Commercial Solar Calculator, Payback, ROI, and Savings

Businesses are increasingly realizing the monetary benefits of installing commercial solar panels. With a payback in the mid-single digits and a typical internal rate of return (IRR) exceeding 10%, most companies find that solar makes sense purely as a financial investment. There are other intangible benefits that can further improve the economics, such as employee recruiting and retention, customer attraction and loyalty, reputation in the community, and competitive differentiation.

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PAYBACK

Depending on the location, most commercial solar projects in Texas have a payback period between four and eight years – and they also offer a faster return than residential solar systems.

Commercial solar projects in Texas often have an internal rate of return (IRR) between 10% and 15%, which is higher than the minimum acceptable rate of return for many companies.

With solar, your return comes from reducing your electricity bills by generating your own for free. Thanks to a recent significant drop in installation costs and the generation of a passive income, the ROI of a solar panel system is higher now that ever before.

Savings

Cities, states, and utility providers all over the country are eager to help people go solar, which is why they offer plenty of financial incentives to make the process more affordable. Here’s a quick rundown of the types of incentives available to your business:

• Modified Accelerated Cost-recovery System

Also known as the MACRS, this method of depreciation covers certain business investments across a specified period of time through annual deductions. A tax-paying business that claims the commercial ITC credit can also take advantage of MACRS to drop the overall cost of a solar panel setup.

• Federal Rebate

In 2021, the government-issued solar investment tax credit (ITC) allows businesses to deduct 22% of the cost of an installation from their annual taxes. This amount will drop to 10% in 2022.

• State and Municipal incentives

Many state and local governments offer their own programs to promote commercial solar installation. These may include flat rebates, sales tax deductions, and tax incentives.

• Utility Rebates

Utility providers all over Texas and Colorado offer incentives for businesses that go solar. These include Guadalupe Valley Electric Cooperative, Garland Power and Light, and the City of Sunset Valley in Texas; EnergySmart Colorado and Holy Cross Energy in Colorado; and many more.

• Net metering

This solar incentive allows users to send their excess https://clickcashadvance.com/loans/loans-by-phone energy to the grid in exchange for credits on their monthly utility bill. During times when the solar panels are underproducing, you can use those net metering credits to offset the costs of energy used from the grid. Texas has net metering in place all over the state through local utility companies, as does Colorado – with Xcel Energy offering the top program in the Centennial State.