As our world seeks a cleaner and more affordable approach to energy through solar power, one segment in particular is reaping huge financial benefits. Commercial has had a very positive impact across US business verticals. Big players like Apple, Google, Target, Disney, and a myriad of others have turned to commercial solar as a renewable energy source to lessen their carbon footprint and accomplish the important task of cutting overhead costs.
Big savings on operational expenses, however, are not limited to mega companies. Small businesses all throughout New Jersey and the United States are also in line to benefit from commercial solar solar services New Jersey.
In today’s economic climate, what business isn’t looking to increase their bottom line? A commercial solar strategy allows companies take advantage of great government incentivized programs like a new jersey solar rebate while helping the environment through responsible energy use. Everyone wins!
Here are 5 unmistakable financial benefits for businesses considering a commercial solar strategy, but first let’s look at some great stats that indicate solar power is here to stay.
2021 Commercial Solar Statistics
It isn’t hard to see the tremendous growth of solar over the last decade. The industry has grown exponentially. In fact, according to the 2021 SEIA U.S. Solar Insight Report, solar had another record year.
Here are a few of the points noted by the study.
• The US solar market showed a 19% increase in installations with a record 23.6 GW of solar capacity
• For the 3rd year in a row, solar has made up the largest share of new electricity-generating capacity at 46%
• In 2021, 3.9% of all electricity generated in the U.S. can be attributed to residential and
commercial solar energy
Installations topped 500,000 and commercial solar maintained and remained very strong despite widespread supply chain issues. All of these and more are signs that solar is set to continue its upward trajectory with some forecasts, such as the 10 year outlook compiled by Wood McKenzie, predicting the numbers to as much as triple by 2032.
These stats should impress both business owners and CFOs, especially those looking to work with a solar company in New Jersey.
The Top 5 Financial Benefits of a New Jersey Commercial Solar Strategy
For all the reasons mentioned previously, take it as a sign, commercial solar installation should be a strong consideration throughout the US, but New Jersey is among those leading the charge. No pun intended.
Now, let’s get to those 5 financial benefits for New Jersey commercial solar customers.
1. Commercial Solar Can Eliminate Up to 100% of Your Electric Supply Cost
It’s no secret that New Jersey has higher electricity rates than other states at about 14% higher than the national average. In the wake of rising energy costs, which don’t seem to be going anywhere soon, commercial solar can certainly be classified as an investment in your business’s future.
Inflation and global energy concerns are impacting company’s bottom lines across the board and there are very few places that a business owner can cut corners without negatively impacting their process and bring in a positive output. Commercial solar offers a way to increase your business’s bottom line with added positive impact to the world around us.
Also, note that as technology progresses so does demand for higher energy
consumption. Naturally, any business that wants to stay at the forefront of their industry is going to upgrade equipment as time goes by, adding to the inevitability of rising costs.
Net metering is another fantastic piece of commercial incentive program New Jersey offers to help you save on your solar project. This program allows you to earn credit on your electricity bill if your system generates excess electricity.
Each time you generate more power than you consume, your utility meter rotates backward, earning you credits for the energy. You can use these credits in your commercial later in the billing cycle.
At Opal Energy, we take great pride in staying on the cutting edge of commercial solar technology while matching our customers needs with the right equipment installation. This includes planning to scale for the future. Our primary goal is to save you as much money as possible in the years ahead with the universal benefit of reducing your carbon footprint.
2. New Jersey Offers a Cash Incentive Program for Additional Revenue for the Next 15 Years
As a New Jersey commercial solar company, we are proud to share that our State has some great incentives in place. One example is an elaborate 15-year cash incentive program for any business that switches to solar energy. With this program, companies considering solar have a great opportunity to create a new source of revenue.
Solar is a revenue producing asset in the State of New Jersey. Through the NJ Clean Energy Program, any commercial business that goes solar will receive a cash payment for the next 15 years. This payment is based on the solar system size and production, and our average customer sees $20,000 per year in cash incentives from the state just by going solar. that’s over $300,000 in cash incentives.
If you don’t live in New Jersey, don’t worry! Many states offer support and incentive programs like a New Jersey solar rebate. No matter where you live, there’s no better time to take charge of your business’s sustainability and earn monies back. If you are considering commercial solar but do not live any States mentioned, feel free to contact us anytime. Opal Energy Group operates nationwide and we can guide you on the many great programs out there.
Here at Opal Energy, we guarantee seamless installation by experienced, insured, and licensed commercial solar professionals. We always use the highest quality inverters, solar panels, and other components to maximize your net metering. We are confident in our work, so we’ll offer installation, manufacturer, and third-party warranties.
3. Commercial Solar Offers a 30% Tax Credit That You Can Utilize in Year One
The federal investment tax credit (ITC) is an excellent federal commercial incentive program New Jersey customers can take advantage of to lower commercial solar installation costs.
The ITC allows commercial businesses to earn a 30% tax credit for solar installation. For instance, if your solar system costs $250,000, you can take a $75,000 direct tax credit in the first year.
You won’t pay anything in federal taxes if you owe $75,000 for the 2022 tax year.
The new Inflation Reduction Act allows some qualifying entities to take direct pay for the tax credit. It allows businesses that may not be able to utilize a tax credit to sell their tax credit to a third party for cash.
4. You Can Depreciate the Solar Cost and Can Take 100% Bonus Depreciation in Year One as Well
The Modified Accelerated Cost-Recovery System (MACRS) is another benefit of commercial solar installation for New Jersey commercial solar customers. It can dramatically reduce your system installation costs.
The federal tax code allows commercial renewable energy systems to qualify for a 5-year MACRS depreciation schedule. This means you can depreciate your solar equipment like any other equipment. You also have the ability to take 100% bonus depreciation in the year 2022. Bonus depreciation is set to fall to 80% in 2023, 60% in 2024, and so forth.
Generally, with the bonus depreciation alone, you can reduce your solar energy project costs by about 25%. Your actual savings in this program varies based on your business tax rate.
5. Reducing Your Utility Cost Raises Your Net Operating Income, Which in Turn Creates a Higher Valuation of Your Property and Business
Perhaps the most outstanding benefit of switching to solar energy is increasing your net operating income (NOI).
Net operating income is an essential aspect of property valuation. Commercial properties are valued by dividing the NOI of a property by the market cap rate for the location. There are two ways to raise the NOI. You can either minimize expenses or generate more income, such as by increasing the rent or top line revenue.
A switch to commercial solar achieves both simultaneously. If you minimize electricity costs by $100,000 annually, this amount goes to your net operating income.
Let’s use a practical example with a 6% market cap rate. This is the current cap rate in many areas of New Jersey.
If you divide $100,000 by 6% (0.06), the result is $1.66 million. By simply installing a solar system that offsets $100,000 in electric cost. In 90% of cases, the value you build is significantly higher than the costs you’ll incur installing solar.
These benefits are not only for the owner occupied properties. Many of our customers are landlords who lease their commercial space to tenants. Commercial solar, within or outside the State of New Jersey, is a value-add component. Not only are then commercial spaces more attractive to potential tenants, the landlord is able to increase their NOI by charging the tenant for electric us, in turn increasing revenue and profits.
Don’t Miss Out! Find the right New Jersey Commercial solar Installation company.
Switching to commercial solar is helping both the sole proprietorship and the big corporation save valuable dollars. Don’t be left in the dark when you could be increasing profitability. Renewable energy is a worthwhile investment that will continually benefit your bottom line for years to come while essentially doing your part for the betterment of the environment
that we all share.
At Opal Energy, we are leading the way to a more cost effective and efficient future as the provider for commercial solar New Jersey trusts! Financing options are available with friendly payment plans for five, six, ten, fifteen, and twenty years.
Get in touch with us today, and unlock the potential of commercial solar for your business!