A Detailed Discussion on Commercialization of Solar Power: An Investment in Future
This blog gives an insight into the process of commercialization of the solar power plant mechanism. Here is the summary:
- Brainstorming topics.
- Thought process before deciding to commercialize.
- What are the major benefits of it
- What are the disadvantages of it
- Comparison of cost-effectiveness
- Futuristic approach with Co-existing technology and sustain thereafter
Commercial solar projects have a large place to exist, from the buildings’ rooftop arrays or ground mounts. The size of the projects can also range widely from kilowatts to megawatts. For example, the data provided by the Director of Solar & Operations at the Community Purchasing Alliance (CPA), Mr. Joe Naroditsky, the Commercial and Industrial (C&I) Solar PV Projects the organization is presently facilitating, are ranging from 50 kilowatts (kW) for small churches, etc. to 300-400 kW for large schools. And these numbers are just peripheral.
In order to decide to empower your business with solar power, one must thoroughly investigate the situation and assess the long-term profit over the potential loss. This investigation comprises the following points:
- Is the change impacting the overall business costs
- Is the plan going to be durable enough
- Does it reduce energy dependency
- What are the tax benefits
- What are the possible financial and environmental returns
After brainstorming on these topics mentioned above, we get a clear idea of how the commercialization of solar impacts society both financially and commercially.
Let us now have a detailed discussion on the points:
Is the change impacting the overall business costs:
The fundamental idea of business is to optimize the overall business costs. Other than labor wages and raw materials the business overhead includes numerous other expenses such as supplies, insurance, property maintenance, utilities, etc. The higher the productivity and maintenance go; the demand for a consistent power supply also rises. As we cannot afford the interruption in power supply, eventually the challenge of reducing the cost of the continual electricity becomes a priority. In such a situation, converting to solar power can reduce an average business electrical overhead by three quarters.
Is the plan going to be durable enough:
It is inevitable that our future generation will be out of fossil fuels and the power supply will be fully dependent on natural resources. Hence choosing the right resource according to the area is the most important if we are switching to solar power. For example, in areas near large water bodies, hydroelectricity becomes the most suitable option. But the over-expansion of production of these hydroelectric plants may cause a flood in the premium lands. Converting to Solar does not only aim to reduce carbon footprint, it also should look upon the conservation of the existing entities.
[Read more: The growing need for cost-effective superpower plants has come up with a solution as Concentrated Solar Power (CSP)]
Does it reduce energy dependency:
The switch to a self-contained solar system will definitely end the dependency on the local power grid. That impacts the overhead costs positively. Mainly the power sensitivity of industries like cold storage, medicine, etc. cannot be overlooked and they need to reduce energy dependency. We need to have a strong backup to have a dedicated consistency in form of the battery system, even if it comes with a cost.
What are the tax benefits:
United States federal government tax relief produced a 26% Federal Investment Tax Credit (ITC). That means, if $10,000 in the solar panel installation, the tax credit is $2,600. However, after 2022 this benefit amount will be decreased to 22% in 2023 and more thereafter.
There are also other federal government programs like Modified Accelerated Cost-Recovery System (MACRS) and Solar Renewable Energy Credits (SRECs) etc. which have different kinds of benefits together.
What are the possible financial and environmental returns:
It is undoubtedly true that the cost of the installation of the solar power system is high, especially in commercialization. But if we consider this as an investment and ensure the strategic development and maintenance of the same, the decision will not only help the business today but also it will come with a guarantee of a flawless financial return for the upcoming years. To add to the attraction – the CO2 offset of a solar system of 105KW is equal to 11,004 trees and 49,522 gallons of natural gas saved in just 3 years. Now it is a “Bingo!” cause of the commercialization of solar power.
Barriers to the plan and their solutions:
As we can clearly see that the main barrier in the plan of commercialization of solar power is cost. Other obstacles that include the contracting challenges, and the mismatch in building and PV financing terms add up to the high transaction costs which again depend on the size of the project.
Now that we know the barriers, let us discuss the solutions:
The basics of cost division are actually dividing the cost across the different levels of the hierarchy. The cost and benefits can be split between the building owners and the tenants to sustain the optimization. These financing structures will also fit the needs of both the parties involved and will make commercialization more cost-competitive with utility energy.
During the tough time of the energy-saving era, the most user-friendly website, the iSolarworld is taking the path of getting the human race to sustain with a possible switch to natural resources. The government is coming up with attractive benefits for the change to happen and we will continue doing our rigorous research on our part and present the current scenario and the best knowledge here. In the near future, iSolarWorld will surely provide the best one-click solutions to those who thrive to save the world’s natural resources. We are always available at – www.isolarworld.com
