3 Ways to Turn Your Energy Expenses Into Cash Flow Generators
By Dan Hancock, Senior Commercial Project Developer, StraightUp Solar
Small businesses in the U.S. spend $60 billion a year on energy (U.S. EPA ENERGY STAR), and these expenses rise as reliably as the sun. However, business leaders can choose to turn their energy costs into cash generators. Now is a good time to look at your facility and ask the following questions:
1. Is My Building Energy Efficient?
An energy audit by a professionally certified energy auditor is the first step to determine the optimal energy consumption for your business. Lighting improvements, programmable thermostats, and HVAC upgrades can produce very quick paybacks from their energy saving. Ameren has stepped up to help by offering very attractive incentives for energy efficiency improvements, and in some cases can even help offset the cost of an energy audit to determine what measures could be implemented to make your business more energy efficient. Additionally, our local chapter of the U.S. Green Building Council offers resources and informational sessions to help identify energy efficiency options, and for businesses located in the city of St Louis, to help comply with the new Building Energy Performance Ordinance.
2. What is My Energy Portfolio?
Your business relies on heating, ventilation, lighting, and motors that in many cases can switch from gas-powered to electric. Rapid technological advances in solar energy make it a cost-effective option for businesses to switch their energy mix and maintain reliability. Add in an EV charging station to address fleet expenses, and your business can save even more money when powered by your solar energy generator.
3. What are the Incentives for Going Solar?
With the lifetime of a solar PV system at 25 years or more, businesses can lock in much of their energy costs with the levelized cost of energy from solar. This term describes the energy produced by the solar array divided by the costs of the PV System. I have designed solar PV systems with the levelized cost of energy between 2 and 4 cents, which is well below the current cost of electricity. Solar arrays under 100Kw (a normal size for small businesses) have the added feature of net metering which allows excess energy to be sent to the grid and the business receiving a credit for that energy generated.
There is a very small window for small businesses to take advantage of federal and local incentives that drive down the price of solar. For the next two years, the federal Investment Tax Credit stays at 26%, allowing businesses to take a dollar-for-dollar reduction in their taxes paid. The tax credit steps down to 22% in 2023 and 10% in 2024. Additionally, Ameren Missouri offers a 25 cent a watt rebate for commercial customers. For the average small business, that could translate to an extra $25,000 in cash. When you factor in interest-free financing or PACE financing through property taxes, switching to solar can immediately help with cash flow and make solar affordable.
This year an innovative solar group buy program called Renew STL Solar launched to help small and medium-sized businesses switch to solar. The program, organized by Renew Missouri – an expert in energy efficiency and renewable energy – extracts low prices from the solar installer and will provide rebates to participants. More businesses going solar means more rebates in Renew STL Solar. Renew STL Solar will honor participating businesses with awards and public acknowledgment of their transition to solar energy and their leadership in our region’s greenhouse gas reduction goals. For more information, see https://renewmo.org/renewstlsolar/)
If these three questions piqued your interest in how energy efficiency plus solar can create cash flow and separate your business from the crowd, we are here to help. Contact us now!