Cost-Benefit Analysis of Commercial Solar Panels
As the cost of energy continues to fluctuate, many businesses are turning to renewable energy sources, such as commercial solar PV panels to reduce their expenses. There are many financial benefits of solar panels for businesses, which is why they are becoming one of the most popular renewable energy resources.
Excel Energy have over 30 combined years in the solar power industry and has seen first-hand how much of a difference a commercial solar panel system can make to a business.
In this blog, we discuss the cost benefits of installing a solar panel system for your business.
Average Financial Cost Of Solar Panel Installation
Before understanding the cost benefits of a solar system, it is important to understand the initial costs you will face when installing the system.
However, we can’t give a specific installation cost because there are a number of factors that will influence how much you will need to spend on a system.
- District Network operator’s permission (DNO)
- Size of the system
- Energy production needed
- Type of mounting system used
- Energy storage solutions required
- Inverters set up
- Cost of materials at the time of installation
- Which option provides optimal efficiency and returns for your investment: Standard Inverter Setup, Optimised Inverter Setup or Microinverter Setup
At Excel Energy, we provide a completely bespoke system for each of our clients, therefore every project differs in price.
Financial Benefits of Commercial Solar Panels
Reduce Energy Bills
Photovoltaic (PV) solar panels are a proven technology. they reduce energy bills. But by how much?
With the average cost of one kWh of electricity from a third-party supplier costing between 20p to 35p and the average cost of generating the same amount of electricity from solar power being 5p, you could save up to 30p per kWh. With such savings, you will see a significant reduction in your energy bills quickly.
Energy Price Stability
In generating your own energy, you are reducing your reliance on the National Grid. This moves you away from the instability of energy prices, which third-party energy suppliers constantly shift.
Gaining energy independence gives you greater control over your energy and provides a more predictable energy price.
Reduced Carbon Emissions
While reducing carbon emissions doesn’t seem to have any financial benefits on the face of it, as a business, it could see you save money indirectly. This is because the use of renewable energy sources could mean your business complies with environmental regulations, therefore making you exempt from carbon taxes.
Income Generation
Solar panels have another financial benefit on top of savings as they provide businesses with a unique opportunity to generate an additional income stream.
The Smart Export Guarantee (SEG) schemes allow businesses to sell any excess energy produced to the National Grid. They can then use this extra income for other aspects of the business, working to further increase the profit margin.
Incentives and Tax Benefits
As we become more environmentally conscious, the government and local authorities are offering several incentives and tax benefits to businesses to encourage them to move to commercial solar panels.
Some government agencies or financial institutions offer Green Energy Loans. These are low-interest loans or grants for businesses that are looking at investing in renewable energy technologies such as Solar PV installations.
UK businesses that install solar photovoltaic systems or other energy-saving technologies are eligible for Enhanced Capital Allowances. Through this program, businesses can lower their corporation tax liability by deducting the cost of energy-efficient equipment as a capital allowance.
Companies that use renewable energy sources to produce a portion of their electricity may be eligible for a reduction in the Climate Change Levy, which would mean lower taxable electricity costs.
Long-term Benefits
There are also many longer-term financial benefits of commercial solar panels.
They have the potential to future-proof your business from fluctuating energy prices in the future, providing you with some stability among differing and rising energy costs.
Additionally, they can increase the value of your property as investors and potential buyers value renewable energy resources.
Finally, installing solar panels can enhance your brand’s reputation, giving you a competitive edge and making you stand out in your market. This is likely to attract customers, increasing profit.
Power Purchase Agreements
A final financial benefit of solar panels can come from Power Purchase Agreements (PPA).
This is where you lease your roof space or spare land to a solar company that installs the commercial solar system. You then purchase the energy generated by the system at a set, discounted rate.
These agreements allow you as a business to benefit from reduced energy prices, for a set period of time, without incurring the upfront installation costs of the system.
Experience the Financial Benefits of Commercial Solar Panels
As you can see, there are several financial benefits of commercial solar panels, most of which outweigh the initial installation cost.
From reducing energy bills to generating income, future-proofing your business, and taking advantage of tax benefits and incentives, commercial solar panels not only save the environment but also help your bottom line.
The team at Excel Energy are experts in commercial solar panels, having worked across a range of industries, including hospitals, manufacturing, farming and warehouses and factories. They are up-to-date with current grants and incentives available and can explain cost savings in further detail.
Whether you are looking for more information and a better understanding of the benefits of commercial solar panels or would like to discuss installing a system in your business, get in touch with our friendly team today.
Call us on 020 3834 9440 or complete our online enquiry form to request a call-back.
