of electricity for over two decades. However, paying in cash may not be feasible for many commercial businesses, which is why loan options are frequently considered.
However, bear in mind that there are several ways to reduce upfront costs, such as the Federal Solar Tax Credit, which can recover 30% of your installation costs. Some states offer further incentives via tax depreciation, such as California, where the five-year depreciation schedule called MACRS- Modified Accelerated Cost-Recovery System can help businesses recover a further 25%-30% of installation costs.
A popular way to purchase solar panels is through a solar loan. With a variety of loans available based on terms, interest rates, and payment amounts, you can pay off your solar at your own pace. You will own your solar panels, and your monthly payment will be lower than what you would otherwise pay for your electricity bill without solar.
Our return on investment period for solar panels ranges from 5-8 years, providing several years of cost-free electricity after the initial installation expenses are recovered. Solar panels have a lifespan of 25-35 years and with proper care can even last up to 40 years. In light of the unpredictable inflation of energy generated from fossil fuels, now is an excellent opportunity to reduce overhead electricity costs by utilizing clean, renewable energy and enhance your financial stability.
3. Leases and PPAs
Another way to acquire solar panels is to opt for leased solar panels. You will not own the installation or qualify for any tax credits or incentives, but you will benefit from a fixed rate for the solar panels and save between 10%-30% on your electricity bills for around 25 years. In the long term, owning solar panels provides better electricity savings- up to 100% of electricity consumption.
Leases and PPAs (power purchase agreements) were popular solar financing options when solar panels first entered the market, with solar incentives and other financing options available, this became a not so opted option. Also, solar leases can make it difficult to sell property in the future, whilst fully owned solar installations can raise property value by around 4%.
4. IE Construction loans
IE Construction offers attractive loan options for commercial solar customers. Unlike leases or PPAs, IE Construction offers loans that ensure businesses own their solar panels upon purchase. Simply contact us to get in touch, and one of our advisors will appraise you of our solar loan options.
IE Construction is committed to providing top-quality solar installations, working seamlessly alongside businesses to make sure they get commercial solar quickly, professionally and without a hiccup. Click the link below to contact us today and find out how IE Construction can help your business make the switch to solar energy.