Solar has grown in popularity and interest across Canada and the world without a doubt, but its greatest challenge in growth is in understanding it.
We focus on commercial solar installation because the payback periods offer much better value. But just because something is a great value doesn’t mean every business has the money just sitting around to invest in it. Any business owner will tell you the greatest challenge is cash flow, they all have upgrades in equipment, human resources and marketing they would love to make. Knowing it would increase their efficiency, their quality or their sales revenue.
This is why Energy as a Service programs are so valuable to business owners, setting up a lease to own structure for the Solar installation.
The business is simply spending the money they would normally be spending on energy consumption on the lease. The lease is a key factor as this makes this investment 100 percent deductible as a business expense, where in a typical capital expenditure there would be limits on how much can be deducted annually. But unlike any other investment a business can make they know they can reduce their energy costs making the investment revenue neutral.
Now the faster a business owner can pay off this lease the sooner they can enjoy free low maintenance energy creating energy independence from the rising electricity rates we are stuck paying. But ideally setting up a lease payment term that matches your payback period is ideal because you don’t notice the difference in your bottom line and as energy prices rise you save more.
But what should we expect for a payback period?
This can vary greatly based off of location, roof angle, current utility pricing mix (consumption vs demand) which is why we take the time to do a full assessment.
We see properties with average solar irradiation for Alberta and average roof angles provide better paybacks than the best irradiation and a more ideal 30 degree roof angle. All because the first business simply was able to shift in to a lower demand class and save a lot more money, a lot quicker.
We find payback periods can be anywhere from 4.5 years to 8 years for the average solar installation, but its worth seeing how this would work with your property with a free Energy Assessment and seeing what our financial partners can offer you for rates on a equipment lease.