Top 3 Reasons Why Now Is the Best Time to Invest in Commercial Solar Installment
Businesses today face ever-increasing overhead costs, especially with electricity. Therefore, it is essential to find ways to save. If you’re thinking about investing in commercial solar installment to help your organization save on energy costs, now is the perfect time. Solar has not only proven to be a resilient clean energy source through the economic crisis this past year, but the tax credit extension and dropping prices due to new solar installment technologies means that now’s the time to invest and reap the rewards in the future.
Let’s take a look.
3 Reasons to Invest in Solar Installment Today
1. Renewable Energy Sees Major Growth Despite Economic Slowdown
Despite the economic slowdown induced by COVID-19, the solar energy market has seen accelerated growth, while other fuels struggled. In fact, investments in solar installments rose by 12% year-on-year.
According to new projections by BloombergNEF, as much as 194GW of solar PV could be installed globally this year (more than 13% higher than the research firm’s original estimate). And the National Renewable Energy Laboratory says that the industry will add 10 gigawatts (GW) of new solar capacity annually through 2022. Even in the face of growing uncertainties through the pandemic, businesses continue to show robust commitments to invest in renewables as costs decline.
As more businesses commit to net-zero targets and green stimulus programs are emerging, we expect to experience even more investments in solar installment over the coming years.
2. Extension of the Solar Investment Tax Credit
The Solar Investment Tax Credit (ITC) also known as the federal solar tax credit, is one of the most important federal policy mechanisms to support the growth of solar energy in the United States. The ITC allows businesses to deduct 26 percent of the cost of solar installment from their federal taxes.
It was originally set to expire at the end of 2007, but thanks to its success in supporting a renewable energy economy, Congress has extended the expiration date multiple times. Most recently in December 2020 for an additional two years. Prior to the bill’s passage, what’s known as the ITC had been poised to drop to 22 percent this year. Now, the extension of the solar investment tax credit gives a 26% tax credit for both solar and solar plus storage installations for 2021 and 2022.
It is currently scheduled to drop to 22 percent at the end of 2023. And, in 2024, the tax credit will drop to 10 percent for large-scale projects.
3. New Tech Drives Solar Costs Even Lower
The cost of solar installments is dropping across the nation as improvements in solar power improve efficiencies. A recent report states that solar is now the cheapest form of new electricity in a host of international markets (including Spain, Italy, India and 16 US states). In fact, the cost of solar has fallen by close to 90% over the last decade and is forecast to fall by a further 15% – 25% by 2030.
What caused the drop in costs? Big leaps in solar technological advancement.
Driven by new tech and advancements in automations, the forecast of cost reductions could secure solar’s dominance in clean energy production and make it much more accessible for businesses. The technologies, such as bifacial panels, large-area cells and modules and trackers, will also help reduce operating costs for new sites and allow more opportunities for continued cost reduction.
The rise of variable renewable sources means that there is an increasing need for electricity grid flexibility. According to the International Energy Agency’s World Energy Outlook 2020, “Robust electricity networks, dispatchable power plants, storage technologies and demand response measures all play vital roles in meeting this.”
Investing in Solar – How KMB Can Help
It’s clear that the future is in solar.
Solar energy has been on track for significant growth, even in the face of economic slowdowns brought on by the coronavirus pandemic. As the price of solar continues to fall, the solar industry could expand even faster than the previous projections suggest.
Commercial electricity costs are only expected to rise which is why it’s more important for businesses to invest in commercial solar energy. Simply by combining an energy storage system with a solar installation, a business can increase their energy savings by about 20-50 percent.
The bigger goal? Move toward complete energy independence.
But, it’s not just the benefits of reduced electricity costs that solar energy provides. Going solar can also provide recognition for a business as an industry leader and “green” business partner.
From New York to San Francisco and everywhere in between, the KMB solar engineers have the experience to tackle any sized project. Not sure if investing in solar installment is right for your organization? Contact us at 855-755-6234 to learn more about your options and tax credits.