Does Solar Energy Make Financial Sense?
- Going green has become a necessary step for companies of all sizes in the current business environment and this is only going to increase in importance as consumers become more aware of a business’ carbon footprint.
- While this has impacted the way businesses handle the materials used in an office and waste, the current dilemma is how companies source energy.
- Sustainable, environmentally friendly, sustainable, and clean energy is the next green initiative that will impact how a business performs and how it is viewed.
- The biggest form of this energy is solar power.
- While solar power is being used in residential or at mass farm scales, solar power for business is a hot button topic amongst companies in India at the moment.
- Let’s take a look at if this solar power works for business and the metrics behind it.
1. The Economics of Solar Power
Before we discuss solar power as an investment for businesses, it is essential to look at the economic realities of a business and see if it fits. So, does the economics of solar power work for business?
- For commercial entities that own their own real estate, the answer becomes an emphatic yes.
- The biggest financing issue that solar power reduces is electricity expenditure.
- It is estimated that a business with solar power has an 89% reduction in their power bills.
- This is great for long term recurrent expenditure.
- The downside is that in the short term, the expenditure on infrastructure is considerably more than opting for government power.
- This has changed along the years though, as panel prices in India have gone down from INR 20 lakh to INR 5 lakh for a 15watt system with 8-hour battery power reserves.
Add to this the likely reduction of price due to your state’s solar subsidy and the prices can become an extremely cost-effective energy-saving option. Along with attractive EMI options, major solar brands make the infrastructure cost a more affordable option.
Another point in favour of solar power for commercial entities is that most states in India offer to buy the excess power generated by solar panels. This creates soft revenue that can add up to major capital stacked over years.
2. Sustainable Power
Another major factor when looking at the viability of solar power in the workplace is consistent electrical feed. In a country like India, which is subject to frequent power outages, the need for backup is eliminated by the use of solar power. This is a fact that is easy to overlook but it is estimated that over 50% of businesses lose revenue due to power outages or delivery delays.
The elimination of power outages which improves the sustainable and consistent availability of electricity at an affordable rate can increase work productivity. This particular problem applies across industries like IT, medicine, and even cafes and restaurants.
Another problem that solar power helps address is the availability of sustained voltage which creates a safe-haven for numerous electronic devices. The alternative used in the country is the installation of a power stabiliser. Without this, fluctuations in electrical supply could damage expensive electronic infrastructure that is essential to businesses.
3. Green Marketability
As the energy market moves towards environmental sustainability, initiatives like solar power for businesses gain major traction with consumers. This is due to increased awareness and education about climate change. It gives market manoeuvrability to businesses that have a stronger ethical base.
Solar power is clean, good for the environment, and generates organic interest with educated and aware consumers. While this may seem to be small leverage over competitors, solar power can be used as a way of creating an eco-conscious brand for a company.
4. Low-light Solar Technology
A huge drawback when solar power was introduced was the dependence on the strength of the sunlight. In the past few years, this aspect has been effectively eliminated with low UV technology that takes advantage of low-light. This plays a huge role in the ability of a company to maintain solar sustainability in all climates.
This technology is used on most solar panels and draws energy from light rather than heat. So, while more sunlight means more energy, the efficiency of the technology ensures that business needs are met even under extremely low-lit days.
5. Uninterrupted Supply of Power
With the evolution in battery technology and the improved storage capabilities of the solar energy generated, businesses can be assured of electric supply through the year, during the day and at night. This technology has come a long way and continues to see many breakthroughs. In fact, the capability of storage available to large enterprises is curated to a business’ needs, this means the storage of batteries is not limited to 10kw as it was in 2010.
With energy independence and security, you and your business are no longer beholden to external vagrancies. Solar power is a renewable source of energy which is easy to maintain while also meeting all the needs of a business at the fraction of the cost.
6. CSR Benefits
Solar power’s benefits on a business aren’t strictly in marketing or energy, it also has a carbon footprint reducing effect. This means that your company can pride itself on being more than environmentally conscious, it would be actively helping combat global climate change.
This is a soft effect that has less ROI but can be extremely beneficial if and probably when energy regulatory laws also go green. The protection of the environment also is a huge CSR boost, companies often have reforesting initiatives, lake clean-ups, and other CSR activities that take manpower and time.
With solar energy, you can meet those CSR goals while continuing to stick to your business activities. Additionally, installing solar panels also ensures CSR activities can be less expensive and be centred around solar energy awareness. Some activities that can be used for CSR benefits with solar power include:
1. Awareness campaigns for clean energy .
2. In-office conferences on going green.
3. Increased clean energy engagement from employees including installing solar panels at their houses.
All these count as CSR initiatives as they play a role in creating sustainable energy for social development.
- Solar power is a viable option for businesses that have their real-estate.
- It is a self-sufficient, technologically driven source of energy that protects businesses from most external power interruptions.
- It also provides soft revenue to businesses, has numerous incentives to be set up, and is offered by companies through numerous instalment plans.
- This makes setting the infrastructure affordable as well.
- Furthermore, the savings generated from year 1 onwards is immense both in terms of recurrent expenditure and in terms of real-estate value.
- Additionally, the infrastructure, which could have been more expensive in set-up saves money when you consider the auxiliary equipment like stabilisers, UPS, and generators required for other power options in India.
- In short, it is not as expensive, saves electricity, generates soft revenue, and improves marketability while also reducing the company carbon footprint.
- When you consider those benefits, as well as other government, introduced incentives such as tax breaks and power buy-back options, commercial solar power in India is not only viable but is also extremely beneficial.
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