By Tom Mullikin
CAMDEN, S.C. – Ill-informed concerns about solar energy should be laid to rest and American businesses – which have yet to fully embrace the economic and environmental benefits of solar power – should give this limitless source of clean, efficient energy its due.
Every organization from the smallest local business operation to the world’s largest manufacturers and multi-national corporations all share a common need: affordable and reliable power. Solar power provides a cost effective solution for the energy challenges all businesses face, but many businesspeople are not aware of these benefits or have been deterred from exploring solar power options because of outdated and misinformed notions about solar power. Specifically, concerns about the around the clock capabilities and inclement weather performance of solar power persist despite the fact that advances in the industry address these past challenges. Improved technology in storage along with the exponential cost decreases in equipment make solar power a viable option for all energy users. Simply put, solar works.
While solar power offers environmental benefits, arguably the most attractive quality of solar is cost. Solar is now the least-expensive source of energy in 60 countries around the world, and this expense has decreased dramatically: The price of one solar panel per watt, for example, dropped from $101.05 in 1975 to $0.37 in 2017. The cost per watt also decreases as the system size increases, so large corporations with large energy needs will also reap the economic advantages that come with quantity of scale.
Over a hundred companies listed among the Fortune 500 eager invest in solar energy, including Apple, Walmart, and Intel. Any shrewd businessperson or follower of the successful advances and trends of these companies, would do well to recognize the remarkable reliability of solar power as well as the tangible savings, benefits, and overall cost-efficiency that solar power provides their various business-operations, day-in-and-day-out, both in the near term and for decades to come.
Technological advances with solar energy—resulting in dramatic cost-savings—also receive the stamp of approval from government by encouraging us the use of solar power through the investment tax credit (ITC) in the United States. The ITC allows for the reduction of 30 percent of the cost of installing a capital intensive, upfront cost, solar-energy system from the installer’s federal taxes with no cap in the value that can be deducted. The ITC also creates an additional incentive for businesses to invest in solar sooner rather than later, as this 30-percent deduction rate only lasts through 2019 before decreasing to 26 percent in 2020, 22 percent in 2021, and a mere 10 percent from 2022 and beyond.
The economic efficiency of solar energy installation costs dropped more than 70 percent since 2010, with commercial costs falling 58 percent since 2012 and 16 percent in the last year alone.
Companies have taken note, as solar experienced average annual growth of 59 percent in the last decade, and 2.5-gigawatts of solar power were installed in Q1 of 2018, the largest Q1 ever.
Utility-scale solar power continues to be one of the largest drivers of growth in the industry, as 59 percent of all solar installed in 2017 was utility-scale. Utility-scale solar systems expect to account for two-thirds of all solar growth through 2021.
Businesses of all sizes naturally resist uncertainty and volatility of their largest cost of production. For energy intensive industries like steel and aluminum, energy costs are the highest variable costs in their successful operations. Solar power can help alleviate those concerns by enabling businesses to enter a power purchase agreement (PPA) and lock in an electricity price, at a low lost and for a long-term. By contracting for efficient and reliable solar energy, companies eliminate the variability driven by commodities and lock-in long term contracts with solar power for as low as $32 per mwh.
A real-world example of the advantages an investment in solar energy can bring a company may be found in Colorado. Xcel Energy Colorado and EVRAZ Rocky Mountain Steel recently agreed to build a 240-MW solar farm, which could consist of as many as 800,000 solar panels on EVRAZ’s property in Pueblo, Colorado. As part of the agreement, EVRAZ signed a PPA with Xcel that allowed the steel manufacturer to lock in electricity prices at three cents per kwh through 2041. The solar farm will allow Xcel to interrupt EVRAZ’s electricity supply quickly, allowing it to rely on the solar energy system, which Xcel says will lower electricity costs for other customers around Colorado.
While the economic efficiency and cost advantage of solar systems may be the most attractive quality for businesses, solar power offers another potential benefit in the form of increased security and peace-of-mind.
A company with a solar-energy system would reduce dependency on the power grid, and it would thus be insulated from unexpected cyberattacks seeking to interrupt or damage the power grid. While such an attack may seem like a distant possibility, in 2015 three power-distribution centers in Ukraine were hacked and either taken offline or destroyed. Over 230,000 Ukrainian citizens and businesses were left without power for six to eight hours, and researchers believe the attack was an unknown actor’s proof of concept, a trial-run designed to test capabilities. In the event the worst happens, a solar energy system would be able to help mitigate a company’s dependence on the power grid while helping to insulate the company from potential losses.
Sentiment towards solar power is shifting in the global business community, as the ever-decreasing costs and return on investment are simply too beneficial to ignore.
A recent study surveyed 1,000 global businesses about their energy approach, and 250 have already invested in on-site solar with an additional 100 considering the investment.
The study revealed that “energy leaders,” businesses that adopted strategies using energy efficiently and effectively, were more than twice as likely to unlock a competitive advantage from their energy policies. These energy leaders reported strong financial performance, being a leading brand in their market, and attracting and retaining the best talent.
Solar power is a sleeping giant in the American energy industry that seems certain to shed the “sleeping” qualifier as more-and-more businesses wake up to the benefits solar provides. The economic efficiency of a solar system is irrefutable, and more prudent businesses investment in solar energy systems every day.
As utility scale solar expands, we will see a true revolution in energy generation, transmission and distribution with energy-intensive manufacturers positioned to receive the greatest benefit.
– Attorney, military officer, and global expedition leader Thomas S. Mullikin is an expert in environmental sustainability, environmental solutions, and crisis management. Visit him at http://globalecoadventures.org/about-us.php#TomMullikinChairman.