Alternative energy investments make more sense economically for commercial projects because of extra tax incentives and a more favorable ratio of energy produced per dollar invested.
In addition to local utility incentives, which can be quite generous on a large project, there are state grants and rebates.
Also, federal benefits expand with a 30% investment tax credit (solar only) and MACRS accelerated depreciation of five years on solar, seven on wind.
This can make particularly efficient renewable applications, like solar hot water, a very good investment, with net payback between five and ten years.
SOLAR
Commercial Solar Thermal Systems — – Cost: $120 per square foot of collector
The biggest bang for the buck in renewable energy. Solid, reliable technology, easily installed. Must have need for hot water to maximize but produces four times the energy as solar electric. Energy Concepts’ Solcom Brochure has more details.
Commercial Solar Electric Systems — – Cost: @ $9,500 a kW
The larger the installation, the lower the per kW cost. 100 kW systems come down to $9,000 a kW. Highly reliable, little to no maintenance, great use for large flat roofs.
WIND
Commercial Wind Systems — – Cost: 100 kW=$450,000, 1 mW=$2,000,000
High value return on investment in terms of energy produced. Technology is reliable and proven. Great incentives in most situations. These are massive pieces of equipment requiring highly professional installation and integral cooperation with local utilities.
INCENTIVES AND GRANTS
Local: Some utilities provide grants for large solar and/or wind systems, though it is mostly the Power Purchase Agreement—the energy buy-back rate—which benefits the commercial investor on large-scale projects.
State: Both Wisconsin and Minnesota have programs supporting large-scale renewable systems. Most commercial projects involve considerable cooperation and collaboration with state officials before getting off the drawing board.
Federal: Tax credits include a 30% investment tax credit (solar only) and MACRS depreciation of five years on solar and seven on wind. These generous tax credits are currently supporting alternative energy investment around the country but can become political footballs during their renewal process to the frustration of everyone.
Carbon Credits: Not readily recognized yet, but the potential value of selling carbon offsets under a “cap and trade” system is substantial, especially with large, on-going net energy producers like commercial turbines.
Sample Project Worksheet for Commercial Solar Thermal:
Actual 1080 square foot, drain back solar thermal project for a Wisconsin area manufacturing plant.
Initial Investment: $115,000
State Rebate: $17,000 (Wisconsin Focus on Energy Grant)
Fed Tax Credit: $34,500 (investment tax credit of 30%)
Depreciation: $40,000 (over five years)
Energy Saved: 2132 therms annually
Carbon Reduction: 12.5 tons annually
Total payback time: @ 8-9 years
Possible carbon offset value under “cap and trade” arrangement could reduce payback time even further.
