Why now the right time to invest in solar panels for your business
With costs increasing, more and more commercial clients are looking to run leaner. With solar, you can too – and now is the perfect time to install
With rising electricity costs and a significant decrease in the cost of solar systems, solar power has become an incredibly cost-effective energy alternative for businesses.
The larger corporations are definitely leading the charge, but many small and medium-sized companies are now actively investigating exactly how solar energy can have more of an impact on their bottom line. Here, we show you how save money with solar energy for your business.
Why now is the best time to install solar for your business
Solar panels have never been cheaper or so effective – but the cost will rise
We’re seeing it more and more – companies are running leaner to keep up with the rising costs of business. They’re introducing efficiencies and processes, reducing headcount, and even cutting back on some of the essentials of running a business (we’re not talking coffee which is a definite essential, but we are talking things like marketing initiatives).
But many don’t see their ‘fixed’ costs as being something they can actually influence. And electricity is one of those fixed costs. You can run financially leaner by reducing the cost of your power bills with solar panels.
For a business, now is the right time. 2018. The price has come down exponentially over the last 5+ years. From our perspective, ten years ago we used to purchase a 150-watt panel for approximately 80% more than we currently spend for a 360-watt panel. Yes, you read that right! We pay 80% less today for a far superior product.
In addition, the panels are the same size but offer increased efficiency. So think about it – they cost about a third of what they did, yet their efficiency has more than doubled. Why?
Ongoing industry investment has seen incredible development in manufacturing processes. Research and development has seen organic matter cost less per watt to produce while also offering increased solar efficiency. And evolving innovations that look for further solar technology opportunities are spiking commercial interest.
But it will plateau. And we believe it will be soon.
We’ve come an incredibly long way in ten years. But the reality is, we’re working with specialist products that are significant in size. Regardless, there’ll still be shipping charges, docking costs, wholesaler tariffs, and the cost to get them to our door. And like everything else, these costs will continue to increase over time. So while the price point for solar panels has plateaued for a few years, now is undeniably the time to buy.
Government incentives are decreasing
With the Australian Government’s commitment to green energy, we’ve seen an investment in Small Technology Certificates, commonly known as STCs, which are essentially the Government rebate.
But the number of STCs you’ll receive each year drops.
Not only that, but the STC price rises and falls depending on market demand. When it falls, the price of your system increases significantly. It’s currently quite high, saving you money on installation, but it won’t stay like this forever! For business, this presents a significant saving opportunity. Jump on it.
You can currently claim a rebate when investing in solar for your business
We’re no tax accountants, but you do get tax incentives for installing solar panels in your business.
If you own your premises, you can claim your solar panels as capital improvement.
If you lease your premises, you can claim your solar panels as a leasehold improvement.
The investment is depreciated over time. However if you’re a small business, you can also look at the $20k instant tax asset write-off. Provided you use electricity as part of producing your income, you can claim the entire deduction straight away.
Case Study: Commercial business invests in reducing $20k/week electricity costs
We recently provided a ballpark quote for a commercial client. This client currently pays a whopping $20,000 a week for their electricity.
After calculating the numbers, we identified that they required 1,000 panels on a single site. They’re currently investigating the options from an investment perspective as they lease the premises but, regardless, their system will pay itself back well before the lease ends.
But if they don’t do it this year, they’re mad. On a system of this size, the rebate will have a significant impact – thousands of dollars every week and reducing their power requirements from the grid by 50%. And of course, the longer they wait the more the system will cost. So really, every day it’s not on the roof is costing them money.
Historically speaking, there’s never been a better time to install solar panels for your business
From a commercial perspective, the time to install solar panels in your business has never been better.
When you combine the decreased cost of panel prices (alongside the increased efficiency they’re providing), as well as the increasing cost of living, construction industry increases and decreasing rebates – why wouldn’t you do it now?
There’s no point putting it off for a year or two because, just like our client, every day they aren’t on the roof is costing you money.
Over to you
What do you think? Is now the right time for commercial businesses to install solar? Let us know! We’d love to hear your thoughts and answer your questions.