Grid electricity costs have increased over time. The real price of electricity has risen by 63%, while for gas it has gone up a staggering 115%.
In spite of the rising electricity costs, we still see Industrial and commercial users paying significantly more for power from the grid which are above market rates.The operating power costs are further increased with the use of power backups like diesel generators in case of power failures.
Businesses need a sustainable alternative to reduce their power costs over the long term.
Investing in Solar and other green energies act as a hedge against the rising prices. Having a Solar PV plant installed enables consumers to fix the power cost for the next 25 years.
It helps business insulate themselves from the variable grid power rates by producing energy of their own. This brings more stability to the business by taking out of the equation, the variable power cost factor.
Listed below is a comprehensive coverage of all the benefits of installing Solar PV for commercial and industrial establishments.
Incentives and Rebates
State and Central Governments are offering incentives and rebates as much as 50% to help consumers invest more in Solar to build a greener India.
Incentives offered are:
Depreciation refers to the decrease in value of assets over time. In the case of solar panels, depreciation occurs due to inefficiencies and wear and tear of the solar panels over time.
Under Accelerated depreciation, the reduction of the value of the solar plant occurs quickly in the initial few years and hence companies can enjoy the benefit of reduced taxable income and deliver higher cash profits in the 1st 2-3 years.
10 year tax holiday
This helps improve the company’s financials by GOI’s incentive to provide a reduction or elimination in the payment of taxes by companies.
You can refer more on the incentives and rebates offered by the GOI in the link below:
Higher ROI and greater savings
Although the initial investment for setting up the solar rooftop may be high, the savings realized over the long term can offset the costs involved.
It helps in realizing fixed cost or zero cost towards power consumption over a period of 25 years.
It also gives the business a significant competitive advantage with rising utility rates.
Net Metering Option
Companies can avail the Net Metering option by feeding the excess solar generated by the Solar equipment to the grid and being compensated for the same by the DISCOM’s.(Distribution companies).
Many of the owners who fear to install the Solar PV systems because of the initial cost, they can opt in for the Lease option.
Here the solar provider procures, installs and maintains the solar equipment at their expense.
The building owner just needs to pay a fixed amount for the electricity generated and used, at a fixed contract apart from the minimal upfront cost.
The lease payments work out to be much cheaper than the DISCOM grid rates and offer significant savings over a longer duration. Companies can lease solar panels for 15-20 years.
For a more detailed coverage on the different financial incentives offered by the government please refer:
The Solar PV equipments require very less maintenance and can provide a very long life of 20- 25 years, free of maintenance. This is made possible by the way the equipment is encased in a tempered glass case to protect from wind, rain and other weather elements. And the cells inside the panel don’t get easily damaged for a long time, which adds to the life of the solar panel.
Reduced Operating Expenses
Investing in a Solar rooftop can significantly reduce your operating expenses and can have a significant effect on the Balance sheet. Whether you go for an upfront lump sum payment or lease out solar, the savings generated by using solar can have a huge effect on the company’s financials.
With the rising energy prices, investment in Solar and other greener technologies can give the business significant competitive advantage against other business that depend on traditional energy sources. Investment in Solar can also significantly affect the financials of the company.
Build Brand Equity
With more and more consumers becoming more ecologically conscious it pays for the companies to move towards using greener technologies to attract a loyal community interested in green technologies.
The building owners and developers can gain a lot of media attention by marketing their building as green building thereby increasing the brand value.
Increase Investment opportunities
If you want to sell the property to an investor, a green sustainable building gives a significant advantage. A building having solar equipment installed attracts high value because of the high focus on the creation of green sustainable buildings.
In this post, we have listed the innumerable benefits a business can have by installing a renewable energy source like the Solar PV equipment for its power requirements. See a significant difference in your company financials with a significant competitive advantage by leveraging renewable technologies.
If you would you like to have a Solar PV equipment installed for your building, feel free to call us or email us for a free consultation with our experts.