The Sun Is Up and Costs Are Down: Using Solar Technology for Your Business

As the cost of solar energy has declined dramatically over the past several years, usage has skyrocketed. According to the Solar Energy Industries Association, U.S. solar use has grown at a 42% annual rate over the last 10 years, and nationwide solar capacity is sufficient for nearly 19 million homes. Even more strikingly, solar energy now accounts for 43% of newly installed electric capacity in the United States in 2020 and for 4% of the country’s electricity generation (the latter figure was just 0.1% in 2010). Solar’s prominence as an energy source keeps growing, and many businesses would be well advised to consider implementing it if they have not done so already.

Needless to say, this boom in solar energy is great news for the fight against climate change. According to solar industry service provider GreenLancer, the price of residential solar has declined more than 64% since 2010, making solar installations for homes far more appealing than in the recent past. The appeal of large-scale solar has grown quickly as well, as evidenced by utility-scale solar power’s growth from just under 1,000 Megawatts of Direct Current (MWdc) nationwide in 2010 to nearly 70,000 MWdc in 2021. As adoption by both building owners and utilities rises, firms ranging from telecommunication providers to automobile manufacturers have growing opportunities to leverage solar resources in their journey to reaching net zero greenhouse gas emissions. Climate change is creating an increasing level of instability and downside risk; investors, employees, customers, and policymakers increasingly see sustainability as a defining component of a well-run business, and so a growing number of firms are prioritizing decarbonization. As a zero-carbon energy solution that is now the largest source of new power generation capacity in the United States, solar will inevitably be a major source of many firms’ and industries’ next steps as they seek to move on from fossil fuels.

Innovative businesses across all sectors should look to solar power as a major part of their future electricity sourcing. Businesses can acquire solar energy either from panels they own or with a Power Purchase Agreement (PPA), a category that includes both classic PPAs that purchase electricity produced by a solar farm and “virtual” PPAs that sponsor the release of solar energy to the grid and grant Renewable Energy Credits (RECs) to the electricity buyer (i.e., physical electricity is not released to the buyer’s facilities but transferred to the grid). Whichever way it is acquired, solar energy reduces an organization’s carbon footprint and is price competitive with traditional forms of energy. It is worth noting that some RECs are of lower quality, meaning they are not additive to the overall capacity of solar energy production. Therefore, businesses that choose to own their own solar capacity or to use classic PPAs can have higher confidence that the resulting carbon footprint reduction is not illusory.

The rewards can multiply for companies that embrace solar. The most direct practical benefit is that, thanks to electricity cost savings, a panel installation can pay for itself and save money in the long run. Of course, companies will also benefit from the more predictable and less risky world that would result if sufficient carbon-free energy adoption by organizations succeeds in keeping global warming below a 1.5°C increase. In a world where the seemingly endless litany of hurricanes, floods, wildfires, droughts, and heat waves would finally be slowing, worker and equipment safety would then cause less anxiety for businesses than they currently have been. And firms should not worry that their actions will not have an impact; when the average U.S. citizen’s carbon footprint is about 16 tons per year, a company’s emission-cutting action can have quite an impact when examined across a large number of employees. Further, sustainability success stories can also inspire other organizations to act and join in the climate fight.