There is now a significant case to be made for the adoption of solar systems usage in business, with many businesses of all sizes, right up to multi-nationals already reaping sizeable benefits for years. In many cases, the financial case alone wins the day, especially once government subsidies are factored in, alongside depreciation and amortization of upfront costs.
Once all the other benefits are considered, including enhanced reputations, meeting government environmental targets etc., solar systems and solar power present a very compelling case indeed.
The Growing Case for Using Solar Systems Usage in Business
Ultimately, all business decisions must be based on obtaining the optimum return on investment (ROI), tactically and strategically, for any given initiative. For most businesses, facilities cost rank as one of the top costs, usually only surpassed by people costs. Therefore, when considering the potential use of solar power, the question must first be assessed in light of the ROI, in all senses. Over the past several years, the case has improved markedly in favor of using solar systems to generate some or a significant portion of a company’s electricity. The key drivers for this case are:
Reduced operating costs
Solar power systems can significantly reduce the electricity costs for many businesses. Due to the falling unit costs of solar power, it is a serious contender as an alternative to energy that is reliant on traditional fuel sources (which unlike solar power, can and do fluctuate unpredictably in price – historically always rising over time – another key consideration when examining operating costs). The key takeaway here is that solar systems enable businesses to have far more control over one of their major costs – monthly power bills – by protecting themselves from escalating energy bills.
Attractive long-term ROI
Government incentives and the continuing reduction in solar system costs means that solar power is increasingly a sound investment that holds up over time for businesses (and public organizations). Installing solar systems essentially prepays for a portion of energy needs for decades to come, at just a fraction of typical energy costs, once current incentives, plus depreciation costs are factored in. In addition, solar systems have few moving parts and are typically guaranteed for 25 years, providing reliable, low-maintenance energy production that translates to a compelling ROI.
Electricity generated from solar systems results in less consumption of fossil fuels, thus reducing greenhouse gas emissions and pollution. Therefore, businesses using solar power are able to demonstrate their commitment to help mitigate the effects of global warming, and reduce dependence on traditional, non-sustainable (and often volatile) fuel sources. As a result, going solar not only makes financial sense directly, it also enhances the image and attractiveness of a business in the eyes of their customers, partners, employees and investors, thus bringing further financial benefits.
Types of Businesses Benefiting from Using Solar Systems
The applications for solar power in businesses are almost limitless, and the rapid growth in the use of solar systems in business attests to its attractiveness. The kinds of businesses that can benefit from the use of solar spans this sample list and beyond:
Catering, Hospitality and Leisure
Energy costs are a significant overhead for the hospitality and leisure sectors. Gyms, hotels and leisure centers spend sizable amounts of their running costs on electricity. On the plus side, these businesses quite often have roof space that is available for solar panels. Solar systems for these businesses can deliver significant energy bill savings and potentially earn extra income from energy that is fed back into the local grid. There are now an increasing number of innovative options coming onto the market, such as these free-standing devices.
Construction and Engineering
The construction sector is under increasing pressure to meet minimum renewable energy requirements, with many governments setting targets for a minimum percentage of electricity consumed by new buildings to be from renewable sources. Including a solar system into the building’s plans and construction budget therefore is not only an attractive way to meet these requirements, but one that presents a compelling financial case.
Farming and Agriculture
Agricultural operations can greatly benefit from making good use of their available roof and land space by installing solar panels. Not only would the resulting solar power reduce electricity bills, it can provide a ready means to generate valuable extra income by selling back surplus energy to the local power grid. In addition, operating in part or whole on solar power will enhance a farm’s green credentials, which can add to their attractiveness as a supplier to their buyers.
Owners of Commercial Property
For owners of offices and other commercial property, the benefits of reduced energy bills can be coupled with extra income resulting from power sold back to the local grid, making this a sound financial investment. It is also likely that an increasing advantage will be enjoyed by landlords who are recognized as having environmentally solar-powered buildings, even making this a visually impactful statement via free-standing solar installations like these in the public areas in front of these buildings.
Shops and Retail
For retailers with large overheads under constant cost pressure from the online market, cutting down on expensive energy bills via solar power is a compelling financial strategy. As with other businesses, retailers who switch to green energy can also enjoy a more positive image in the eyes of their customers and the wider public.
Warehouses and Manufacturing
With government pressure for all companies to reduce their carbon footprint and the manufacturing sector powering large machinery, installing solar energy is a good move. By helping the environment, it also sends a positive message to the rest of the supply chain about the company’s green ethics. Manufacturing companies may also be able to save costs through a PPA.
Government and Public Sector
In addition to the business examples listed above, solar energy is strongly recommended for the public sector to consider, for the same reasons given above. These benefits could apply equally to social housing, hospitals, transport and schools as businesses. In many cases, reducing the cost of electricity generation will also make a substantial saving to the maintenance of these buildings. Adopting solar power will also demonstrate greener thinking and innovative practices that are both environmentally and financially sound.
Schools, Colleges and Universities
Educational institutions often have sites with large roof spaces that could lend themselves very well to solar panels and their operations can equally reap the benefit of solar power generation. Beyond the financial advantages from solar power in reduced bills and possible income from feeding excess power back into the local grid, students and parents are likely to be aware of and positive in their support of renewable energy. In fact, it is quite likely that many will expect institutions of learning to lead the way in renewable, environmentally and socially conscious energy solutions, and reward those that do.
Hospitals and Healthcare
The energy needs of hospitals, clinics and medical practices (surgeries) can benefit significantly from the savings made from the use of clean solar power. And as per the other cases cited above, there is additional income to be gained from feeding power back into the local grid.
Solar Systems Are Also Widespread in Large Corporate Businesses
Finally, just to demonstrate further that solar power is now a major and growing source of energy in business, the following infographic shows the use of solar system generated power for the top 25 companies in corporate America:
In conclusion, there is huge potential for the adoption of solar systems to generate electricity across every sphere of business and government. In many cases, the financial case alone wins the day, especially once government subsidies are factored in, alongside depreciation and amortization of upfront costs. Once all the other benefits are considered, it becomes a very compelling case indeed.
Georg Kogler is the Managing Director of GK Electrics GmbH based in Liebenfels, Carinthia, Austria. GK-Electrics is a company specializing in the development and installation of individual photovoltaic solutions. GK-Electrics focuses on the design and implementation of individual photovoltaic systems for industry, trade and private households.
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