Should your organization take the plunge into greener energy? Read on to learn more about adding solar energy to commercial properties!
Why add solar to commercial properties?
Adding solar to your commercial property can certainly increase its property value. However, the location, local policy, the quality of installation, and other factors can impact how much value the solar panels will offer. Want to get a better idea of how much value it could add to your particular property? We suggest hiring a qualified energy consultant to evaluate the factors that are unique to your project. In addition, talking to a local commercial property appraiser is a good idea. The local appraiser can share recent trends and recommendations for your area.
Reports suggest homebuyers will pay more for homes with solar energy. That is promising for commercial property owners, too. All this being said, there are more reliable ways of increasing your property value. If increasing property value is your main goal, you should look at other options first. But thankfully, there are plenty of other reasons to go solar!
What tax incentives are available to real estate owners?
Commercial and industrial property owners are eligible for a generous federal tax credit program. Through the end of 2019, your organization can claim 30% of the installation costs as a tax credit. In 2020, you’ll be able to deduct 26% of the cost of the system from your taxes. However, the percentage declines from then on—so it’s best to start planning now. You can claim this tax credit as soon as your system is completed, as long as it’s operational by the end of 2023.
2023 update: Learn about the ITC for businesses in 2023.
How can solar fit into the long-term business strategy of a company that owns and builds real estate?
Solar has the potential to reduce your energy expenses, allowing you to save money each month on your electricity bill. While there aren’t concrete numbers for commercial properties, the average residential property can save anywhere from $15,000 to $50,000 on electricity over 20 years, depending on its location and other factors.
If you have a solar energy source, you can advertise it as a way to pass savings onto your customers or tenants. And, if you’re trying to improve your public perception, solar can be a key piece of your strategy. It shows the public that you’re socially responsible and you care about the environment. Generally, if you’re willing to invest in technology that can change the world for the better, people will assume that your company is reputable.
Can you explain how owners might use solar as a revenue stream?
Tax credits and reduced electricity bills aren’t the only ways your bank account can benefit. If you’re a landlord or owner, you can turn solar into a major selling point for your units. Tenants are often thrilled to benefit from the energy savings and the positive reputation that solar energy brings. With solar, you may be able to attract new tenants and encourage them to stay longer. In addition, it may allow you to charge higher rent.
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How can I fit solar into future developments and remodels?
Do your goals include sustainability, energy savings, and improving your public perception? If so, solar energy might be ideal for your organization. When you’re planning your next building project, take the time to consider the costs and benefits of solar. It might be exactly what you need to take your development or remodel to the next level. Talk with our team today about how we can help you manage these green properties.