1. Case Study of a Mixed Use Commercial Building
The time has come for understanding and commitment. I'm not talking about
marriage. I'm talking about understanding the financial benefits of going solar and
committing to, not only reducing your carbon footprint, but realizing the savings! Over the
past few years the price of solar has come down dramatically and the efficiency has improved
markedly. The motivation for going solar was always an act of altruism or activism or the
obvious figurative of green. Now, solar makes sense as a good investment, in the near term
and long term. This account of a solar system, currently under construction, on a mixed use
commercial building here in California, will show the benefits to society and the building
owner. Get ready for that commitment!
I recently closed a commercial development deal with a building owner who had
several good reasons to go solar, in addition to the above mentioned. The roof of the building
was in dire need of replacement and the owner had been planning to do this for several years,
but it had become imminent. There is an existing exterior (parking lot) lighting issue and his
tenants had been making this a priority so, being good, green-motivated folks they thought
about solar street lights. As the year was coming to a close, the importance of the tax credit
loomed large. Finally, the building was only half occupied and in a growing green real estate
market, it makes a difference when marketing to prospective tenants who want to project that
image.
The process starts with the building owner delivering one year of his utility usage for
the commercial property, so we can size the solar PV system to mitigate as much of the usage
as possible, given the amount of available roof space. In this case we were able to design a
solar system, maximizing the available roof space that reduces the electrical energy purchase
from the utility by twenty-four percent, which equates to over twenty-two thousand dollars in
the first year. Of course, the cost of electrical energy provided by the utility increases by
anywhere from three to six percent per year while the cost of producing electrical energy with
the solar system does not change. Add to that the cost of inflation on future dollars and the
saving is even more significant.
The solar system we constructed on the commercial building is seventy-two kW, with
an installed cost of two hundred and sixteen thousand dollars. Factoring in the thirty percent
federal tax credit and the MACRS depreciation it brings the net-present cost of the system to
just over eighty-eight thousand dollars. The system will be paid off in just under four years
revealing positive cash flow over the next twenty-one years of the guaranteed life of the
system.
This commitment to solar reveals savings in several areas. The most obvious is the
reduction of carbon footprint. In this case, over the life of the system two thousand one
hundred and four TONS of CO2 will be eliminated from the carbon footprint of this commercial
property. That’s the equivalent of planting over forty-nine thousand trees, eliminating over
four million driving miles (two hundred thousand gallons of gasoline) or recycling almost seven
thousand tons of waste rather than sending it to the landfill.
Understanding the benefit to our environment is just one way savings are realized.
Over the twenty-five year life of the solar system the annual savings are, on average, over
thirty-five thousand dollars, bringing the total to just under one million dollars, which is
probably why, upon looking at the proposal I placed on the desk before the building owner, he
looked up with a grin and said, “Wow! I guess you don’t really have to be a great salesman,
do you?”
Resource Box: Whether you’re installing solar panels at home or going through a
solar panels wholesale , make sure to have them professionally installed to ensure
maximum use. Solar installation services are widely available on-line.