BRENTWOOD — Nowadays, you hear a lot about how solar power can benefit homeowners, but what about the benefits it can bring to commercial property owners? The fact is, commercial property owners stand to gain as much as homeowners from solar power, and in many cases even more.
The main benefit solar offers to commercial property owners is the same one it offers to homeowners: a substantial reduction in energy costs. Most commercial properties use a significant amount of electricity, and the more they use, the more they stand to benefit from solar. Take farmers, for example, who pay some of the highest energy rates. As high-risk business investors, farmers are essentially betting their entire net worth on the performance of their crops each season. With this combination of high risk and high energy costs, the amount of money solar can save the average farmer could potentially make the difference between them staying in business and going under.
Even if your commercial property doesn’t consume the kind of energy a farm does, reduced electrical expenses nonetheless translate to extra money, which flows down to your bottom line and increases your cash flow. When divided by the market capitalization rate (the ratio of Net Operating Income [NOI] to property asset value), this additional cash flow can translate to a major gain in property value. In some cases, a $100,000 solar power system investment can yield up to $400,000 in property value from the first day—and that’s before the 30 percent federal tax credit! Because of this, a commercial solar installation in California can pay for itself in as few as three years, which is much faster than the average residential installation. So, if you want to simultaneously increase your business’ cash flow and add value to your commercial property, switching to solar power is the way to go.