Many businesses choose commercial solar system are largely hoping save electricity bill. And in the long run, they may more concern about the ROI(Rate of investment/ Return on investment). Many people are wary of solar energy installation with its high upfront cost. They want to make sure they`ll get a good return on investment before committing. Therefore, SOLARPARTS here provide a guide to understanding solar energy costs and benefits, so you can get the best ROI from your solar panel installation.
What is return on investment(ROI)?
ROI is the measure of profit from an investment. If you invest $1,000 in the stock market and make $2,500 from the sale of stock, your profit is $1,500 and your ROI is expressed as a percentage: 150%. Home, business, and property improvements are not quite as straightforward. The ROI has to calculate many factors, like the cost of installation, maintenance, repairs, and labor. It also considers market value and energy savings.
Currently, the best short-term home improvement is replacing a garage door at 93.8% ROI. This means the average cost to replace a garage door is $3,907, and it adds a resale value of $3,663. But this average ROI may or may not apply to your home. You may get a lower or higher resale value. Your installation cost may be cheaper or more expensive. Your new garage door may be defective with no warranty, so you have to pay to repair or replace it. Solar energy installation is a long-term investment with a potentially high ROI. Your initial ROI will be low until the system pays for itself. The energy savings and added home value can potentially equal ROIs as high as 200%.
Solar panel installation and tour ROI
The installation cost depends on the company you choose and the solar energy system size. Your roof can be a cost element too. It’s important when maximizing your ROI not to sacrifice quality or cut corners. Because your ROI is long-term, added long-term expenses from shoddy panels or improper installation will negate your short-term savings. To get the best ROI from solar energy installation, you have to consider:
- Installation cost- including labor
- The project size
- Getting the property ready for installation
- Warranties and insurance
- Financing costs
Making the right solar energy choices for your home or business will bring the highest ROI. A solar energy system should be high-quality and properly installed by experienced pros. It should also be tailored to your specific needs and wants.
1: Selecting a solar energy company
Whether you’re shopping for residential or commercial solar, finding a quality solar panel installation company is the same process. There are many factors to look for in a first-rate company:
- Licensing and Certifications such as NABCEP
- Credibility (reviews, ratings, referrals)
- Seller tactics (predatory loans, strong-arming)
- Quality products
- Warranty offers
A good solar energy company checks all of these boxes and doesn’t sacrifice one for the other. A compromise in any of these categories will take a sizable chunk from your ROI. As a reputable solar energy company, SOLARPARTS good-quality solar panels last 25 years with routine maintenance.
2: Solar energy system size
Solar panel system costs are calculated per kilowatt (residential solar panel) or megawatt (commercial solar panel). The size of the system depends on:
- The building or home size
- Its average energy use
- The local climate
- Roof orientation and size
There are ways to optimize these factors for better ROI. Building size is only a small part of solar energy installation and not the most important factor. Two similar size buildings can have very different energy usage, climate, and direct sunlight.
3: Roofing and solar panel installation
Different roof types are more suited to solar panels than others. And adding solar panels can make small roofing problems into big roofing problems. Roofing problems to address before solar panel installation include:
- Structural integrity·Dry rot·Water run-off
- Shingle repair/replacement·Fungi patches and streaks
- Debris build-up (overhanging tree branches, leaves)
A roofing assessment by a professional will be an added cost, but it could save you thousands. So will small repairs and upkeep. If your roof collapses after the solar panel installation, you’ll have expensive roof repairs on top of your solar investment costs. And there will be nothing to show for it except a big hole where your roof, solar panels, and ROI should be. The average cost of big roof repairs is $7,000. The cost of small routine repairs is only $150-$400. It’s a much more lucrative investment for your roof to be in tip-top shape before solar panel installation.
4: Solar energy warranties and insurance
Without a warranty, you’re liable for the costs of defective equipment and parts. Warranties can be through the manufacturer, or the installer, or both. Warranties include coverage for performance, workmanship, and equipment (product/parts). The performance warranty covers solar panel efficiency. If a solar panel output drops below a certain baseline, your warranty will cover it. And Some homeowners insurance can include solar energy system coverage. For commercial solar, commercial property insurance can cover certain items. Your insurance agent should help you determine your solar energy coverage.
5: Solar energy financing
Not everyone can pay the total upfront cost in cash, especially for commercial solar energy systems. A solar loan or solar lease are finance options similar to a car loan or lease. Both options have pros and cons. The trade-off between owning the system or leasing it can affect your ROI, but you have to determine which option is best for your needs.
Overall, maximizing your solar energy ROI is a careful process. Whether it’s commercial solar energy systems or residential, we’ll get you the best return for your investment. SOLARPARTS brings you high-quality service and products that are custom-built for you. To find out more about our resident or commercial solar panel installation, contact us today!
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Email address: Philip@isolarparts.com