Solar is Achievable!

Solar is achievable without breaking the bank!

Solar energy sounds like a reasonable response to climate change: it is ever-present,it is free, and it produces no harmful pollutants. Yet, the U.S Department ofEnergy estimates that only 1.6% of commercial buildings have solar generation. Abarrier to wider adoption has been cost.

We have all heard that solar panels require a sizeable initial cost and that the return on the investment takes a very long time. No matter how you feel about sustainability, sometimes these types of statements creep into the back of our minds and take hold, without getting fact checked. We tell ourselves that solar might make sense for LEED and net-zero projects, but not for the small commercial project down the road with a modest budget and no time to wait for a return on the investment. But what if that narrative is simply not true and solar is achievable?

Take a look at the office building PRAXIS3 is working on, 3 stories, 30,000 SF overall. The building has a flat roof, with rooftop mechanical units. PRAXIS3 discussed the project with one of the solar vendors we work with, and they gave the following analysis of what solar panels could yield.

The roof allows for approximately 130 solar panels or photovoltaics (PV’s), and the PV-generated power will cover between 40 and 70 percent of the monthly electricity building use, depending on the time of the year, as both the PV generation and the energy consumption fluctuate throughout the year.

For this particular building, the annual electricity bill savings are projected to be around $10,000. The chosen system includes 5-year full warranty coverage, differed operation and maintenance costs for the first five years, and extended warranties (20 years for inverters and 30 years for panels). Therefore, the operation and maintenance are minimized, providing another strong argument for solar.

But that is not all, there might be incentives for solar panels in your jurisdiction, and we are happy to provide help navigating through the incentives and rebates with our independent solar partners. Even if the local government does not have any promotions, there are other available rebates and incentives, for instance:

• State depreciation (recovering investments through depreciation deductions)
• Credits related to the Inflation Reduction Act (IRS) of 2022 – in the case of our office building, these credits accounted for 30% of the total PV system cost. It is valuable to know that these credits do not start phasing out until 2033!
• Federal Modified Accelerated Cost Recovery System (MARCS) Bonus appreciation - 40% of the cost can be depreciated in the first year, while the remaining 60% is depreciated under the normal MARCS schedule.

With all that in place, the initial investment in this example will be returned in as little as 4.9 years, and then it is just a matter of pocketing the money that the electrical bill decrease brings in, while paying a fraction of it for maintenance.

Of course, the goal can be moved to the next level (energy independence, generators, etc.) - but in the meantime, our office building project will remain a shining example of how achievable solar really is!