If you’ve considered adding solar power to your commercial property, you’re not alone. More and more commercial property owners are utilizing solar energy to add value to their asset, reduce operating costs, and achieve sustainability goals.
When done well, a solar power project can be beneficial to not only a property owner, but their tenants, customers, and employees as well. Let’s look at the benefits of solar power for commercial properties, as well as what to consider before installing a solar energy system.
Solar power can be good for both the environment and your bottom line. It can help you reduce your company’s emissions and meet your sustainability goals, while also lowering your energy costs.
With energy costs creeping up more and more each year, producing your own electricity via solar panels can help you save on energy costs now, as well as future-proof your business against energy price volatility and inflation.
Customers, employees, and tenants alike will appreciate you taking steps to reduce your carbon footprint and energy costs. Sustainable energy programs can help you improve customer loyalty, recruit top talent, and attract desirable tenants for your buildings.
According to PwC’s 2021 survey on environmental, social, and governance (ESG) initiatives, 83% of consumers want the companies they do business with to ”be actively shaping ESG best practices.” In addition, 86% of employees “prefer to support or work for companies that care about the same issues they do,” including sustainability.
Adding a solar energy source could also win you some tax breaks. For example, the Solar Investment Tax Credit (ITC) allows you to recoup 30% or more of your new system’s cost via a credit on your federal taxes.
In addition, you could benefit from bonus depreciation, allowing you to take the full depreciation benefit of a new solar energy system in the first year of your investment, rather than spreading it out over time.
These are only a couple of examples—there may be more incentives available in your area to help make solar power financially feasible for you. Make sure to check with a tax professional regarding all available tax incentives for your business.
Solar power is a low-risk investment. Today’s solar technology is extremely reliable, with decades of successful use cases under its belt. In addition, solar’s return on investment is not dependent on economic cycles.
To reduce your risk further, make sure to choose quality solar equipment backed by extensive warranties so the manufacturer will take responsibility if it doesn’t perform as it should.
Installing a solar energy system is an investment that pays off over time, but it can take a few years to generate enough electricity to pay for itself. If you have plans to relocate your business within the next few years, it might be prudent to hold off on installing solar power until you’re settled into your new space.
When placing a solar power system, there are two main factors to consider: space and sunlight. When you think of solar power, you might picture a couple of solar panels attached to the roof. But for the most part, commercial and industrial solar systems are much larger than residential ones. And, of course, solar panels need sunlight to function.
Keeping that in mind, it’s clear that not every location is ideal for solar energy. For example, if your roof doesn’t have sufficient sun exposure or can’t support the weight of solar panels, you might need to find an alternate location for your solar power installation, such as mounting them on the ground or installing a solar carport above your parking lot.
Another aspect to consider is the condition of your roof (assuming your solar panels will be installed there). If your roof is on the older side, it might make more sense to hold off on installing solar power until you replace the roof or consider other placement options.
However, in many cases, today’s solar energy technology can be constructed with minimal attachment to the roof. Roof-warranty-compliant methods are available that ensure the integrity of your roof and maintain its warranty. Bonus: solar panels help protect your roof from UV exposure, potentially prolonging its life!
Often, a commercial lease agreement will enable the property owner to maintain control over the building’s physical envelope and electrical systems…but not always. Some lease agreements give control of these elements to the tenants.
If this is true for your building, it’s important for you as the building owner to bring the tenant into your solar project planning process early on to ensure the tenant’s needs and rights are not impeded.
When in doubt, consult with your legal representation to make sure your project follows the terms of your lease agreement.
At APPRO Development and CERRON Commercial Properties, we strive to bring you helpful, relevant insights to inform your real estate, development, and property management decisions. If you’re considering a commercial real estate purchase, sale, or build in the near future, we’d love to assist you. Contact us today to discuss your goals and learn how our team can help you reach them.