The time has come to give solar energy a look. The cost of solar panels is at an all-time low, and key financial incentives will soon expire. By powering operations with solar, carwashes can make a positive environmental choice and greatly reduce power costs.
Furthermore, studies show an overwhelming majority of Americans support greater use of solar energy; as a result, owners and operators can use a new solar panel installation as a marketing tool and make their carwashes stand out from the competition.
How it works
Solar can provide some or all of the power a facility needs — limited only by available space. Most installations are roof-mounted, but larger installations incorporating ground-mounted solar panels are also common.
During the day, as the sun is shining, solar panels absorb and convert sunlight into energy, which can be used within the carwash’s facility. In the event that a solar system produces more power than needed, it goes back into the grid where the local utility company will buy it from the owner. At night, or on cloudy days when solar cannot provide 100 percent of a wash’s needs, energy is pulled from the grid — the system works seamlessly and without interruption.
For solar panels that are installed in an area where power outages are frequent or there is a threat of losing power during a natural disaster, a business can install a solar system with battery backup.
Much like a gas or diesel generator, solar panels can be installed with batteries and programmed to create a level of autonomy or redundancy, which means the business will not stop operating if the grid goes down.
Systems using energy storage are a little more expensive than traditional installations, but industry analysts expect battery costs to decline rapidly over the next few years, following the path of plummeting solar panel prices seen in recent years.
Cost to invest
The U.S. government currently offers a 30 percent federal tax credit eligible toward the total cost of a solar project (materials and installation). This significant tax credit will decrease to 10 percent at the end of 2016; so, if you are interested in going solar, now is the time to act in order to lock in a good price.
For commercial customers, 85 percent of total solar installation costs are eligible for depreciation at an accelerated rate. The value of the Modified Accelerated Cost Recovery System (MACRS) depreciation benefit can be challenging to consider without the guidance of a professional accountant. We strongly recommend prospective clients speak to an accountant about their particular situation.
Plus, certain states offer additional tax credits for solar, such as South Carolina for example, which provides a 25 percent solar tax credit. The maximum incentive for the state’s tax credit is $3,500, or 50 percent of the taxpayer’s tax liability for that taxable year, whichever is less. This credit has no expiration date and any excess credit may be carried forward up to 10 years. Again, speak with an accountant to see how this can be applied to each unique situation.
Many utilities offer further rebates and incentives to encourage businesses to go solar. SCE&G, Duke Energy and Duke Energy Carolinas have all introduced new solar rebate programs to incentivize customers in their respective service territories. SCE&G, as an example, offers performance-based incentives which can be credited to customers’ bills for the next 10 years. Duke Energy and Duke Energy Carolinas offer one-time rebates paid as the system comes online to the customer or the installer. Both of these programs will result in payback periods under four years for most commercial customers.
Return on investment
Depending on where a business is located, and how much it pays for power, a solar installation will provide a return on investment in three to 10 years.
Furthermore, keep in mind power rates have historically been on the rise, so the power bill a business pays today will cost even more money in the future. Solar allows owners and operators to protect their businesses against rising power costs, creating a certain level of immunity to power rate increases.
Most solar energy systems are warrantied for 25 years with a 40-year expected lifecycle; therefore, the investment will pay for itself time and again under its operational life. Plus, many installers include monitoring packages which enable businesses to see exactly how much energy they are producing in real-time. Moreover, a carwash could add a TV monitor to its waiting area and stream this information to show customers how solar is providing the power to wash their cars. This is a great feature customers will most likely appreciate.
For those who think solar is too expensive, think again. Many solar installers offer zero-down financing arrangements, of which the monthly payment is less than the value of energy produced (net-positive savings). And, if your business is tight on cash or credit, a modern financial tool called a solar lease is now available which enables a carwash owner to essentially “rent” roof space to a solar installer in exchange for a lower monthly power bill.
It’s no surprise that some of the largest, most successful North American businesses utilize solar energy to reduce their fixed costs. Apple Inc., Google, Cisco Systems Inc. and Amazon.com Inc. all power their operations with solar; and if they’re doing it, well, isn’t it at least worth a look?
Carwash owners and operators can request a free solar consultation from a local solar installer. These professionals provide a detailed analysis of a facility’s power requirements along with a proposal to offset or eliminate monthly power costs.
Michael Chance is the owner of Chance Marketing Group, an online marketing consultancy focusing on the solar industry. One of his solar clients, Circular Energy, recently completed two solar installations for a chain of environmentally friendly carwash facilities in Texas, which will save the owner approximately $100,000 during the 25-year system lifetime and solar panel warranty period.