Are you a land owner looking for a new investment opportunity? With the ever-increasing popularity of sustainable energy practices, investing in commercial solar panels can be an extremely beneficial and profitable venture. Not only will you get to do your part in bringing clean, renewable solar energy into the world, but you can generate steady returns on your investment.
In this post we'll go over how to calculate the Return On Investment (ROI) of commercial solar panel investments so that you can make smarter decisions about deploying capital. Keep reading to learn more.
Calculating the ROI of Commercial Solar System
Calculating your return on investment for a solar project is fairly straightforward, and this ROI calculation applies to all projects stretching up to thirty years.
To establish an accurate picture of the overall financial benefits you'll gain from implementing commercial solar energy solutions, consider factors such as:
- Your current utility kilowatt-hour (kWh) rate and any demand charges.
- Your annual bill without solar.
- The projected annual increase of utility costs over 25 to 30 years based on historical increases.
- The projected amount of solar kWh your system will produce over 25 to 30 years
- The lifetime costs associated with the solar installation, including installation costs, inverter replacement, operations and maintenance cost
- The estimated value of all solar rebates, performance based incentives, and tax incentives received over 25 to 30 years.
- Any applicable taxes.
- Any applicable interest/loan costs.
To calculate the ROI of a solar system we'll need to:
- Find the total benefit received over its lifetime
- Divide that by the total cost of the installation
- The multiply all of that by 100%
We understand the parameters of each solar project can vary drastically. For a more specific ROI estimation, contact us and we can provide you with a more accurate analysis based on your project's specifications.
Investing in commercial solar energy is an excellent long-term strategy that can help reduce utility costs, increase cash flow and bring clean, renewable energy into the world. With this post, we've gone over how to calculate the ROI of commercial solar investments so that you can make informed decisions and maximize your returns.
If you have any questions or would like to learn more about commercial solar systems, feel free to contact us and our team will be happy to help.