While economies of scale used to be a significant demotivator for smaller companies when it came to the affordability and practicality of procuring renewable energy, recent technological and industry advancements in the renewable energy landscape have effectively lowered the barrier to entry for smaller businesses.
In this article, I’ll explain how five recent evolutions in the energy landscape have yielded the most favorable market conditions to date for businesses of all sizes to get started with renewable energy.
Five recent changes in the renewable energy landscape include:
Material cost reduction and labor efficiencies have driven down the cost of solar, and as solar manufacturers have grown, economies of scale have allowed them to lower the cost of manufacturing solar panels even further. Additionally, a variety of other factors have more recently entered the scene and collectively lowered the cost of switching to solar, such as new financing options. While many businesses interested in installing solar panels were thwarted by poor roof quality or not owning their building, today, new financing options and system ownership structures continue to emerge that bundle roof retrofits with solar installation, or further incentivize a building owner to allow long-term tenants to invest in solar. Also, as solar energy continues to grow in mainstream adoption and visibility, overall confidence in solar is boosted, which helps the industry expand and thereby brings down costs.
Solar installations have become more turnkey, and customers can now turn to a single provider for all their energy needs. Packaging all services under one provider simplifies the process and makes it much more logistically feasible for smaller companies with lean support staff to dip into renewable energy. Furthermore, sustainability is becoming “tables stakes,” and in many industries, solar adoption is so prevalent that companies who have not invested in solar can be at a competitive disadvantage. So as customers increasingly value sustainably-sourced energy, investing in renewable energy is ever more justifiable.
A significant limitation for small and medium sized businesses has historically been the amount of space available for the system. However, advancements in design and efficacy have wiped out that barrier. By increasing the efficiency of each panel, the amount of space needed for installation is significantly less restrictive. This allows for closer placement of modules both on rooftop and ground mount systems. Additionally, system tilts are dropping; when solar was more expensive, systems were designed to maximize production per panel, but with more efficient panels, there is less of a need to maximize panel angle.
Recent advancements also allow for solar integration with other technologies, thereby exponentially enhancing the value of solar investments, and making the upfront costs more manageable for smaller businesses. For instance, companies can seamlessly install electric vehicle chargers simultaneously with solar panels, and thereby cover future EV charging needs with solar energy, while saving on installation costs. Additionally, incorporating batteries into solar projects can offset demand charges, and this option is now more affordable than ever as storage technology costs have recently decreased. Another recent integration tool is advanced data monitoring, which provides richer data and extended access that can provide a broader image of overall energy usage. This can facilitate the identification and prioritization of new savings opportunities. Ultimately, these integrated business additions can serve to enhance the overall benefit of a system for small and medium size companies.
As solar energy increases in accessibility, efficacy, and integration, more and more creative ways to increase its functionality – beyond just generating power – are also arising. For instance, installing solar panels on top of carports can help offset insurance costs for car dealerships in hail prone areas, while also adding value to customers and employees by providing weather protection and shade. Schools and educational institutions can leverage solar projects for academic enrichment programs and student curriculum. Lastly, rooftop solar projects keep the roof cool, which minimize building cooling costs.
Ultimately, maintaining a big picture perspective is key. Considering the full lifecycle cost and functionality, as well as the potential impact a solar system could have on adjacent areas of your business are core considerations that should not be overlooked. To get started, the first step in the fiscally and environmentally sustainable renewable energy journey is identifying a trusted partner to help address and solve all your energy needs. Working with a partner who can help you manage energy as a service and who will look at the total cost of ownership over the life of the system is crucial.
Be sure you don’t lose out on solar energy while the time is ripe just because of barriers like not owning your building or the project not financially balancing out the last time you considered it, as new financing solutions, more effective designs, and more efficient technologies continue to make solar a strong business investment and increasingly accessible for businesses of all sizes.
Finally, while historically solar energy has been a wiser and more attainable investment for large-scale corporations with a national presence, recent technological and industry advancements have reduced the barriers to entry for small and medium size businesses, making now the perfect time to invest in renewable energy, no matter if you have five or five thousand employees.
This article was contributed by Alan Russo, Senior Vice President REC Solar. More about Alan here.