Cost and ROI are important considerations for anyone who is considering installing a solar energy system. Both business owners and residential customers can expect huge savings by generating their own free energy from the sun instead of pulling energy from the grid. The key to ensuring your system saves you as much money as possible lies in maximizing your return on investment (ROI).
The ROI of solar panels can vary considerably based on how efficiently designed your system is and whether you take advantage of financing and rebates. When working with a new solar energy client, Cedar Creek Energy takes all the necessary steps to ensure you optimal savings. We identify the best technologies, equipment, and energy storage options for your circumstances. In addition, we research applicable tax advantages and pursue rebate and grant opportunities on your behalf. Read on to learn more about how Cedar Creek Energy can help you minimize your initial costs and see great ROI from your solar energy system.
Calculating ROI for Businesses
Solar energy installers use this basic equation to calculate a rough estimate of payback time for a solar system:
Total System Cost ÷ Value of Electricity Generated ÷ Your Annual Electricity Usage = Payback Time
The simplest way to increase your ROI and decrease payback time is to change the values in this equation, with the easiest change being in the initial cost of the system. Right off the bat, there’s good news about system costs: Installation is cheaper than ever. From 2006 to 2016, the average cost of a professionally installed system dropped from $9/watt to approximately $4/watt. In addition to these already-low prices for solar system components and installations, there are numerous opportunities to further decrease your initial investment.
Utilizing Grants and Rebates to Lower Upfront Costs
The price of your new energy system can be further decreased through grants and rebates. When calculating the expected ROI of a solar energy system for our commercial clients, CCE takes into account all the available rebates and tax incentives. There are numerous ways to lower your tax liability, such as the Federal Investment Tax Credit. This program allows commercial solar energy customers to receive a 26% tax rebate on their taxes in the form of a check.
The Xcel Energy Solar Rewards Program is another way to save money through solar rebates. This program offers bill credits for energy produced by new solar energy systems for the first ten years they are installed. It’s a great way to lower the payback time of your system on a monthly basis.
Reaching Break-Even with Your Commercial System
Generally, the break-even point for both commercial and residential solar energy systems is between seven and ten years. After this point, you will be making money off your system by selling surplus energy to your utility company. They will use energy produced by your system to power other businesses and homes. This is called net metering; it’s a common billing practice that benefits the consumer by allowing them to pay for only the net power they use each month.
Most solar arrays designed and installed by Cedar Creek Energy are under a 25-year manufacturer’s warranty. With a system producing for this long, commercial solar power systems Minnesota users will see big savings which you can invest into your employees or use to augment other areas of your business. Whether you’re looking to expand your company or just help your bottom line, the extra money in your budget every month will help your reach your goals. When you work with Cedar Creek Energy on your solar installation, we will see your commercial project through from start to finish while saving you money at every step along the way.
Increasing Solar ROI for Homeowners
Now is the perfect time for homeowners to install a solar energy system on their home. While solar may have been cost prohibitive in the past due to high production and installation costs, those costs have dropped 77 percent since 2010. As costs have plummeted, the quality of these systems has increased drastically. All these recent developments add up to an impressively improved payback timeline.
Cedar Creek Energy ensures a great ROI for our residential solar power systems Minnesota customers in many of the same ways as we do our commercial clients. Through the Federal Investment Tax Credit, some of our residential clients have received a tax credit of $15,000 or more – which is taken from their total tax liability for the year and drastically decreases their installation costs.
Ongoing Savings Mean A Quicker Payback for Residential Solar
In addition to the savings Cedar Creek Energy provides during the initial installation of a new system, switching to solar energy will also cause a large decrease in your home’s monthly utility costs. By signing our residential clients up for the Xcel Energy Solar Rewards program, Cedar Creek Energy ensures homeowners will receive a bill credit for every kWh their system produces in surplus of their personal energy needs. This program lasts through the first ten years of ownership of a residential solar energy system. Through these bill credits from Xcel Energy, some of our residential customers have saved over 87% on their energy bill each year!
If you’d like to see your monthly budget benefit from the great ROI of solar energy, contact Cedar Creek Energy for a free consultation.