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Six Benefits of Commercial Solar in California

Industrial solar power systems are growing in popularity, and it's not surprising to see businesses across California capitalize on their benefits.

If you're unsure whether or not solar energy is worth it for your business, let's take a look at a few advantages of commercial solar in California.

Six Reasons to Invest in Commercial Solar Arrays

Commercial solar in California is a popular choice for companies due to the following factors:

Avoid High Electricity Costs

Electricity has become a necessity for your business's daily operations, and every month, you typically pay energy bills to your local utility company, like:

  • San Diego Gas & Electric (SDG&E)
  • Southern California Edison (SCE)
  • Pacific Gas & Electric
  • Los Angeles Department of Water & Power (LADWP)

Let's face it—electricity costs aren't cheap in California. In fact, as of June 2022, EIA shows that California business pay the highest energy rates in the continental US - #1 in commercial rates, and #2 in industrial rates. Unfortunately, the cost of electricity is only projected to increase in the future. If you've compared your electricity costs today versus ten years ago, it has more than doubled in price. Regardless of your utility provider, you've been subjected to a noticeable price increase over the last few years. On average, SDG&E, SCE, PG&E, and LADWP all have roughly a 5% annual increase rate and have increased 20% in 2022. Fortunately, by going solar, you can lock in lower electricity prices and break free from the utility company's rate hikes.

Power Outage Protection

Every business around in 2019 remembers the PG&E fiasco. PG&E's wildfires followed by bankruptcy caused them to make significant adjustments to their operations, leading to planned power outages during the fire season and higher rates. These outages impacted more than half a million people in California, and according to the CEO of PG&E, it may last for at least another ten years until they can adequately update their infrastructure. Those costs will continue to impact the rate payers. One of the most significant advantages to commercial solar in California is the fact you'll be able to generate your own energy. This helps minimize your reliance on the grid. Additionally, by adding a solar battery to your system, you can ensure you have enough energy to stay ahead of power outages.

Solar Rebates and Incentives

The state of California offers several incentives to encourage businesses to adopt solar energy. The primary financial incentive available is the Investment Tax Credit (ITC), or as it's more commonly referred to; the "Solar Federal Income Tax Credit". The ITC allows qualified businesses who activate solar energy systems to be eligible for a Federal Income Tax Credit of 30% on the cost of their solar energy system. Under the Inflation Reduction Act, this can increase to 40% or 50% depending on the system details. This tax credit can take roughly one-third off the total cost of your solar installation. However, it's critical to know there's limited time on this incentive. Most businesses in California can qualify for the Self-Generation Incentive Program (SGIP), which provides incentives to support existing, new, and emerging distributed energy resources. Essentially, the SGIP provides a grant you can use on solar batteries, making your entire system more efficient and reliable—all while saving money.

Corporate Social Responsibility

There is a trend towards sustainability and social responsibility for organizations. You can get ahead of the game by investing in a commercial solar array. When you prioritize sustainability, your customers, vendors, suppliers, and even local governments will recognize it. While there are several ways to prove that you moving toward sustainability, installing solar panels on your commercial property makes the most sense from an investment, profitability, and ease-of-use standpoint.

Increased Property Value

Whether you're a commercial business that owns the property, or you own a property with a commercial business on it, solar for your commercial building helps increase the resale value of your facility. Having an established solar system helps reduce the amount of time your commercial property remains on the market, as future buyers are happy to pay a premium for lower utility costs that they only need to maintain—rather than installing on their own. Considering most solar panels last up to 30 years or longer, property owners can reap the benefits for years to come.

Environmental Savings

Commercial solar in California is a popular way for businesses to reduce their carbon footprint. The electricity produced by solar panels is clean, renewable, and emission-free. Whereas most of the electricity generated in the US is produced by burning fossil fuels such as coal and natural gas, generating electricity with solar power does not result in any emissions of carbon dioxide or local air pollutants. Using fossil fuels is expensive and harmful to the environment. On the other hand, solar energy is free and readily abundant. By investing in solar energy, you can help reduce your reliance on fossil fuels in favor of one of the most consistent sources of energy available—the sun.

The Cost of Solar Installation in California

When evaluating commercial solar in California, the price of a complete system consists of more than just the cost of solar panels. Some factors that affect the overall price of your system are:

  • Panel costs
  • Inverter costs
  • Installation method
  • Labor costs
  • Financing options

Generally speaking, commercial and industrial solar projects can range from $1.50 per watt to $2.50 per watt. Costs vary significantly depending on whether the solar will be installed on the ground, on solar canopies, or on the rooftop. Best practice is to ensure all equipment is Tier 1 - meaning financeable by banks.
After installing a new solar system, you can expect a 20-40% reduction in energy usage in the first year alone if you are purchasing the energy from a solar provider through a power purchase agreement (PPA). To many businesses, given this arrangement often requires zero invested capital, this ROI is too good to pass up.

Pacifico Power: California's Trusted Commercial and Industrial Solar Company

The team at Pacifico Power has been developing renewable power projects for over a decade, with experience in:

  • Designing
  • Contracting
  • Permitting
  • Consulting
  • Energy trading
  • Financing

If you're searching for high-quality commercial solar in California, start by scheduling a free energy assessment with Pacifico.