This blog has been reposted with permission from SolarKal.
By Yaniv Kalish, CEO and founder of solar broker SolarKal
Certain industries are better suited than others for solar energy. The manufacturing industry is at the top of those sectors that check off many of the boxes solar advisors require before recommending a switch to solar panels.
The New York State Energy Research and Development Authority (NYSERDA) says that, “The cost of producing products is something every manufacturer considers in the effort to stay globally competitive. A few ways you can control those costs is by improving energy and operational efficiencies and optimizing manufacturing processes. Investing in improvements in these areas is a proven way to reduce costs, improve product quality, and increase output.”
Here are three reasons why manufacturing companies are great candidates for solar.
Big machines, big bills, big roofs
Manufacturing companies require industrial-grade machinery. Big buildings are required to house that equipment, which means extra-large roof space that is ideal for solar. Also, often those machines are running 24/7, leading to high energy bills. Solar panels can eliminate some, if not all, of manufacturer’s monthly energy bills, saving hundreds of thousands to millions of dollars.Solar energy locks in a predictable cost stream. After paying off the PV system, which can be financed without having to dig into the capital expenditures budget reserved for equipment purchases, manufacturers can enjoy free energy for the life of the system.
New way to bring in the green
Manufacturing companies are facing more competition, along with import tariffs. It’s time to look in a different direction for a boost to the bottom line. On top of energy savings, Federal and State solar tax incentives help cover the solar system cost to provide double-digit returns. Plus, most manufacturing businesses own their buildings. This puts them in a unique position to almost instantly increase the company’s value and create a competitive cost advantage.Furthermore, reducing their carbon footprints and going green can make companies more attractive to investors, future buyers and potential customers. The company has some great news to share with investors, the board and the media.
Business as usual
Didn’t budget for the switch to solar? A variety of tax incentives and financing options exist so that any manufacturing company will not have to invest directly in solar. There are two Federal tax incentives now available: Receive a tax credit worth 30% of the system (i.e., if a system costs $1 million, the company will receive a Federal tax credit for $300,000) and depreciate 100% of the system value in the first year.State incentives vary depending on where the business is located. New York, New Jersey, Massachusetts, Michigan and California are some examples of states with exceptional incentives. In addition, solar companies offer financing solutions–such as a solar loan or a solar lease–that allow solar savings and incentives to fund the project. Once the system is installed, there is little to no maintenance. A commercial solar energy system often comes with a 25-year warranty and maintenance contracts, so that there’s no stress about a broken panel.