Solar panels can be a great investment opportunity for businesses. However, knowing where to begin can be challenging. That is why we put together the ultimate checklist for businesses that are considering solar.
Site feasibility
- Complete a feasibility analysis to confirm that your site is suitable for a solar installation. Reference our blog post on selecting the right location for a solar installation.
- Review local municipal ordinances to confirm that solar use is permitted in your zoning district.
Economic feasibility
- Collect and analyze your previous 12 months of electric bills.
- Review the organization’s energy supply contract if applicable.
- Confirm that the contract does not restrict your use of on-site renewable energy.
- Consider the term of the contract to ensure that a solar installation will not trigger a termination penalty.
- Calculate your avoided rate of electricity. Reference our blog post for a step-by-step guide to calculating your savings with solar.
- Evaluate options for funding the solar installation: Third-party funding or direct purchase.
- Determine which approach is appropriate for your organization. Refer to our blog post on the various solar funding options available to you.
Select a Developer or Installer
- Understand your internal purchasing process requirements to determine if a Request for Proposal (RFP) process is required.
- Standardize your proposal requirements to aid with evaluations. A few suggestions are provided below:
- Utility rate escalator: Typically, 2% to 3%. We suggest 2%.
- Term of third-party agreement or contract: Typically, 25 to 30 years.
- Escalator of third-party agreements: Typically, 1% to 3%. We suggest 1%.
- For direct purchase vendors should use 20% commercial tax rate to calculate accelerated depreciation (MARSCS) credit.
- Discount rate to be used in NPV calculations: Typically, 5%-10%. We suggest 7%.
Going solar can be an exciting and challenging adventure. We hope this checklist will help you and your team go through the process better prepared and more engaged.
Alternatively, we offer a free solar feasibility analysis to all qualifying organizations. If you would like to use this free service, contact us. One of our project consultants will be in touch.