10 really awesome benefits of Solar Power for your business/Lavancha
We love this headline and story. In terms of benefits this is just the tip of the iceberg. And not to forget the avalanche of improvements that come from efficiency investments. Solar, as you will see, offers tremendous versatility. It can truly be structured to meet anyone's energy needs.
Grid electricity costs have increased overtime and we still see many Industrial and commercial users paying significantly for power from grid which are above market rates. Also due to interrupted grid power supply businesses have to resort to other power backups like diesel generators which can significantly add to their costs.
Installing Commercial Solar PV instead of using The Grid power can benefit a business immensely. These benefits includes reduced operational costs, tax benefits, gives the business significant competitive advantage and others.Having solar installed enables consumers to fix the power cost for the next 25 years.
Listed below is a comprehensive coverage of all the benefits of installing Solar PV for commercial and industrial establishments.
Avoid Rising energy Costs
In today’s age of highly volatile energy prices investing in Solar and other green energies act as a hedge against the rising prices.
It helps business insulate themselves from the variable power rates by producing energy of their own. This brings more stability to the business by taking the variability factor of the power costs out of the equation which can affect the business financials.
Incentives and Rebates
State and Central Governments are offering incentives and rebates as much as 50% to help consumers invest more in Solar to build a greener India.
Incentives offered are:
Depreciation refers to the decrease in value of assets over time. In case of solar panels depreciation occurs due to inefficiencies and wear and tear of the solar panels over time.
Under Accelerated depreciation the reduction of value of the solar plant occurs quickly in in the initial few years and hence companies can enjoy the benefit of reduced taxable income and deliver higher cash profits in the 1st 2-3 years.
10 year tax holiday – This helps improve the company’s financials by GOI’s incentive to provide reduction or elimination in the payment of taxes by companies.
You can refer more on the incentives and rebates offered by the GOI in the link below :
Although the initial investment for setting up the solar rooftop may be high, the savings realized over the long term can offset the costs involved.
It also helps in realizing fixed cost or zero cost towards power consumption over a period of 25 years.
Also it gives the business a significant competitive advantage with rising utility rates.
Net Metering Option
Companies can avail the Net Metering option by feeding the excess solar generated by the Solar equipment to the grid and the companies are compensated for the same by the DISCOM’s.(Distribution companies).
Many of the owners fear to install the Solar PV systems because of the initial cost, they can opt in for the Lease option where the solar provider procures, installs and maintains the solar equipment at its expense and the building owner needs to pay a fixed amount for for the electricity generated and used at a fixed contract apart from the minimal upfront cost.
The lease payments work out to be much cheaper than the DISCOM grid rates and offer significant savings over a longer duration.Companies can lease solar panels for between 15-20 years.
For a more detailed coverage on the different financial incentives offered by the government please refer this whitepaper from the MNRE.
The Solar PV equipments require very less maintenance and can provide a very long life of 20- 25 free of maintenance. This is made possible by the way the equipment is encased in tempered glass case to protected from wind, rain and other weather elements. And the cells inside the panel doesn’t get damaged easily for a long time which adds to the life of the solar panel.
Reduce Operating expenses
Investing in a Solar rooftop can significantly reduce your operating expenses and can have a significant effect on the balance sheet. Whether you go for a upfront lump sum payment or lease out solar, the savings generated by using solar can have a huge effect on the company’s financials.
With the rising energy prices, investment in Solar and other greener technologies can give business significant competitive advantage against other business that depend on traditional energy sources. Investment in Solar can also significantly affect the financials of the company.
Build Brand equity
With more and more consumers becoming more ecologically conscious it pays for the companies to move towards using greener technologies to attract a loyal community interested in green technologies.
The building owners and developers can gain a lot of media attention by marketing their building as green building thereby increasing the brand value.
Increase Investment opportunities
If the building owner wants to sell the property to investor, this gives a great opportunity as a building having solar equipment installed attracts high value because of high focus on the creation of green sustainable buildings.
Like what you read? For more information on how Solar can be beneficial for your business or for a free consultation with our experts, please contact us and we would be happy to help