JAX Ranch & Home selected Namasté Solar to design and install a solar array on the roof of their Lafayette location. The solar array is expected to cover 100% of their energy usage.
On-site commercial solar energy offers you the opportunity to reduce your utility costs and replace that expense with an asset. The money that you would usually be paying to the utility company can instead be used to purchase a solar asset that will give you a significant return on investment (ROI). And because utility electricity rates continue to rise, the value of the energy offset from solar rises over time as well.
In addition to a money-generating asset, solar provides significant tax benefits. The Federal Investment Tax Credit is still in place, and the current depreciation schedule allows you to depreciate the asset fully in year one. These tax benefits amount to almost 50% of the project cost, which can be recouped after the first year of operation. The tax credit is currently 26% in 2020 and will drop to 22% in 2021. After 2021, the credit for commercial will drop to and remain at 10%. With the tax credit stepping down and utility incentives available for a limited time, now is the ideal time to go solar.
When considering solar for your commercial property, there are a few key factors that determine your solar ROI. The first is system design. The design of a system is key because these are technologically advanced, complex capital investments that require thoughtful design, detailed engineering, and quality installation. A well-designed system that carries with it a higher price often delivers a better ROI than a lower-cost system designed and installed by an inexperienced solar installer. Find a solar partner with in-house design and engineering expertise to maximize your ROI. They will be able to design a solar solution to match your unique needs, can streamline the process, and will know all local code and utility requirements.
Financing is another key factor to consider. When you own your solar system, instead of leasing the system, you are able to take advantage of generous tax incentives. The Colorado Commercial Property Assessed Clean Energy (C-PACE) program has been a game changer for solar because it offers financing for up to 100% loan to cost, and it’s long-term, fixed, non-recourse, and non-accelerating. This financing is linked to the building via a special assessment on property taxes and is transferable upon sale.
Additionally, Xcel Energy’s Solar Rewards Program is offering 20-year contracts to purchase renewable energy credits (REC) for 3.75 cents per kWh produced, regardless of whether you consume it on site or not. For a 500 kW system, or approximately 70,000 square foot rooftop, that amounts to REC income payments of over $27,000 per year.
Solar doesn’t make sense for every property, but for many, it offers a compelling opportunity. And the best time to go solar is now. Don’t leave money on the table by thinking solar is a decision that can be left for later.