Debates on the viability and benefits of solar power have been going on since the 1970s and, in that time, technological developments have increased efficiency and lowered costs. Solar panels have become ubiquitous now—we see them on parking lot canopies, peeking out from behind parapets on rooftops, and in full display on the side of pitched roofs. There are even solar shingles that are indistinguishable from regular roof shingles. Here are a few ways you might stand to benefit.
How many places on Earth are more perfectly situated to take advantage of the sun’s energy than Arizona? In a word: none. In fact, Yuma clocks in more sunny hours per year than anywhere else in the world. But being surrounded by an endless supply of beautiful sunshine is only one reason why adding solar to your business financial strategy might be worth doing.
Drastically reduce your energy bills
Financially, this may be the biggest and best reason to install solar. Most businesses do not foresee energy needs going down dramatically from their current levels. Assuming your business plan involves expansion, you most likely will be finding useful applications for more technology, which means your energy needs will increase in tandem. According to Electricity Local, an online resource of energy rates and usage information for local areas across the United States, the average Arizona commercial electricity bill is 22.73% greater than the national average monthly bill. Lowering your electricity bill helps your business maintain competitive equilibrium with companies paying lower rates.
Government incentives make the addition of solar financially attractive
The federal Business Energy Tax Credit for solar technologies is 30% of the total system cost and may be carried forward 20 years and back one year, if needed. The incentive drops to 26% for systems installed after December 31, 2020, then to 22% in 2021, and finally to 10% in 2022 where it will stay.
The Arizona state tax credit is 10% of the system cost and is capped at $25,000 per location, $50,000 per business. The state has a $1 million pool of funds available on a first-come-first-served basis for systems placed in service that year. It can be carried forward five years and, according to Arizona law, your property taxes cannot go up based on the installation of a photovoltaic solar system. There is a 1% charge for receiving the required certification letter from the Arizona Commerce Authority. If this sounds like an opportunity you might want to pursue, you should speak with your tax advisor soon for guidance. This incentive is due to expire at the end of this year, so you’ll want to act fast.
The list of companies that have added solar, or are using solar exclusively, is growing
Fossil fuel market volatility has helped to drive the expansion of solar since the Arab oil embargo in the 1970s. Having a stable source of energy is highly desirable, but when combined with the fact that the average price of an installed commercial photovoltaic system has dropped nearly 50% since 2012, it becomes irresistible. Companies such as Intel, Microsoft, Google, Apple, Costco, Wal-Mart, Target, and Kohl’s are relying on solar to defray operating expenses, but small and medium-sized businesses can also reap the cost-saving benefits of solar energy.
Solar moves us closer to energy independence and a cleaner future
When you decide to adopt solar as part of your business strategy, you take a step toward self-reliance. That’s always a good feeling! Furthermore, you are reducing the amount of CO2 in the atmosphere by using renewable energy, which is cleaner for the environment.
Arizona businesses have a golden opportunity to put those wonderful warm rays to work on saving you money. The sun is a powerful partner to have on your side.
Michael Trueba, CCIM is vice president, business banking for Vantage West Credit Union, a $1.9 billion financial institution which serves a growing Membership of nearly 150,000 via branches across Arizona and online channels, as well. Vantage West offers consumer and business banking services, and is federally insured by NCUA. VantageWest.org