Solar's Reduces Operating Cost of a Retail Business, Increases Profitability
Porter's Building Center of Laurie, MO, decision to invest in a Solar PV enables the business to reduce its annual cost of electric usage by more than 50%. Energy cost typically represent 5.5% of a business operating cost.
Incentives for solar make the Return On Investment (ROI) even more attractive. Incentives utilized for this project included:
- USDA's Rural Energy for America Program (REAP) offset initial capital cost by 25%. REAP provides grants to rural small businesses and farms for renewable energy systems.
- The Federal Solar Investment Tax Credit (ITC) of 30%. The ITC enables the business to reduces its tax payment liability to recover its capital outlay.
- An accelerated depreciation schedule such as MACRS (Modified Accelerated Recovery System) allows for the solar asset to be depreciated over 5 years. This means the deductions are weighted toward the front of the recovery period. This depreciation is worth almost as much as the ITC of 30%.
Energy production, KWH (Kilowatt Hours), is key to enjoying the maximum benefits of a system. It is important to consider that energy production is impacted by system design, installation, conversion of sunlight to power, equipment reliability and efficiency. Inverter equipment from SolarEdge was used to ensure the system's uptime is maximized and highest level of conversion efficiency is achieved. Design and installation of the system was over seen by a professional engineer and NABCEP certified solar installer.
An Internal Rate of Return (IRR) for this type of solar project ranges from 10.5 - 15% and a payback period of 4 - 8 years is common.Let’s Talk