When you think of solar power systems, the first benefits that come to mind are generally the “green” benefits and how using solar energy is better for the environment. More than simply the environmental advantages of solar energy, there are also a number of financial benefits businesses who install solar power can enjoy. Let’s explore the top 6 benefits of commercial solar power systems.
Benefits of Commercial Solar Power Systems
The number one benefit of commercial solar power systems are the sizable energy savings. In fact, ask any business owner in South Africa and they will complain that electricity is one of their biggest overheads. The demand for power for most businesses falls between 8am and 5pm, when the demand on the grid is at its highest. When utilizing solar energy, excess energy generated on weekends, public holidays or during annual shutdown will be stored in backup batteries or sent to the electrical grid.
A number of municipalities charge businesses for peak 30 minute power usage, which can be a big financial burden on smaller businesses. A commercial solar power system can reduce the peak consumption charges by up to 50% depending on weather conditions.
Feed In Tariff Savings
When your commercial solar power system generates excess electricity and you do not have backup storage batteries, you have the option to “sell” self-generated electricity back to the grid. Tariff values vary depending on your municipality.
Future Carbon Tax Savings
Carbon Tax is set to take effect in 2022 in order to force South African businesses to lower carbon emissions, as per the Paris Agreement. If your business does not take steps to reduce its carbon footprint, it could face some large penalties in the near future. Renewable energy is a great place to start when becoming carbon-friendly.
Section 12b of the Tax Allowance Act allows you to deduct 100% of the costs of generating solar energy for the first year after installation. This means you are reducing your company’s tax liability for the year of assessment.
Dodging Escalating Electricity Tariffs
Electricity tariffs are set to see massive hikes in 2022, despite a failing and unstable grid. By installing solar panels, you will no longer be fully reliant on the grid and you’ll dodge the exorbitant costs associated with electricity generation.