Renewable energy solutions have often been criticized by detractors as being too expensive, regarding both switching and operation costs. In an ideal world, no price would be too great to put on the preservation of our environment, but unfortunately, we don’t live in that world. Even in this world, switching to renewable energy sources like solar and wind can not only significantly improve our environmental outlook, but our financial one as well. That potential savings applies to us as individuals as well as larger societies and governments.
Our Prehistoric Present
A new report from The Carbon Tracker Initiative claims that 42 percent of global coal capacity is currently unprofitable, and the U.S. could save $78 billion by closing coal-fired power plants in line with the Paris Climate Accord’s climate goals. It further posit that new wind and solar will be cheaper than 96 percent of existing coal power by 2030. While coal is only one of the current fossil fuel-based energy sources that powers most countries, it’s worth noting the cost comparison between renewables and current methods on a large scale.
A Greener Future
For individual property owners and businesses, however, the savings are still a huge factor to consider when evaluating the switch to a renewable energy system. For many, the personal desire to offset their own carbon footprint and do their part for the environment is worth paying a little extra, but many won’t have to. In general, the cost of renewable energy equipment has significantly decreased over the last several years, and it may not be as expensive now as you think. In fact, there are even programs that allow homeowners to receive a solar power system at zero cost, and only pay for the low-cost green energy that the system produces, which I will elaborate on in my next point.
If you elect to purchase equipment outright, it’s true that the true savings takes time to see. There is an upfront investment associated with switching to clean energy, but those systems will pay for themselves within as quickly as a few years, especially if you take advantage of all the other incentives available.
For instance, for residential properties, the federal government offers a 30 percent tax credit on solar panel, geothermal and wind turbine equipment and installation costs for residential properties, though those same credits do not extend to rental properties and of course, you must have paid that much into taxes to receive the credit. Individual states also offer personal tax credits and incentives for renewables and efficiency. You can find out what your state’s policies and incentives were made available by the North Carolina Clean Energy Technology Center.
Picking the Right Solution
Residents have a couple options for taking advantage of clean energy savings:
- A Power Purchase Agreement allows property owners to receive equipment and installation from a solar provider, while only paying the provider for the energy that the system produces, but at a lower rate than their utility charges. The system is designed based on the previous year’s usage patterns and the user’s preferences and can save anywhere between 25 and 50 percent of traditional energy costs.
- For example, in California, residents typically pay $0.30 per kilowatt hour and a Clean Energy Solutions solar panel program can cut it down to $0.16. (Almost 50 percent)That savings is calculated based on the offset of electricity cost based on usage.
- Residents can also buy their own system if they have enough upfront capital to do so. A solar panel system typically costs around $15,000 to $25,000, though there are often loans and utility incentive programs available to help reduce that out of pocket cost. Owning the system means the user does not have to pay any utility for usage, and it can pay for itself by offsetting energy costs within four to six years.
Businesses Benefit Too
Clean energy systems are also great for businesses to help reduce operating costs, though there are certain kinds of businesses that are more suited for switching than others. Typically, businesses that don’t run high energy bills or operate out of buildings without ample space for renewable energy systems won’t see as much of a return on that investment. But, businesses with large electrical equipment sometimes see monthly electric bills in the thousands, and other types of businesses that require special equipment may also be able to save by switching to a renewable system.
For instance, any business that requires temperature control storage —such as restaurants, refrigerated warehouses and consumer packaged goods facilities—are great candidates for a green energy system. Between electricity usage and demand charges, those businesses can see costs of several thousand dollars per month. A solar panel system could reduce that bill by 15-20 percent. Most small to mid-size businesses with refrigeration equipment see savings of between $3,000 and $4,000 per month.
Businesses also receive tax and utility credits for switching outdated systems to newer, cleaner solutions. Not to mention the good PR that comes from making green practices a priority. Building a reputation as an environmentally conscious company can also pay big dividends by attracting new customers. In fact, a 2015 report from Nielsen found that 66 percent of consumers from all over the globe were willing to pay more for goods from green companies, a number which had jumped from 55 percent the previous year. That percentage was even higher for Millennials, 73 percent of whom were willing to pay more for sustainable products, up from 50 percent in 2014.
There are also small-business loans specifically designed to help companies with the upfront costs involved in that switch. For example, an SBA 504 Green Loan can offer up to $5.5 million in SBA/CDC financing when used to purchase, build, convert or expand a building that meets one of the following criteria:
- Reduces company energy consumption by at least 10% (e.g. solar, efficient lighting, improved insulation).
- Produces renewable energy such as wind, solar, biomass, hydropower, geothermal.
No matter your opinions on climate change, everyone can agree that even small changes can make a big impact, and that’s true for your wallet as well. If you have a home or business, you should consider switching to a clean energy solution to not only be part of a trend toward individual environmental action, but also to see a significant savings on your energy costs.