Solar hot water and solar electric systems can save you money on your utility bill and decrease your greenhouse gas emissions. Depending on your business’ energy needs, a solar system can pay itself back in less than 10 years. With technologies lasting 25 years or longer, you can more than double your investment! A solar installation will also increase property values, as well as demonstrate a commitment to protecting the environment.
About Solar Energy
Solar Photovoltaic (PV) Modules generate an electrical current when a solar cell is exposed to sunlight. Inverters convert the direct current (DC) produced by the solar modules into an alternating current (AC) for use. This energy is measured in kilowatts (kW), so the size of a solar electric system is indicated by its generating capacity in kW. Each kW of system capacity typically requires 100 square feet of modules to be installed. In the Bay Area, each kW of system capacity may generate up to 1,425 kW hours (kWh) / year.
Solar for Your Business
Is solar the right energy option for you? Follow these steps to begin exploring your options for a solar electric system:
STEP 1: Obtain an Energy Audit and Determine your Electricity Needs
An energy audit will help you determine if there are ways you could be more efficient in your energy use. Energy efficiency could save you money on your monthly electric bills as well as help to reduce the upfront costs of solar! Using 12 months of PG&E bills (accessible online) can show see how many kWh your business uses annually. This information can help to determine what size solar electric system would be needed to meet annual electricity needs.
STEP 2: Begin Planning for Solar Electric
Once you determine that solar is right for you, be sure to do the following:
- Get Quotes From 3 Licensed Installers. Solar installers should have a C-
- 10 (Electrical Contractor) or C-46 (Solar Contractor) license, which you can verify with the Contractors State License Board. Be sure quotes include costs associated with any necessary roof improvements or electrical upgrades, and that they specify which party will be responsible for obtaining proper permitting and applying for rebates.
- Check Warranty Information & Maintenance Instructions. Most solar electric panels come with a 25 year warranty. Inverter warranties are usually 10 years, so you should expect to replace the inverter at least once during the life of the system. Solar modules may require cleaning after long periods without rain, and most vendors recommend annual system maintenance.
- Call Your Insurance Agent. Make sure your insurance will cover the system and see if you need to be aware of any installation issues.
- Consider Financing. You may be able to finance your system with a monthly payment similar to or even less than your current electric bill. Traditional options include home refinancing or equity loans, business loans, and construction loans. Solar companies have also developed financing strategies that include solar leases and power purchase agreements.
Financing your Solar Project
- Solar Loans: Whenever you get a solar quote for your business, the quote will include a “Gross Cost” and a “Net With Rebate” cost. The Net With Rebate cost is the amount you will have to come up with to pay for your solar system after the California Solar Initiative rebate and other incentives have been subtracted from the Gross. (Please note that any federal tax credits will be applied after you purchase your system.)
- Solar Leasing: The increasingly popular solar lease requires a very low up-front payment (from $0 down to <$1000), and guarantees a monthly payment lower than your current electric bill. Under a lease option, the leasing company owns the solar system on your building, and you make monthly payments to them for your electricity. You are also accountable for paying your local utility for any additional electric needs not accounted for by the solar system. Because you do not own the system under a lease, the leasing company is the recipient of any applicable state and federal rebates and tax incentives. At the end of your 10 to 15 year contract, you are usually offered the option to purchase the system outright, to renew your lease, or to end your contract. Leases can be good options for those who may not be able to make the down payment for an outright purchase or cannot get a reasonable loan rate.
- Power Purchase Agreements (PPA): Under a PPA, you pay a low up front cost (+/- $1,000 or more) to a PPA company and a monthly set electrical rate for electricity generated from your panels. As with a lease, the PPA company takes care of maintenance and repairs, and because you do not own the system, you are not eligible to receive the tax benefits or renewable energy credits associated with the system. Under a PPA, you are still tied to the electrical grid, so any electricity you need beyond that generated by your solar array is supplied by your utility.
- Property Assessed Clean Energy (PACE): Property Assessed Clean Energy programs involve municipalities offering a bond to investors, which is used to fund residential and commercial loans for solar and energy efficiency projects. The loans are paid back with annual assessments on the property tax bill of borrowers. A key characteristic is that the loan is attached to the property rather than an individual borrower.
Free Solar Audits
Union City’s businesses can receive solar audits of their properties at no charge! SmartSolar offers independent, site-specific analysis of solar and energy efficiency installations to local businesses. This free program demystifies solar and energy efficiency investments with consumer-friendly information and advice.
A SmartSolar audit assesses a property’s potential for installations of solar technologies and energy efficiency measures, including cost-benefit analyses, information about local contractors, building codes and ordinances, financing options, rebates, and incentives. SmartSolar can also help clients navigate the management of solar projects at their properties.
For more information, visit the SmartSolar website or call (510) 981-7750.
California Solar Initiative (CSI): Grid-tied systems may qualify for an incentive from PG&E’s CSI program paid in one sum or over time. Visit the California Solar Initiative website for more information.
Federal Income Tax Credit (FITC): You may qualify for a FITC of up to 30% of the post-CSI system costs.