Commercial Solar Systems

Investing and Products in Commercial Solar Systems

Commercial solar systems are the fastest growing part of the solar market today. Many government agencies have mandated that power companies must utilize a percentage of renewable power. Solar energy is a renewable power source and the demand for new solar energy farms will increase as more power companies fall under these mandates. The solar energy industry expands as more businesses take advantage of the federal tax credit of 30% for solar power grid systems. This tax credit is available currently through the year 2017.

How Solar Power Works

Solar power conversion of the sun’s rays into electricity occurs by using photovoltaics (PV) or concentrated solar power (CSP).

PV, or solar cells, convert sunlight into electric current using the photoelectric effect. Simply put, the photoelectric effect uses electrodes exposed to ultraviolet light to create electric sparks. PV cells take these electric sparks and convert them to electrical power. Small and medium sized businesses, as well as large solar energy parks, use PV systems.

CSPs utilize mirrors and glass lenses to take a beam from the sun and concentrate it, similar to the effect when a handheld magnifying glass concentrates the sunlight into a small pinpoint. The resulting concentrated heat is used to run conventional power plants. Tracking systems are used to follow the path of the sun throughout the day, so they can gather as much sunlight as possible. They produce power at a cheaper rate than PVs and development has taken a turn to large solar power farms using CSP. These farms, or solar power commercial plants, are rapidly becoming price competitive with conventional power plants.

How Investing in Solar Power Pays Off

The price of PV panels has been steadily dropping. PV systems use no fuel and have a life of 25 to 40 years on the average. This has made PV systems increasingly popular with businesses seeking lower fuel costs while harnessing renewable sources of energy. PV systems pay back their investors in 8 to 12 years.

Businesses can stabilize their energy costs and enjoy a quick return on their investment while availing themselves of tax credits after installing commercial solar power systems. Once the return on investment has been met, a business will enjoy free power production and lower utility bills from power companies. Businesses can also let their customers know that they are “green” and draw a whole new market by letting the public know they run on solar power.

Investors who would like to tap the potential of commercial solar systems can enjoy the benefit of long term power purchase agreements, called Solar Power Purchase Agreements (SPPA). An SPPA relies on investments from partners, which the solar power installer uses, to expand solar energy projects. This cuts the costs of development for the solar power systems. The investors receive a solar investment tax credit in return that reduces their profits and their tax burden. State tax agencies offer additional credits, and for more information, check this State Database.