Is going solar affordable for homes & small business?

| by Guest Blogger
Is going solar affordable for homes & small business?

Solar panels at Nellis Air Force Base via Wikimedia Commons

A few years ago the question 'is going solar affordable for small business?' would have seemed like a joke. But the growth of solar power in recent years has brought the costs down so far that solar is now considered a serious contender to traditional American power staples – coal and oil.

Solar still only accounts for just over 1% of America's total energy supply, but that's an astounding improvement on just four years ago. US solar capacity has more than quadrupled since 2010.

The upshot is simple: solar is now cheaper than it has ever been, and as the market grows it will only get cheaper. The question is, is it already cheap enough? Could 2015 be the year your business 'goes solar'?

The sun don't cost a thing

OK, so solar power isn't free yet, but the price has fallen dramatically. The price of solar has fallen from $76.67 per watt in 1977 to 74 cents today. The cost of installing panels has dropped to just $3 per watt produced, which is a 60% drop from just three years ago.

2014 is the year the cost of installing a photovoltaic solar array fell to the same cost as building a new coal power plant, relative to the energy produced. That makes it a landmark year.

Of course, as interesting and laudable as progress on the infrastructural front is, that doesn't necessarily make solar affordable for a small business.

Cheaper energy bills

Aside from the environmental contribution, one of the chief reasons to go solar is cheaper energy bills. Far from being an expensive luxury, solar panels could well save your business money, in the long term at least.

Though Feed-In-Tariffs (FIT) – where you sell your surplus energy back to the grid – aren't nearly as widespread in the US as Europe, but what we do have is net metering, which many experts argue is actually more sustainable, and more beneficial in the long term.

Rather than selling electricity as with a FIT, under net metering you simply offset the energy you're not using from the grid against what you do, resulting in a lower energy bill. This really comes into its own now that thermal solar systems – otherwise known as concentrated solar power (CSP) – have become more viable. With these systems you don't just use solar power when the sun is shining, the energy is stored to be used at night or on a cloudy day. With a CSP system you could, in theory, power your entire business yourself and buy nothing from the grid.

So in terms of ongoing costs, solar is not only affordable for a small business, it can actually be viewed as a cost-cutting exercise. And this will only become more true as the market expands and the price of solar continues to fall.

Up-front financing

Of course, installing panels isn't free. The average cost is around $30,000 for a home. That's some serious capital for a small business. Yes, the savings should eventually cover the initial investment, but we're talking about a period of years. Even in California – the sunshine state – where the average annual saving from going solar is an impressive $1,392.

However, one of the main reasons behind the recent rapid growth in American solar is innovative financing. Solar leasing and solar loans have made installing panels affordable for home owners, setting the energy savings against the cost of installation in a very real way, and there's no reason the same finance packages can't be used for a small business.

And depending how pro-solar your state is you may even qualify for government assistance in the form of a grant or preferential loan.

What about the future?

Of course, although American solar has quadrupled, it still only accounts for just over 1% of the United States' energy mix. That means it's only going to get cheaper.

Renewable energy is, without a doubt, the future of American electricity. And the US is peculiarly suited to solar. The entire country could be powered a hundred times over with solar. The two things standing in the way of solar energy before were the relative cost, and the lack of storage capacity. Both of those points are now moot.

And with the recent historic climate deal between the US and China, we are finally committed to weaning ourselves off fossil fuels.

If it's only going to get cheaper, that begs the question: why not wait until it does? Firstly, solar is already lowering energy bills – why continue buying from the grid when you can already save money? And secondly, because while the solar industry is still nascent, it's supported by the SunShot program. State or federal funding will dry up as solar becomes more common and no longer needs government encouragement. That 30% tax credit won't last forever.

So. To answer the question 'is going solar affordable for small business?' Yes. It is. It may not have been even a year ago. But it is now. Let's harness the sun.

Guest post by Ella Jameson

Topics: Going Green, Photovoltaic / Solar Panels, Proud Green Building, Solar Power, Sustainability Trends & Statistics

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These columns are the work of our guest bloggers who want to share their expert green opinions on a range of topics.

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