What is the Commercial Building Integration Program?
This program works to identify and develop strategies and technologies to dramatically reduce commercial building energy consumption. Think of this as an energy audit or energy assessment. CBI’s focus on highly innovative, cost-effective, energy-saving measures; ones that produce significant energy savings and improve building performance, but are underutilized by the market. The potential to reduce energy consumption in existing and new commercial buildings is enormous. On average, 30% of the energy used in a commercial buildings is wasted, according to the U.S. Environmental Protection Agency (*1).
What are Carbon Credit Offsets?
Carbon credits are measurable, verifiable emission reductions from renewable energy projects, reforestation activities, or direct capture of CO2 for permanent sequestration. An example would be, carbon credits issued to offset the greenhouse gas emissions of a large asphalt factory that produces roofing shingles.
Farmers accomplish this every year from the crops they plant. They receive payments from the government, to remain in farming, for the relative amount of carbon captured by their plants and removed from the atmosphere. Our sister company, Carbon Credit Reserve is a non-profit that trades and sells carbon credits to individuals and companies, here and abroad, in order to offset their carbon footprint as outlined by the Paris Accord.
On the other side of our organization is Solano Gas Processing. As you might guess, Solano captures CO2 from natural gas streams and from various plants to be injected in deep abandoned oil and gas wells.
How long does it take for Solar Panels to pay for themselves?
The payoff, also referred to as return of investment (ROI), simply depends on the cost you pay for the solar array. There is a wide number of solar panel manufacturers around the world, but "Quality vs Price" is at center stage, as is capacity, lifespan and the actual warranty. Obviously, solar panels need as many sunny days as possible to be effective. There is no shortage of sunlight in Gulf States as we get approx. 228 sun-days, or 1,254 solar hours annually. However, no two roofs are the same, and size does matter.
Generally, the design of a solar system is based on annual kilowatt hours (kWh) of electrical consumption. By correctly matching cost with size, the money you were paying towards your electric bill, will now go to debt service the installation costs. Based on our standard small solar pricing of $3.50 per watt for single story, roof-mounted on shingled roofs, our solar systems can reach return on investment (ROI) in as little as 8-9 years, and there are efficiencies of scale in solar.
All things being equal, an 11kW system will cost $38,500 to install; and create $11,550 in tax credits. The net payoff or ROI after tax incentives, would occur in about 6-7 years, based on the net cost of $26,950. Over the remaining useful life of 30 yrs, the solar array will continue generating savings.
As the cost of electricity increases over time, the cost recovery period decreases. Also, if a Battery Backup System is added, you will pay more for the system, but you will be able to run your home or business at night, thereby accelerating cost recovery. The goal of solar is to become energy independent, and only with a battery can a solar array power up every day during a power outage.
Is financing available for solar power?
There are dozens of traditional and non-equity based lenders that specialize in renewable energy project lending, with financing options available for almost every individual and business owner.
What can I, as a large private business owner, get from Solar?
Since commercial systems are generally larger, the cost per watt is less. ROI can be reached in 4-6 years, because commercial systems have other favorable tax benefits over residential. However, homeowners that have enough land, can depreciate their solar equipment if they can also qualify for an Agricultural exemption.
The cost of the solar system, and any roofing improvements or even full replacement to accept solar, qualifies for the 30% tax credit, even when using financing. The Modified Accelerated Cost Recovery System (MACRS) deduction is still available for business owners. The Jobs Act of 2017 allows for "Bonus Depreciation" of 60% in 2024 but this goes down to 40% in 2025, 20% in 2026 and phased out entirely in 2027.
The Department of Energy (DOE) has even certified specific high efficiency Rooftop Packaged HVAC units that qualify for the tax credits if bundled with solar or other renewable energy systems. Generally, the largest portion of commercial utility costs are the multipliers and demand charges because of out dated and even brand new 14 and 16 SEER air conditioners. We have designed several Solar+Battery+HVAC (SBH) for large commercial customers.
Now imagine what you get by installing a solar or a full SBH system: 1) increasing your cap rate by eliminating one of your most costly annual operating expenses; 2) generating a 30% tax credit against the total costs; 3) deprecating the assets in as little as seven years; 4) deducting the interest expense if financing is used; and 5) reaching carbon neutrality in 2025, not 2030.
Let Westco Solar and Power Generation design a solar-roofing or ground-mounted system for you that can truly pay for itself, while increasing your business's CAP Rate and street value.
*1 U.S. Department of Energy—Energy Information Administration. Annual Energy Outlook 2020. Table 5. Commercial Sector Key Indicators and Consumption. https://www.eia.gov/outlooks/aeo. Accessed April 22, 2020.