Benefits of Solar for Large-Scale Manufacturers

Today’s U.S. electricity demand has rarely been higher, and some forecasts show even more decades of solid power demand growth.

That presents a problem for large-scale manufacturers, who often cite energy costs as their most significant expense.

In response, forward-thinking manufacturers have already started to adapt to changing energy needs, with many turning to solar as part of a broader solution for lowering costs and guarding against energy instability.

This may be the right approach for your manufacturing operations, too.

In this blog, we’ll cover the most popular solar power benefits for manufacturers and how a transition to solar can provide the cost savings and return on investment your business needs.

We often receive questions about energy savings for a manufacturer that goes solar.

It’s not a one-size-fits-all answer, and the numbers vary depending on the size and output of the system, utility rates, location and financing package.

But here’s what we do know: Compared to relying solely on grid power, a commercial solar + storage installation — particularly when financed as a power purchase agreement (PPA) — will often be much cheaper and beneficial for a manufacturing business over the 30-year lifetime of the solar system.

That is likely due to solar’s tangible and intangible benefits, including the following:

Few people in your organization will argue the benefits of commercial solar. It’s clean, cost-effective and a solid, reliable technology.

Even so, business leaders are more likely to wonder if the benefits of solar far outweigh the cost of investing in a system.

For many manufacturers, the answer can be a resounding yes. And for those who choose to finance their projects with a commercial PPA, the benefits may be even more significant due to the following reasons:

No initial costs: Unlike other commercial solar finance options (including leasing, loans and cash), a commercial solar PPA eliminates upfront costs and shifts those expenses to the developer. By moving your solar project off your balance sheet — and eliminating your responsibility for costs associated with sizing, design, construction and installation — you can bypass initial investment costs and start saving on your system immediately.[JP1]   And in doing so, you can focus your resources on internal needs.

No maintenance required: By financing your system as a PPA, you don’t have to dedicate staff to operations, maintenance or system optimization. All you have to do is pay for your system’s electricity. Then, the solar developer performs long-term and routine maintenance to ensure your system runs as expected.

Are your energy costs steadily increasing each year?

Deploying onsite solar on your property is one of the fastest and most cost-effective methods to cut those rising energy rates.

On its own, power generated by an onsite solar rooftop, ground mount or carport replaces the power you’d typically buy from your utility. So, when you invest in a solar project, the cost per kWh for electricity produced by your solar panels will be lower than that of your utility, which will help slash your utility bill.

However, your organization’s round-the-clock operations likely incur high peak demand charges. For some manufacturers, peak demand charges can make up over 50% of their utility bill.

Combining solar with an energy storage system magnifies the savings you’d typically see with onsite solar alone. By sending the excess solar produced by your solar array to your energy storage battery during off-peak hours and low-cost time of use rates — and discharging that stored energy during peak hours — you’ll be able to even out your energy load. And an even energy load reduces demand charges, significantly increasing cost savings.

Cutting your energy bill gives you one of the most immediate benefits solar can provide your business: long-term and significant savings on soaring energy costs.

You’ve likely heard it before: The U.S. grid is strained. And aging. And pressure on the grid is only expected to rise during the next decade.

That additional strain on an aging grid could lead to more grid instability.

And grid instability can interrupt power for your critical round-the-clock operations, affecting productivity, lead times and production schedules.

Integrating solar and energy storage into your operations ensures your business becomes less dependent on the power grid, giving it more control over its energy output and improved power quality.

In addition to better controlling your energy output during mild and moderate weather, energy storage and solar allow you to better ensure the reliability of your operations in advance of bad weather.

By shifting control of your energy output away from the utilities and back into your hands, you can take control of your energy costs and hedge against future utility increases.

For manufacturers, the improved power quality and more reliable and seamless operations from a solar + storage system can be invaluable to their bottom line — and a surefire way to protect the integrity of their operations.

Although corporate sustainability emerged a few decades ago, it was only recently accepted as a core business strategy.

But over time, public awareness and support for environmental issues gained steam.

Today, consumers want to know how companies are navigating climate change. In response, companies are folding bolder, more ambitious environmental and decarbonization goals into their overall business strategy.

With manufacturing operations requiring high energy usage and consumption, a higher carbon footprint can threaten your brand reputation and attractiveness for consumers, customers and investors.

Adding solar to your facilities can significantly reduce your carbon footprint the second it begins operations — and for the 30-year life cycle of the system. It also has the potential to help your company build brand loyalty with customers who are choosing companies that share their values.

Electricity costs fluctuate constantly. They can rise and fall due to changing demand in the energy markets, global supply chain issues, and sudden weather events.

This makes it difficult to accurately project the future financial state of a company that uses lots of energy. You can’t rely on numbers too far out in an economic forecast. For example, there’s no clear answer to what electricity will cost per kilowatt-hour in 2030.

But here’s what we do know: utility rates in some markets, like California, have more than doubled in recent years. And even higher rates are on the horizon.

Your energy needs will likely increase as your business grows, leaving you at the mercy of rising electric prices.

A solar and storage system (financed as a PPA) locks you into a fixed energy rate, typically designed to be lower than the utility’s electric rates.

With that immediate reduction in energy costs, you could be cash-positive

as soon as day one. A fixed energy cost in a volatile market can lead to more accurate financial projections and profitability.

Yes, solar energy will help you reduce costs. But it’ll also help broaden the appeal of your business, help you make more informed financial projections, and guard against the common business risks of relying on the utility grid.

REC Solar can help you unlock these solar power benefits for manufacturers. Founded in 1997, our nationwide team of experts has installed more than 800 solar and storage solutions for commercial and public customers. Our expertise will help you find, install, and benefit from your ideal solar solution faster. 

Get in touch to learn more about what solar energy for manufacturing can do for your business.