Assessing the Total Value of Commercial Solar Power

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With rising grid electricity prices and declining solar technology costs, the economic benefits of commercial solar power are becoming increasingly difficult for leading businesses to ignore. Transitioning to solar can save money on energy today and hedge against rising utility rates tomorrow. However, before moving forward with solar, it is important to determine the total energy production and cost savings over the lifetime of your solar installation.

More Energy = Greater Savings

SunPower® solar systems generate more energy per square foot or acre than any other solar technology available today. As a result, SunPower customers are able to better utilize the area available for their solar project. By producing the most solar electricity possible, you will be able to minimize the amount of conventional utility-generated electricity you consume and maximize your long-term savings.

Calculating Savings from Solar Energy

When calculating the value of a potential solar project, it is critical to assess your total cost savings over the expected life of your system. Without accounting for energy production differences in solar technology, it is hard to make the right long-term financial decisions. Gross system price, price per kilowatt, or the first-year power purchase agreement (PPA) rate can be deceptive measures of the value of a solar project.

Net Present Value (NPV)

Calculating the Net Present Value (NPV) of energy savings from solar is a particularly effective method for quantifying the true value of any solar project. The NPV financial calculation captures the project costs and savings as they occur over time and conveniently converts them into a single dollar amount. When considering a commercial solar project, it is important to understand the present value of the projected net savings over the life of the system. The larger the NPV, the greater the total savings you can expect.
 
If your facility needs assistance calculating NPV or sourcing solar incentives, contact SunPower for a consultation. Because SunPower specializes in nearly every aspect of the solar value chain, we can help you make realistic and financially sound decisions regarding any solar installation you are exploring.

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Valuing the Return on Commercial Solar Projects

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