Solbright - Bright Energy Opportunities Daily
A Partnership with Baker Roofing Company
Initiative: Capital Preservation
Current federal and state tax credits/grants and depreciation allowances create an excellent opportunity for income positive entities to effectively preserve capital via investment in renewable energy. Key components include the Federal (30% of installed cost), state (state dependent, but up to 35%), MACRS depreciation (5 year accelerated), 2009 Bonus depreciation (50% of installed value) and expanded Section 179 depreciation ($250K for 2009). The combination of these programs can enable a business entity to procure a renewable energy system and effectively reduce their tax burden by an amount in excess of 70% of the system costs within the first year . Financing the renewable energy system can provide a more immediate impact on capital preservation by reducing initial cash outlays (to zero) and simultaneously reducing income tax obligations. The preserved capital can then be reinvested by the owner and/or used for other operating requirements. For example, in the state of GA, if you had a $400K tax liability and you invested in a 50kW solar PV system at $8/watt installed, you would have an upfront cost of $400K. With 30% ($120K) federal and 35% ($140K) state tax credits, 50% bonus depreciation (on post credit value = $70K) and Section 179 expense ($70K), the effective first year tax benefit would be $316K. By financing the system, this $316K would be preserved within the company and the net tax bill would be $84K.
Initiative: Enhnaced Efficiency
YOUR ROOFTOP AND SOLAR ENERGYInvestment in rooftop solar power for your commercial building requires prudent planning with respect to the life cycle of the structure’s roof. Solar assets have a typical life span in excess of 20 years. Ensuring that these two independent assets are in parallel with respect to their useful life is advantageous. SolBright offers solution-specific programs to extend the life of your existing roof, perform re-roofing services as well as perform a solar installation with a planned, future re-roofing schedule in mind. SolBright’s partnership with Baker Roofing Company enables it to deliver highest quality roofing assessments, preparations and installations in conjunction with a rooftop solar installation. SolBright offers an industry unique single-point-of-contact for facilities managers to address both roofing and solar service and warranty related requirements. Client energy conservation can be further enhanced with low cost, cool-roof membrane technologies – thus further enhancing your ROI. Currently, Federal and most State investment tax credits allow for solar related roofing materials and labor expenses to qualify for these programs.
YOUR ROOFTOP AND SOLAR ENERGY
Investment in rooftop solar power for your commercial building requires prudent planning with respect to the life cycle of the structure’s roof. Solar assets have a typical life span in excess of 20 years. Ensuring that these two independent assets are in parallel with respect to their useful life is advantageous. SolBright offers solution-specific programs to extend the life of your existing roof, perform re-roofing services as well as perform a solar installation with a planned, future re-roofing schedule in mind. SolBright’s partnership with Baker Roofing Company enables it to deliver highest quality roofing assessments, preparations and installations in conjunction with a rooftop solar installation. SolBright offers an industry unique single-point-of-contact for facilities managers to address both roofing and solar service and warranty related requirements. Client energy conservation can be further enhanced with low cost, cool-roof membrane technologies – thus further enhancing your ROI. Currently, Federal and most State investment tax credits allow for solar related roofing materials and labor expenses to qualify for these programs.
Initiative: Electricity Expense Reduction
Solar power generation and solar thermal hot water heating are two distinct ways to reduce a facility’s demand for grid-distributed power. Less power pulled from the grid equals a lower monthly power bill for the customer. Solar assets enable production of one’s own energy – and related consumption – directly at the site. One should typically associate solar PV and solar thermal assets as a means to offset typical demand. Offset amounts will range according to the size of the system selected, but the order of 30%-80% is common. Only in rare cases will one completely become independent of a connection to the grid. The advantage of using solar energy is particularly beneficial (from an expense savings perspective) during peak usage periods. These periods tend to be during business operations hours with highest load/energy requirements during the 10 AM – 5 PM period when HVAC systems are busiest cooling/heating facilities. In many markets, such peak demand periods are subject to variable pricing (i.e. higher demands on the grid generate a higher price per watt of energy for the customer). Solar’s value in expense offset can be significantly compounded in situations where variable pricing is applicable. In the event that more power is being produced by the solar system than can be immediately used by the facility, net-metering options exists in many states that allow for excess power to be returned to the grid and essentially the meter will ‘run backwards’ providing a credit to the facility for power returned to the grid.
Solar power generation and solar thermal hot water heating are two distinct ways to reduce a facility’s demand for grid-distributed power. Less power pulled from the grid equals a lower monthly power bill for the customer. Solar assets enable production of one’s own energy – and related consumption – directly at the site. One should typically associate solar PV and solar thermal assets as a means to offset typical demand. Offset amounts will range according to the size of the system selected, but the order of 30%-80% is common. Only in rare cases will one completely become independent of a connection to the grid. The advantage of using solar energy is particularly beneficial (from an expense savings perspective) during peak usage periods. These periods tend to be during business operations hours with highest load/energy requirements during the 10 AM – 5 PM period when HVAC systems are busiest cooling/heating facilities. In many markets, such peak demand periods are subject to variable pricing (i.e. higher demands on the grid generate a higher price per watt of energy for the customer). Solar’s value in expense offset can be significantly compounded in situations where variable pricing is applicable.
In the event that more power is being produced by the solar system than can be immediately used by the facility, net-metering options exists in many states that allow for excess power to be returned to the grid and essentially the meter will ‘run backwards’ providing a credit to the facility for power returned to the grid.
Initiative: Income Generation
Solar power generation represents an opportunity to generate real income through one or more means of returning generated power to the grid-distribution system. Options for net-metering, power purchase agreements, Renewable Energy Certificates, green power production credits, etc. vary from state to state. Independently or combined they can provide an excellent financial return on the investment. Power moved onto the grid from net-metering is typically paid for at the same rate (less transmission cost components) it is purchased for when drawn off of the grid. Direct metering involves the complete/100% sale of all power generated by solar PV. Many power companies offer premium pricing to encourage adoption of solar in their markets as well as to meet state/federal mandates for clean energy production. Premiums can range from 1.5x to upwards of 5x of the going commercial rates. Renewable Energy Certificates (RECs) are not available in all markets. There is much uncertainty in their long term value due to pending legislation on carbon offset initiatives. RECs are based upon the amount of clean energy produced and represent a marketable asset that can be sold in a secondary market to third parties in effort to help them meet their independently set – or federally set – carbon footprint offsets. Production incentives provide cash payments based on the number of kilowatt-hours (kWh) a renewable energy system generates. These incentives are in addition to net-metering and/or direct metering payments.
Objective:
