Even though, especially in winter, the sun can disappear for days from the northeastern Ohio skies, real estate companies here are finding they can save money by bringing solar electricity to their properties.
AT Progressive Corp. Campus 2 office complex in Mayfield Village, an extensive array of solar panels is saving the company 20% on the electricity bill for the complex, which includes four four-story office buildings and a parking lot. The progressive grid, visible from Interstate 271, consists of 4,186 photovoltaic solar panels covering 8.4 acres. It produces 2.3 gigawatts of electricity per year, equivalent to the energy consumption of about 250 homes.
In the Shaker West professional building on Shaker Boulevard in Cleveland, a much smaller roof system has reduced the number of building owners MAN Holdings LLC25% electricity bill.
“I think a lot of people still mistakenly think that maybe we don’t have enough sun,” said Nicole Stika, vice president of energy services at the Greater Cleveland Partnership. “But it’s really doable here in northeast Ohio.”
GCP assisted MAN Holdings with their move to 11811 Shaker Blvd., helping them find funding for $ 467,000 for the improvement of the 56-year-old building which is expected to reduce the property’s energy use by 42%. While the rooftop solar panel absorbed most of the cost of the upgrades, MAN Holdings also upgraded the building’s insulation and window glazing and switched to LED lighting.
Stika said that about 80% of buildings that GCP performs energy audits on can save money with a solar panel. She recognizes, however, that most companies are not prepared to swallow upfront and financing costs for a return on investment that can take up to a decade to pay off.
âMaybe less than 10% are moving forward right now,â she said. “But they are making it part of their budgets, and now we are seeing more companies than ever before planning solar energy earlier than they have ever been.”
Growth in commercial solar installations slowed by 10% for the 12 months ended September 30, 2021, according to to research sponsored by the Association of Solar Energy Industries. Overall, solar power installations have grown an average of 42% per year since 2000, according to SEIA The data. The pandemic and supply chain issues were behind the decline.
However, many players in the design and installation of solar panels are experiencing growth.
âBusiness these days is really good, it’s improving; we are seeing a lot of interest now, âsaid Al Frasz, director of commercial affairs at YellowLite Inc., a Cleveland-based company that designs and installs solar power systems. âThe economy is working better, the cost (of installing solar panels) has gone down, and the other thing is that the prices of natural gas are going up and the prices of electricity, which remained stable, start to climb again. “
Frasz, who has been in the industry for 13 years, working on more than 300 commercial solar projects, said companies are also responding to the changing environmental concerns they see around them.
âThere is a real revival,â he said. “People are realizing that climate change is real and they are seeing the impact. So at the end of the day, businesses are sensitive to it.”
In an email response to questions, Progressive agreed with this assessment.
âAs stated in his first Corporate sustainability report, Progressive continues to look for ways to reduce its impact on the environment, “the email read.” Progressive is committed to investing in increasingly energy efficient facilities and equipment with the goal of reducing carbon emissions and provide better environmental results. “
The switch to solar is also made easier by a variety of financing programs and tax benefits available to homeowners.
The main one is a federal income tax credit. The solar ITC is currently 26% for projects that start construction by the end of 2022. After that, the credit drops to 22% for projects that start construction in 2023 and to 10% for solar projects. salespeople who start construction after 2023.
To the tax credit is added the value of the capital cost allowance for capital expenditures incurred. Frasz estimates that 50% of the cost of a project can be offset by investment tax credits and depreciation.
The cost of a system, of course, depends on the size of the installation and how it is used. An office building can use 20 kilowatt-hours (kWh) of electricity per square foot per year, while a typical manufacturing plant can use 95 kWh per square foot. Additionally, if a property has an old roof or outdated electrical appliances, it makes sense to switch to LED lighting and renew the roof before installing solar panels on it.
It all adds up, but homeowners can take advantage of programs designed to boost investment in renewable energy. Of particular significance is the federal Property-Rated Clean Energy Loan Program, or PACE. This program allows a homeowner to pay off their energy improvements over a set period of time, up to 20 years, through a property assessment guaranteed by the property and paid in addition to the homeowner’s property tax bills.
Given the complexity of solar projects and the financial complexity, it makes sense for the property owner to get help sorting through the options to determine the best way to structure the financing.
When undertaking energy upgrades to its 49,000 square foot Shaker West building, MAN Holdings turned to GCP’s energy services office. GCP found MAN a PACE program lender to fund $ 467,000 in building upgrades through a PACE loan, as well as $ 10,000 in energy efficiency rebates.
MAN is now considering a similar energy upgrade in a building it bought from Euclid.
Company CEO Amanda Mayan said she thinks this type of environmental upgrade is good for MAN’s business, especially since it has tenants around the world at goal. nonprofit whose donors like their beneficiaries to be aware of the environment.
âI think it’s definitely good for the environment and feels good as a business owner, and I would say it makes moral and economic sense,â she said. “Plus, it’s good for my tenants.”
Jon Kaplan, CEO of Perlevent LLC, a Beachwood installer of solar panels and other energy efficient equipment, sees this environmental awareness in his customers and believes it is an important part of the decisions he considers to be made to install solar panel systems.
“I think the bottom line is you have to want to be sustainable, you have to have the money or at least be able to borrow it, and then you have to be okay with a (long term) return on your investment,” a Kaplan said. “You bring these three things together, it’s a great investment because the cost of electricity goes up.”
As an example of all of these problems coming together, Kaplan said he had a potential customer who was about to sign up several years ago, but decided not to install an array. When he returned in December and pointed out that the prospect’s cost of electricity had increased by 10% since his last visit, the customer’s interest was piqued.