Hey Florida business owners!
Ever wondered if solar energy for businesses in Florida is worth the investment? You’re not alone. Many of our clients at GenXC Renovations have asked the same question. The good news? Calculating the return on investment (ROI) for a solar system is easier than you might think. In this article, I’m going to walk you through a simple, five-step process to help you figure it out. Whether you’re running a trendy boutique in Miami or managing a manufacturing plant in Tampa, this guide will help you make a well-informed decision.
Step 1: Determine Your Current Energy Costs
Before diving into the solar energy for businesses in Florida world, you need to know what you’re currently spending on energy.
Why is this important? Understanding your current energy costs gives you a baseline to compare potential savings with solar power. It’s like trying to lose weight – you need to know your starting weight to track your progress!
How do you do it? Pull out your electricity bills from the past year. Look for the “Total Amount Due” on each bill and jot it down. Then, calculate your average monthly cost. Don’t forget to consider seasonal variations – Florida’s summer heat can crank up those A/C costs! For instance, if your average monthly bill is $2,000 during cooler months but jumps to $3,500 during summer, your annual energy cost might average around $30,000.
Personal Tip: When we first evaluated solar energy for our office in Florida, we were shocked to see how much our summer energy bills spiked compared to winter. This motivated us to look more seriously into solar savings.
Step 2: Estimate Your Solar System Size
Next up, you’ll want to estimate the size of the solar system you need for your business in Florida.
Why is this important? The size of your system determines how much energy you can produce and save.
How do you do it?You can use online solar calculators or consult with a solar provider to get an estimate. Generally, this is based on your energy consumption and the amount of sunlight your location receives. For example, Florida averages about 5.5 peak sun hours per day. If your business uses 20,000 kWh annually, you’d need about a 12 kW system.
Step 3: Calculate the Installation Costs
Now, let’s talk money – specifically, how much it will cost to install your solar system for your Florida business.
Why is this important? Knowing the installation costs upfront helps you understand the initial investment needed.
How do you do it? Get quotes from at least three certified solar installers. Prices can vary, so it’s good to compare. As of 2024, the average cost of solar in Florida is about $2.70 per watt, making a 12 kW system around $32,400 before incentives. Make sure to ask about the quality of the equipment and the warranty included.
Personal Tip: We once had a business owner in Jacksonville tell us they received a quote that seemed too good to be true. Turns out, it was! They almost ended up with outdated panels and a minimal warranty. Always check what you’re paying for.
Step 4: Explore Incentives and Financing Options
Solar can be more affordable than you think, thanks to various incentives and financing options, especially for businesses in Florida.
Why is this important? Incentives can significantly reduce your upfront costs, making solar more accessible.
How do you do it? Look into the Federal Investment Tax Credit (ITC), which allows you to deduct 30% of your solar installation costs from your federal taxes. For a $32,400 system, this could mean a credit of $9,720, lowering your effective cost to $22,680. Read more about the ITC here.
Florida also offers property tax exemptions for renewable energy systems, which means your solar installation won’t increase your property taxes. Learn about Florida’s Property Tax Exemption.
Additionally, many solar companies offer financing plans, such as solar loans or leases, to spread out the cost. Explore financing options.
Step 5: Calculate Your ROI
Finally, it’s time to calculate your ROI and see how soon your investment will pay off for your business in Florida.
Why is this important? Your ROI helps you understand how long it will take for your savings to cover the initial costs and how profitable your investment will be in the long run.
How do you do it?
1. Determine your annual savings: Multiply your average monthly savings by 12. If your solar system saves you $2,000 per month, that’s $24,000 annually.
2. Subtract any annual maintenance costs: Maintenance costs are generally low but assume about $500 per year for cleaning and inspections.
3. Calculate your net savings: $24,000 (savings) – $500 (maintenance) = $23,500.
4. Divide the net savings by your total initial investment: $23,500 / $22,680 = 1.036.
5. Multiply by 100 to get your ROI percentage: 1.036 x 100 = 103.6%.
For example, if your solar system saves you $24,000 annually and cost $22,680 to install after incentives, your ROI would be approximately 104%. This means you’d recoup your investment in just about one year!
Personal Tip: Our office achieved an ROI of 25% within four years. It’s a great feeling when you start seeing those energy savings translate into actual financial returns!
In conclusion...
To recap, here’s your roadmap to calculating your solar ROI in five easy steps:
1. Determine your current energy costs.
2. Estimate your solar system size.
3. Calculate the installation costs.
4. Explore incentives and financing options.
5. Calculate your ROI.
Ready to start saving? At GenXC Renovations, we’re here to help you every step of the way. Contact us today for a personalized consultation and take the first step towards a greener, more cost-effective energy solution for your business.
Got questions or want to share your solar journey? Leave us your contact information in the form below and we’ll get back to you.
