Business Case

Switch to Solar designs and installs on-site solar power systems for commercial enterprises.

Why Solar Is Good for Business

Solar power is uniquely suited for business owners and commercial users because:

  • Solar systems offer tax advantages, such as a federal income tax credit and accelerated depreciation, to your business.
  • Solar’s electrical output works well with the daily patterns of energy use in commercial buildings, reducing what you pay to the utility.
  • Solar panel applications are evolving quickly and can now be installed directly into roofs, envelopes, and surrounding spaces.
  • Many case studies have shown that businesses that invest in solar energy differentiate themselves from their competition, leading to increased sales and improved relationships with customers and employees.

What Advantages Does Solar Offer?

Solar power offers your business these key benefits:

Reduced Energy Costs & Dependence on Utilities

Solar power can stabilize corporate electricity costs. Two Staples distribution centers in California, for example, host solar power systems on their rooftops. These systems reduce the amount of power Staples buys from its retail electricity provider during the peak (and most expensive) hours of the day.

Typically commercial facilities are charged for both capacity, i.e., the maximum capacity required to meet its load during the course of a month, and for the total energy consumed. Because solar panels typically generate their maximum potential output during peak periods of the day, solar energy offers your business the opportunity to significantly reduce energy costs by reducing capacity charges as well as energy charges.

Solar electricity also fixes some or all of your business’s energy costs. Fixed prices from solar power provide a hedge against retail electricity price increases. The wholesale prices of the key fossil fuels that generate power (e.g., natural gas) fluctuate frequently, and these fluctuations are passed on to customers. Solar power helps smooth out these fluctuations.

Solar power can be configured to provide emergency back-up power when the grid goes down. This reduces your business’s dependence on an electrical grid system that is becoming more and more fragile as it ages and climate change precipitates more frequent catastrophic storms.

Improved Brand Image for Your Business Through the Use of Solar Power

Some companies try to differentiate their brands by being seen as environmentally responsible corporate citizens. Using green power from solar energy can enhance your corporate image by demonstrating leadership in environmental performance.

This is one of the reasons that firms such as FedEx, Kinkos and Staples use solar energy in many of their stores. Likewise, Whole Foods Market purchases solar renewable energy credits (SRECs) to appeal to one of its main customer segments: environmentally conscious consumers.

About one in three adults claims to be environmentally conscious, and about one in eight claims to be green, so corporations can use green practices like solar energy systems to build a positive public image that will increase business.

Product Differentiation through Solar Power

Other business leverage their use of on-site solar energy to differentiate individual products. For example:

  • White Wave, the maker of Silk Soymilk, highlights on its cartons the fact that all the electricity used to manufacture the soy milk is matched by wind-generated renewable energy credits (RECs).
  • Interface Fabrics Group uses its purchase of RECs to differentiate its Terratex brand of commercial interior fabrics from those of its competitors. This strategy appears to be working, as the sales of Terratex fabrics have nearly doubled since it launched the RECs branding initiative.

Community Involvement through Solar Power

On-site solar power systems can establish a company as a responsible neighbor in local communities.

For example, Johnson & Johnson installed a 500 kW solar power array in 2003 on the roof of one of its facilities in Titusville, New Jersey. The solar panels reduce local air pollution by decreasing the amount of fossil fuel-generated electricity that the facility buys from the local utility. The system also gives Johnson & Johnson an opportunity to provide on-site educational tours to local schoolchildren and science classes, further strengthening the company’s relationship with the community.

Deploying solar also may enhance a corporation’s relations with its employees. A recent KPMG survey of 1,600 of the world’s largest companies in 16 industrialized countries found that approximately half believed that employee motivation was a major driver of corporate social responsibility (CSR) activities. Others have observed that many employees want to work for firms that have a mission beyond increasing shareholder value.

Reduced Unregulated Emissions through Solar Power

Many leading firms in the United States, including Alcoa, 3M, and Lockheed Martin, operating under the assumption that mandatory controls on greenhouse gases might eventually emerge in the U.S., have established voluntary greenhouse gas emissions reduction targets and are turning to solar power to meet these goals.

This strategy reduces a company’s exposure to the operational and financial risks associated with possible future regulations of greenhouse gas emissions. In addition, setting voluntary targets identifies firms as being green or as proactively addressing the global challenge of climate change.

Reduced Operating Costs

Combining commercial solar power systems with energy efficiency improvements can lead to a dramatic drop in operating costs.

Rich Lechner, Vice President of Environment and Energy at IBM, says that developing more rigorous environmental policies can allow companies to discover wasteful and often costly routines that were buried under years of business.

Eliminating these routines can help a corporation cut costs and become more environmentally friendly. IBM’s projections show that every dollar it retains through energy savings results in an additional six to eight dollars in operational savings.

Commercial solar power can also reduce operating losses caused by power outages. On-site solar energy systems serving as backup or standby generators can reduce operating costs during blackouts or grid failures by eliminating or reducing down time.

 

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