What is the goal of this structure?
There are many reasons why you want to go solar, whether your goals for going solar are economic, environmental, or personal, one of the most important factors of any solar project is the projected lifetime of a structure. This can alter investment predictions, as well as system ROI and project savings.
Structure Lifetime and Protecting against fluctuating energy Costs
One of the main reasons why people go solar is to protect themselves against rising utility prices. Solar allows you to produce your energy, so this takes away the fear of raising and fluctuating energy prices. Conventional energy costs have been rising at a rate of around 5% per year. The conventional energy prices are expected to rise even more in the future. Conventional energy prices, with their dependence on fossil fuels, are subject to the volatility of those markets, as well as any future costs of environmental remediation or carbon emissions penalties.
When considering the quality of a solar support structure, it might not seem like this may come into play, however, when projecting fixed rates for solar compared to volatile conventional energy rates over the lifetime of a structure it becomes apparent that structure lifetime is a key component. Your savings with solar can depend on how much energy the system produces, how much is consumed, and a comparison of the rates you would pay compared to utility rates. If the electricity rates are high in your area, you will save even more, as electricity prices continue to increase you will continue to save more over a 25-plus year lifespan due to your solar system compared to a fixed solar payment. Would you rather be subjected to the volatile prices of conventional energy in 15 years or 25+ years?
Eliminate Electricity Bills
Another reason why people are going solar is to eliminate their electric bills. If this is one of your goals, then it is important to consider structure lifetime. By utilizing a structure with a longer projected lifetime you can effectively, and securely eliminate utility bills for a longer period. A PV module will generate power for 15-25+ years. The structure lifetime should at least match or exceed, the PV module lifetime to maximize the return.
Earn a Return on your Investment
In many ways, a solar system is a financial product that can generate annual returns ranging from 10 percent to over 30 percent. Some factors that impact your solar ROI are electricity rates, finance incentives, solar renewable energy certificates, cost, associated technologies, property characteristics, property value, and value-added benefits to businesses. When considering these factors, you can gather an understanding of what your solar payback period may be. Solar panel payback is the time it takes you to earn back the money that was spent upfront on the system. If you want to calculate your annual returns, divide the financial benefits received by the initial investment. Additionally, you can calculate savings, or even decrease the risk associated with a solar structure by factoring its projected lifetime. By using a structure with a longer projected lifetime you can increase ROI, decrease risk, and increase savings.
While it is no secret that the two major selling points of going solar are saving on utility and reducing your carbon footprint. Businesses and homeowners have continued to go solar to minimize environmental issues such as climate change. Solar reduces greenhouse gas emissions because the electricity that solar generates is emission-free. Buildings are responsible for 38 percent of carbon emission in the United States, by going solar, it will significantly decrease that number. Regardless of the reason why you are going solar, you are helping to preserve the environment and encouraging global sustainability. By installing a solar system that lasts longer, you are limiting your carbon footprint for an increased duration. Using a structure with a longer lifetime is more sustainable as well, simply because it lasts longer.
Increase Property Value
Many homeowners and businesses have installed solar to increase their property value. Solar panels can boost your home value by 20 dollars for every 1-dollar reduction of the utility bill. Statistics show homes that are ready to move in with solar sell around $14,329 more than a home without solar. Businesses can also increase value by installing solar. When owning a building, tenants’ benefit by a reduction in their electric bills, this is an incentive for them to stay, and pay the increased rent. When properties have solar, they are more attractive to buyers due to the lower energy bills, which often leads to faster purchase cycles. Solar leases can also be transferred over to the new owners. Many other benefits have an indirect value-added impact on property values, including associated environmental awareness, social responsibility, progressive thinking, and shade. Going solar improves their public image commercial solar grants the benefit of going green.
What is the projected lifetime of this structure?
Structure lifetime is dependent on materials used in the structure’s fabrication. Structures with longer lifetimes use structural steel members compared to roll-formed steel members. An example of this can be seen in the differentiation between Tier 1 and 2 structures. The structural steel used in Tier 1 structures is more durable, allowing Tier 1 structures to withstand increased weather conditions and reducing warpage. While a Tier 2 structure is also steel, this steel is often light-gauge sheet metal, roll-formed into purlins and columns, leading to a structure more susceptible to corrosion and flexing, resulting with damage to the structure, which causes the structure to fail at an increased rate and decreasing the structure lifetime.
If you want to learn more about the factors that determine whether it is tier 1 or tier 2, check out our blog post, “Everything you need to know about tier 1 and tier 2 structures, and how they affect your project.”
Typically, a projected lifetime is provided by the manufacturer. If it is not one can get an idea of the projected lifetime by looking at the materials used. If structural steel is used 20 years is a good starting point. If cold-rolled members are the primary method of construction, then the projected lifetime will most likely be no more than 15 years.
Structure lifetime and financing
When financing your structure, it is important to consider all your options. While some options are better for specific projects, you can determine which one best fits your needs. Many business owners prefer to either finance with a bank, pay for the solar structure upfront, or utilize a power purchase agreement. Many people think leasing is the best financial option when it comes to solar, but you save more money when your finance with the bank. When you finance with the bank once you have paid off your solar structure, it belongs to you whereas if you were to lease it, you would never own it. Financing also allows you to qualify for the Federal Solar Investment Tax credit (ITC). The ITC helps you save 26% on the cost of your solar system by granting you a tax credit. Financing with a bank allows you to have a predictable monthly payment with no upfront cost when your first purchase your structure. If you want to learn more about ITC and see if you qualify to apply, check out our blog post.
A Power Purchase Agreement (PPA), is another option used to avoid paying a high upfront cost. A PPA is similar to solar leases, but you do not have to pay a fixed amount each month like a solar lease, you pay for whatever your solar system generates. Since you do not own this solar system, the solar installer becomes your new utility company and will charge you for the energy produced by your solar system. To avoid these option you could pay for the solar structure upfront. The main benefit of paying upfront is that the solar system belongs to you, you also get tax incentives, you take maximum advantages of inflation, and you have no recurring bills. Over time your power bill savings will increase due to conventional energy prices increasing.
If you want to learn more about solar structure financing, check out this blog by The Solar Nerd. This blog has a complete guide on how to pay for solar.
Regardless of how you pay for the system, structure lifetime effects all of these options. At the end of the day, however, a higher quality structure, with a longer lifetime will always increase ROI and benefit your investment.
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