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Concentration of CO2 in the Atmosphere

The Business Case for Solar Power

The Upper Valley Aquatic Center’s 500 kW off-site, netmetered solar powers this local business. Courtesy Image.

The Upper Valley Aquatic Center’s 500 kW off-site, net-metered solar powers this local business. Courtesy Image.

By George Harvey

“We can help any business save money through solar,” Jim Merriam, the CEO of Norwich Solar Technologies asserted. Some business operators have the idea that solar power would not work for them, but Merriam responded to this notion by saying, “Anybody can do this, and anybody can save money. This remains true even if you don’t directly own or host the solar array.”

Norwich Solar Technologies, located in White River Junction, Vermont, has worked in the solar industry in Vermont and New Hampshire since 2011. As a company specializing in educational, municipal, and commercial facilities, it has done close analysis of the advantages it can bring its customers. One of the results of this work is a report, “The Top 4 Ways Solar Power Can Strengthen Your Business,” which is available for download at the company website (https://norwichsolar.com/solar-power-for-business-ebook/). Briefly stated, the top four ways are the following:

  • Reduced energy costs with long-term stability.

  • Reduced taxes with generous depreciation schedules (up to 100% bonus depreciation) and tax credits (30% of system cost), with an additional 7.2% tax credit for Vermont businesses.

  • Appreciation of an environmentally-sound effort from customers and community members.

  • Increased property value with potential for new revenue streams.

Colonial House Inn in Weston, VT provides skiers with a sustainable lodging option. The 30kW ground-mounted array was commissioned in October 2017.

Colonial House Inn in Weston, VT provides skiers with a sustainable lodging option. The 30-kW ground-mounted array was commissioned in October 2017.

Certainly, with climate change on the minds of many people, it is good to have customers, neighbors, and others in the community aware of the work a business is doing to reduce carbon emissions. Solar installations are an excellent way for any organization to say, “We care, and we are doing our part.” And while there are still a few people who object to the appearance of a large solar farm, the number of people who welcome solar systems is increasing as communities get involved and the public awareness of the climate disaster unfolds before us.

While appreciation of neighbors is nice, and climate change must be addressed by all of us, from a practical point of view, many business people feel compelled to justify any expense in systems that will address the problems. And this is a group Jim Merriam was particularly addressing with his statements. Stable energy prices have real value, especially because the costs of fossil fuels fluctuate so much. You can only take a business plan to a bank if you know what your expenses will be, and you can only know what your energy expenses will be if they provide better stability than fossil fuels do. Tax reductions are easily evaluated, because they have monetary values. Increased property values can be more difficult to assess with any precision, but they are clearly advantageous.

The list above presents only four benefits of going to solar power, but it is a good starting point for a discussion of the business advantages of installing a solar power system. Other advantages worth mentioning include availability of special financing, power purchase agreements, renewable tax credits and other incentives, virtual net metering, shared solar options, and even special utility programs.

No business operates in a vacuum, and what is good for a local economy is usually good for the businesses within it. For sustainable development goals to be met by our society, businesses must develop and achieve their own goals. Solar power is quite consistently good for the local economy, and it is an important tool for almost any business, both for the sake of the general economy and for its own welfare. For most business owners trying to do right by their community, watching a solar installation personalizes how their choice supports rebuilding the trades and providing careers to our younger employees.

DHMC HEATER ROAD ENTRANCEThe issue of jobs serves as an example. High-quality employees will migrate quickly out of an area if there are no good prospects for employment, and where jobs can easily be outsourced to some other part of the planet. We can be sure that solar installers will not be outsourced in that way. Both climate change and economic pressures produce a sense of urgency for installing solar systems, so the jobs are unlikely to disappear. At the same time, a robust local economy can give local businesses a better employee pool and support.

Not only do physical realities and economics suggest job security, but they also imply that money in the local economies is more likely to stay in local economies with passing time, and that increases overall prosperity, a benefit for nearly any business.

Laws can be problematical, of course. State and local laws seem to change almost continuously. We at Green Energy Times sometimes feel hard pressed to keep up to report them every other month. A good solar installer must do this continually and provide relevant data as part of any site evaluation. This includes everything from tax incentives to the availability of net metering. Most business people are not at all prepared to evaluate the potential for solar power on their businesses, which makes Jim Merriam’s assertion that he can help any business save money all the more important.

One thing we asked Merriam about was the potential effects of punitive tariffs on solar systems. He said that Norwich Technology was disappointed that the president had chosen to put a 30% tariff on imported solar panels. But he pointed to the benefits of solar power once more, stressing that they were still clear. “Because the benefits of solar are so overwhelmingly positive and obvious, we expect the tax to cause only a temporary setback in our pursuit of clean, local, inexpensive solar energy.”

Pirouette Farm in Norwich, VT installed a 60.3-kW roof-mount solar array in July 2016. This net-metered system offsets the farms energy loads and provides community solar in Norwich.

Pirouette Farm in Norwich, VT installed a 60.3-kW roof-mount solar array in July 2016. This net-metered system offsets the farms energy loads and provides community solar in Norwich.

We discussed the actual numbers associated with the tariff. Merriam pointed out that the solar panels represent a higher percentage of the overall cost of the system as their sizes increase. This means that the tariff will have its greatest effect on utility-scale systems, and its least effect on those installed at households and small businesses. In a small system, the panels might represent only 25% of the total cost. Increasing the cost of the panels by 30% might only increase the cost of such a system by 7.5% or less, and that impact is less important as electric rates increase. By contrast, utility-scale solar systems have about 40% of their costs in the solar panels. This would mean that their overall costs might increase by about 10-12%. Please notice the word “might.”

The costs of solar systems have been dropping so dramatically that for all systems, large and small, the cost increases from the tariffs are likely to have less effect than the falling costs. Last September, the National Renewable Energy Laboratory reported that in the previous year, the cost of installed utility-scale solar had fallen by 30%, an amount much greater than the projected 12% increase in cost from the tariffs. And commercial costs for solar power had fallen by 15%, a reduction that would still be greater than the increased costs.

The business case for solar power has been, and remains, very real.

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