Incorporating commercial solar sales into your business can be an advantageous income stream for residential solar businesses looking to diversify their revenue sources. There are many opportunities in this sector as companies, non-profits, and local municipalities look to reduce their energy costs and meet clean energy goals. The Solar Energy Industries Association (SEIA) anticipates an average of 8% growth in this sector over the next 5 years.
While some aspects of the commercial sales process are similar to residential, there are many notable differences that every solar developer and technical salesperson should know. Easily one of the most critical is the impact of local utility tariffs on a solar PV system.
In HeatSpring’s new course, Commercial Electric Tariffs: Impacts on Solar, instructor Matt McNearney draws on his experience developing over 35 MW of solar to walk students through example projects and explain how three different commercial tariffs will influence prospective client’s decision-making process. By the end, students will gain a solid understanding of the significance of local electric tariffs in determining the feasibility and financial analysis of solar PV systems.
One of the first things to consider when starting to work with a potential commercial solar client is their electrical consumption. This is done by reviewing their usage report provided by the utility company. This information is critical to have on hand before diving into the financial aspects of the project.
After assessing the prospective client’s energy consumption, you can take that information to create a preliminary design to meet their energy goals. Applying a cost per watt ($/W) figure to the design along with any eligible tax incentives gets you an estimated project cost for your client.
The next question on a prospective client’s mind after project costs is to know the value of the electricity produced by the system and the timeline for recouping their initial investment. To accurately answer these questions, we must consider the rate structure driving their utility bills.
Tariffs play a significant role in determining the financial feasibility of solar PV systems. Demand charges, one type of tariff, can significantly affect the overall value and payback period of a commercial system. With demand charges, the utility company calculates costs based not just on the amount of energy consumed but also on the peak demand during a specified period. This can lead to higher bills for businesses with fluctuating energy usage patterns.
In the course, students will evaluate three different commercial tariffs – demand charges, straight usage, and time of use – to understand their impact on a PV system’s financial analysis. By navigating through different tariffs and conducting thorough financial analyses, you can help your prospective clients make an informed decision about their solar investment.
Enroll today in Commercial Electric Tariffs: Impacts on Solar if you are newer to commercial solar sales or if you’d like a refresher on this critical topic area!