Why Your Company Should Include Solar In Their Budget
We know that self-storage companies’ Corporate budgets may include several different business expenses – such as maintenance costs, water bills, landscaping work and more. One of the most important costs though is definitely the monthly electricity bill.
According to the 2012 Commercial Building Consumption Survey (a new survey is currently being created), the average commercial property is using $1.44 per square foot per year on electricity. This means that for a building that is 16,400 square feet (the average size of a warehouse), the annual electricity expenses could be $23,616. Crazy! So is there a way for self-storage company owners to reduce their electricity costs and increase their marketability as well?
Renewable energy, especially solar energy systems, is the answer to this. There are different ways to install a commercial solar energy system, such as solar panels installed on the roof, mounted on the ground, or even as canopies over parking lots.
Let’s see how easy it can be to include solar energy in corporate budgets and how these can benefit self storage companies.
Decrease Operational Costs
Installing a solar energy system on your property can considerably decrease the electricity bill for a self storage business by making the most out of a policy framework called “net metering.” Net metering allows solar customers to return the excess solar energy they produce to the electric grid in exchange for credits that can decrease their bill. With net metering and the right solar energy system, businesses can therefore use this credit they have gathered during the hotter months to use for the winter, where there is usually less sunlight available. As a consequence, business owners can considerably reduce their electricity bills over their year.
Self storage companies are an excellent type of business that can benefit from having solar energy systems installed and taking advantage of net metering policies. For example Extra Storage, which is one of the biggest self storage companies in the United States, started using solar energy systems on their properties back in 2010. This has led to a 80 percent reduction in electricity costs for some of their locations.
Increase Market Value and Revenue
Having a solar system installed can definitely increase the market value of the properties and lead to additional revenue. Should the property owner decide to eventually sell, the property could have a higher property and resale value. This is because solar energy directly affects the property’s operational costs and can lead to a better net operating income (NOI) and a better business opportunity, and consequently a higher property value.
Not only the above, but also solar energy is often exempt from property tax assessments, which means this addition on your property won’t be hit by higher taxes. In fact, there are currently 36 states that offer property tax exemptions for solar energy.
Federal Tax Credits
Businesses that install solar energy systems on their properties also can take advantage of the Federal Solar Investment Tax Credit (ITC) and receive a reduction on their corporate taxes. That also applies for non-profit organizations, public entities, or businesses without tax liability: they too can benefit by installing a system through a power purchase agreement framework.
The ITC equals to 26 percent off project costs if construction begins before the end of 2020, reducing to 22 percent next year.
Not only can you take advantage of monetary reductions, but also recently several companies have committed to better corporate sustainability measures in response to the shareholder, customer, and employee pressures. This has made embracing green building standards a big necessity. As a consequence, companies are striving to differentiate themselves by increasing revenue, and retaining stakeholders by adding solar energy investment into their corporate budget.
Not to mention that solar energy helps the environment. A solar energy system can offset waste created by potentially carbon-intensive grid electricity. Additionally, installing solar can be monetized by collecting a solar renewable energy credit (SREC) for each megawatt-hour of electricity produced from your solar panels. As a matter of fact, these credits can often be worth a lot and can significantly reduce system costs.
How To Get Started
Overall, solar energy can be incredibly advantageous and bring many benefits for self storage businesses. Apart from cost cutting, it also supports corporate sustainability measures and can definitely be used as a differentiating factor when reaching out to potential customers. It’s important to keep in mind that the Federal ITC is set to decrease at the end of this year and further in the future, so it’s best not to wait any further if considering solar energy.
The Solar One USA team is willing and able to support your business every step of the way on your switch to sustainable, clean energy. Reach out below to speak with a member of our team.