How Solar Works
If you put a silicon cell in the sunbeam’s path, the cell catches the energetic photons and turns them into a flow of electrons, or an electric current. These electrons can be forced to flow around an electric circuit and then power our businesses, homes, phones and laptops.
Solar panels work in cloudy weather. However, they do not generate as much electricity as they do during a sunny day. There are many areas that receive frequent rainy or cloudy weather where solar production can still be significant. As the efficiency of solar panels continues to increase, the overall production of panels will go up and help further offset a decrease in production during cloudy periods.
A solar system built with high quality materials and proper construction techniques, that also receives proper maintenance, can last for 25 years or more. There will be some planned maintenance to replace equipment such as inverters at stages of the system life, which doesn’t have as long a lifespan as the solar panels.
Our energy analysts will review your energy bills and decipher how much solar you need and how much can be placed on your roof, land, or carport. A rule of thumb has 500kW of solar offsetting energy bills of $5K a month. A 500kW system requires approximately 50,000 sq. ft. of roof or 1.75 acres.
It depends. Systems can be purchased by the customer, or they can lease it or use what’s called a power purchase agreement (PPA) to buy the energy without owning the system.
Net energy metering is a system that credits owners of a solar system for any excess electricity they generate and sell to their local electric utility.
Benefits of Solar for Businesses
The potential savings generated from a solar project depends on several factors, including the monthly amount you spend on energy, the amount of solar that can be installed at your business, the production potential of the system, the utility your facility is in, and the incentives you take advantage of.
With enough space for solar, a business can offset all their electric bills. Our team will work with you to look at your bills and the other factors to consider, then propose the optimal system size. From there, we can predict the monthly and annual savings over the life of the system.
Other benefits to solar include:
- Sustainability: If you have company sustainability goals, such as reducing greenhouse gas emissions, solar helps you achieve them.
- Marketing and Public Relations: Companies that have invested in solar can showcase their commitment to the environment to their customers and business partners via press releases, on their website or through other marketing channels.
- Functional Benefits: Solar carports provide shade and weather protection for your customers or employees.
The Process of Going Solar
Once you contact a solar provider and request a quote, the company will need to know the business address where you plan to install solar and will need to see copies of past energy bills for the last 12 months. It also helps if you have a discussion with them to tell them what financing methods you prefer and any information you have about your goals in going solar.
Once you have provided the solar contractor with the information needed for a quote, it should take just 24-48 hours for them to generate a sample system design and a quote for you to review. If you decide to move forward with evaluating the system based on the initial data, the solar provider will do formal system engineering and come to your site for a site walk. From there, they can generate an updated pricing contract with your exact system details.
Solar Project Warranties and Guarantees
A solar project should include equipment warranties from the equipment manufacturers, workmanship warranties from the contractor who does the design and installation and production warranties for the company who built or is maintaining the system.
Most contracts should have a system production guarantee, although the production amount may vary. Getting a production guarantee from the company that installed the system will typically require you use that company (or one they select) to maintain the system each year, ensuring proper maintenance. If the system does not meet its guaranteed production, the installer is required to credit you the difference.
Operating and Maintaining Your System
Once a system is installed it can operate effectively with one or two washings a year and less frequent system checks. Throughout the 25+ life of the system there are also planned replacements for some pieces of equipment that have about a 10 year lifespan.
Some of the maintenance such as system cleaning can be performed by the system owner. However, there are specific methods and pieces of equipment used by solar maintenance providers that a businesses maintenance of facilities staff may not have access to. For electrical work and tasks like warranty administration, we strongly recommend using the system installer or their recommended maintenance provider.
Each system can send data to a monitoring platform that should be included with your solar system. At REC Solar, we have always on system tracking in place to detect long term and short-term changes in system production that might indicate a problem. The data helps us quickly diagnose the issue to schedule a service call. Customers can also track system production and set up system alerts, even to their mobile phone.
Solar Financing Options
Solar projects can be purchased with cash (or through a loan), a lease or via a power purchase agreement (PPA). With a PPA, the system is owned and operated by the installer or a third party and the building owner simply pays a pre-negotiated rate for the solar power generated, which is typically cheaper than the utilities rates.
With a power purchase agreement (PPA), no upfront cash is needed. The building owner also does not have to worry about the ongoing system maintenance or the removal of the system at the end of its life, as that is all handled by the system owner. However, because they do not own the system, the building owner does not receive the 30% federal investment tax credit.
A cash purchase will generate the greatest overall savings for a system owner. The system owner also can take advantage of the 30% federal investment tax credit.
A lease is similar to a PPA, with no upfront cost. With a solar lease, you agree to pay a fixed monthly lease payment for the right to use the solar energy system. The federal tax credit goes to the system owner that you are leasing the solar system from.
The federal investment tax credit (ITC) is worth 30% of the system value until 12/31/2019. After that, it is scheduled to decline in value over several years.
- 12/31/20: Declines from 30% t0 26%
- 12/31/21: Declines from 26% to 22%
- 12/31/22: Declines from 22% to 10%
- Future Years; 10%
In addition to the federal tax credit, there are sometimes state or utility specific incentives for businesses to take advantage of. For example, LADWP in Los Angeles has a feed in tariff program that pays a set rate to system owners for all the power they generate that is contributed to the grid. For solutions that include energy storage, Self-Generation Incentive Program (SGIP) program funds are also available to help pay for part of the system.