Solar for Business: Manufacturing

Solar power is a reliable and safe form of energy generation that can greatly reduce the operating costs of businesses, especially energy-intensive ones. By deploying solar energy, companies can control their energy costs and protect against future price volatility. Manufacturing companies make especially strong candidates for solar because of the high energy demand at their facilities.

Solar Incentives for Manufacturing Companies

The manufacturing industry accounts for almost one-third of energy use in the U.S., consuming an average of 95kWh per square foot of facility annually (MGE). Since these facilities rely so heavily on the grid for energy, they are particularly vulnerable to surge charges when utility rates increase.Solar installations can help meet a significant amount of this power demand, dramatically decreasing electricity prices and a company’s reliance on the public power grid. On top of the competitive costs of solar energy, the effective price is further reduced by government incentives, including tax breaks. One of the most notable incentives is the federal Solar Investment Tax Credit (ITC), which allows companies to deduct up to 30% of the cost of a solar installation from their federal tax liability and offset a significant portion of the upfront project cost (SEIA). Note that while the solar ITC is set to start decreasing in 2020, there are still ways to maximize the current rate of 30% for some time (see our blog on the ITC step-down).While the ITC helps reduce the upfront cost, converting a manufacturing facility to solar power more than pays for itself over the long-term. Commercial-grade solar installations have lifespans of 25+ years, and after the quick payback period, the solar system will produce fuel-free energy for years to come.

Manufacturing Companies Are Realizing the Benefits of Solar

Beyond the favorable solar project economics for manufacturing companies, additional physical attributes make them ideal candidates for on-site solar. Manufacturing plants and facilities typically have vast areas of unused space in direct sunlight that can be outfitted with solar panels; extensive roof space, large parking lots or unused fields (including brownfields) can become productive assets for companies.Many manufacturers have been taking note of the cost-effectiveness and reliability of solar. For example, PowerFlex partnered with Dimension Fabricators Inc., a New York-based steel producer. They installed a 945kW solar system on the roof of their main building in Glenville, NY (see video here). The solar installation supplies the facility with 99% of its annual electricity requirements and reduces its carbon dioxide emissions by 733 metric tons. Dimension Fabricators also utilized the NY-Sun incentive program for even greater cost savings.Another example of a manufacturing company realizing the benefits of solar is Neoperl, a German plumbing manufacturer. They installed a 450kW solar system on the roof of their U.S. headquarters in Waterbury, CT (see video here). The solar installation offsets 62% of the building’s annual electricity consumption and reduces Neoperl’s carbon footprint by 215 metric tons of carbon dioxide per year. On top of the solar ITC, Neoperl was eligible for Connecticut’s Zero-Emission Renewable Energy Credit (ZREC) program, which made the transition to solar even more lucrative for the company.Solar energy is an ideal solution for manufacturing businesses that want to reduce their energy costs while benefiting the environment. There are many available federal and state tax incentives that make solar project economics even more financially compelling. If your company has energy-intensive operations, now is an ideal time to consider making the switch to solar. Contact PowerFlex today at 888-225-0270 or info@entersolar.com to get started on a solar system tailor-made for your company.