3 Steps to Solar Power

What you need to consider before letting the sunshine in.

Electricity has always been thought of as an uncontrollable cost—something you are dependent upon to run your business. This is true whether you’re a lean startup running computer equipment 24/7, or an established company cooling a large building (or buildings) full of people.

Putting a grid-tied, solar energy system on your roof, though, is like installing a small power plant. Your solar panels create electricity from the sun’s energy, which you can then use to power your business. And when your panels produce more energy than you’re using, that electricity feeds right back into the grid, causing your meter to spin backwards.

Benefits of Solar

In the context of solar energy, environmental responsibility is likely what comes to mind. And it’s a big part of the picture. A typical 25-kilowatt solar energy system in Missouri will produce approximately 32,808 kilowatt hours of electricity a year, for the 25-year lifetime of the system. That’s the equivalent of offsetting the carbon dioxide emissions of 2,595 gallons of gasoline consumed by cars each year.

Some benefits are social. Solar power is at its peak during the middle of the day, when the grid is experiencing peak demand. Producing your own solar power means a reduced strain on the electrical grid. And customers, investors—even employees—are more likely to work with companies that demonstrate environmental responsibility.

Because of the current financial incentives available for going solar, you can realize a less than three-year payback on a 25-year asset, as well as a greater than 20 percent Internal Rate of Return (IRR) on your investment.

Before your company decides to go solar, there are three steps you should take.

Do Your Research

A solar energy system is a long-term investment. Whether it comes in the form of online reading, talking to colleagues who have chosen to use solar power, or talking to and comparing solar installers—or all of the above—it’s smart to gain a basic understanding of how solar energy works, and if it makes sense for your business. Not sure where to start? The Solar Energy Industries Association—www.SEIA.org—is a terrific resource, whether you’re interested in how solar works or want to read more about solar policies.

Understand Current Incentives

In 2007, voter-initiated Proposition C passed in Missouri to a 66 percent majority, setting in place the state’s Renewable Energy Standard. This law requires investor-owned utilities—KCP&L and Ameren Missouri—to source 15 percent of their energy from renewable sources by 2021. They are also required to pay a $2-a-watt rebate to businesses and individuals who install rooftop solar-energy systems, up to 25 kilowatts (25,000 watts).

The federal government also offers a Solar Investment Tax Credit of 30 percent of the total solar energy system cost. As a physical asset, solar is also included on the federal accelerated depreciation schedule (MACRS) and is currently eligible for 50 percent bonus depreciation in the first year.

Understand Building Requirements

  • Do you own your own building?
  • Is your roof 2,500 square feet or greater in size?
  • Is it structurally sound? Most solar arrays can be mounted without roof penetration, but will need to be able to support concrete ballasting blocks. If you’re not sure of the soundness of your roof, Solar estimators, designers and engineers can work to help you determine this.
  • Do you have roof space available that is south-facing and minimally shaded? Southern exposure ensures your array sees the best sun.