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What Is the Future of Solar Energy in Business?

Posted by AllEarth Renewables on June 10, 2015 in Future of Solar, Dealers

Soiland_Quarry-1Residential and commercial solar installations have risen dramatically over the past decade, and the 20x growth in the industry has been driven by a number of factors. The awareness of solar and the interest in alternatives to traditional energy have increased significantly. People and businesses no longer look at solar as something esoteric or "alternative." Building on this increased awareness is a dramatic reduction in the cost of solar modules. This has reduced the overall cost of a solar installation and has broadened the number of homeowners and businesses that can realistically consider adding solar.

Put simply, as interest in solar rises around the country, we can expect its share in the energy market to follow. Once you've decided to expand your business to include solar-energy solutions, it's imperative to be able to quantify their many benefits—especially those that are timely—and communicate this to your potential solar customers. Below we've assembled some helpful facts and resources to share with a business considering solar.

Solar power is currently the fastest-growing source of renewable energy in the U.S. says Rhone Resch, the president and CEO of the Solar Energy Industries Association. With solar "generating enough clean, reliable and affordable electricity to power more than 2.2 million homes ... we’re just beginning to scratch the surface of our industry’s enormous potential." 

Many states are beginning to embrace solar, while others already have a thriving industry as a jumping point for businesses. California, for example, is first in the state rankings of the National Renewable Energy Laboratory's Open PV Project for the number of photovoltaic systems installed at 134,759. And the great news for businesses is that there are 18 more states (including the District of Columbia) with more than 1,000 PV installations. 

In short, demand is high. According to GTM Research, the third quarter of 2014 was record-shattering for the industry, with 1,354 megawatts of PV installed. This was seconded in the U.S. Solar Market Insight Report, a collaboration between GTM and the SEIA. Per the report, "Growth remains driven primarily by the utility solar PV market, which installed 825 megawatts in Q3 2014, up from 540 megawatts in Q3 2013."

For residential and commercial customers, the growth is found both in retrofitting solar into existing homes and businesses and in incorporating solar into new construction.  The benefits are driven by both economic and environmental considerations.  Solar systems allow customers to significantly reduce their out-pocket monthly energy bills.  Depending on the size and scope of the project, customers can cover their entire energy costs.  For those looking at the environmental side of the equation, they can work to be "energy neutral," producing as much energy as they consume. 

The Future of Solar Energy as a Business Investment

Further, the customers installing PV systems aren't just residential clients or small businesses. The SEIA lists hugely successful Fortune 100 companies such as Wal-Mart Stores Inc., Target Corp., and Costco Wholesale Corp. among those that have embraced the benefits of solar energy. Also in this group are trendsetters such as Apple Inc. and IKEA.

In order to demonstrate how a business can benefit significantly from solar energy, let's take a look at a case study:

The Quarry

As one of the North Bay's largest construction and landscape-materials supplier, Soiland Co. Inc. saw its electricity bills double overnight due to a rate redesign. To keep prices reasonable and to stay financially stable, its staff looked for effective and efficient energy solutions. By choosing dual-axis AllEarth Solar Trackers, the company was able to dramatically lower its power bill in its first month. After the first year, the 33 solar trackers installed at Soiland generated more than 439,000 kWh of solar energy and exceeded their targeted benefits in the most important area: financial returns.

The Cost of Solar is Going Down

Businesses are attracted to solar because they can save money on energy while reducing emissions. However, there are other significant factors at play that are encouraging both businesses and individuals to turn to solar.

First is that solar prices have come down quite a bit in recent years. In fact, a recent report from the U.S. Department of Energy states that prices for distributed solar PV systems dropped between 12–19 percent throughout the country.

Second is that solar systems are becoming more and more efficient.  As panels, inverters, and electronics continue to evolve and become more efficient, the amount of power generated from a similarly sized system has grown significantly. 

The combined effect of lower costs and greater efficiency is that the economic argument for installing solar becomes much stronger.  As the time for a return on investment becomes shorter, it becomes easier for both residential and commercial customers to be convinced that solar is the right choice

Public Policy is Helping Grow Solar

Another major factor boosting interest in solar is the worthwhile federal- and state-level incentives. At the Federal Level there is a 30% tax credit offered for solar installations.  And depending on location, there are state and local tax incentives for installing a solar system.

In some regions, the local utility is encouraging solar growth by offering "Net Metering."  With net metering, the power generated by the solar system is pushed back onto the grid, and the customer is credited for the power at a rate that is sometimes higher than the rate they pay for energy. 

To sum, there is a huge amount of documented benefits and data to support solar-energy solutions. Share these resources with potential customers so they can understand not only whether they should consider solar for their businesses, but also why they should do so right now.

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