People who are nearsighted typically find it more difficult to read road signs or see distant objects clearly. It’s a condition easily corrected with the right pair of prescription lenses. But those looking to purchase a new commercial solar panel system may not even recognize they have a form of “investment myopia” that’s preventing them from seeing beyond upfront installation costs.
The goal of this piece is to focus on some of the factors that impact the longer-term view of commercial solar savings. It could be just the prescription needed to make the right solar power decision for your business and help you see the best solar option is the one that provides the largest net savings over its lifetime.
Solar Energy Cost per Watt vs. Cost per What Really Matters
Comparing commercial solar power generating systems appears, on the surface, to be relatively straightforward. Simply add up the initial investment expenses (everything from site preparations, equipment purchase, installation costs, legal fees—and anything else you need to spend money on in order to get your commercial solar system online) and then divide that figure by the anticipated amount of electricity the commercial solar panels will produce and you get a “cost per watt” figure.
The system with the lower cost per watt is then the obvious choice, right? Not necessarily. Learning to look beyond upfront costs can offer a more comprehensive and intelligent method to value a commercial solar investment long-term. The higher cost per watt option may actually prove to be the better deal in the long run—offering better value and ultimately, greater savings.
Cheaper vs. Better Solar Panels
I always shake my head when I see commercials by carmakers touting “initial quality” awards for the vehicles they sell. I would hope the initial quality of a brand-new car is good! But what is the quality level 100-thousand miles down the road?
A lower-quality car that initially costs less may in fact be more expensive when you start factoring in poorer gas mileage and repair bills. The same can be true for commercial solar panels. Here are some things to consider when buying solar equipment that’s expected to perform for decades:
- Efficiency: A solar panel’s efficiency rating refers to the portion of sunlight energy it can convert into electricity. If its photovoltaic (PV) cells are more efficient, fewer panels are needed to meet electricity production goals—which can save money over a solar system’s lifetime.
- Production/Yield: Daytime position of the sun, time of year, level of cloudiness, geographic location, and shadows all impact the amount of energy a solar panel produces. In addition, not all commercial solar panels are created equal. How consistently and effectively a commercial-grade solar panel performs in various conditions directly relates to its level of electricity production and yield.
- Durability: Assessing solar panel durability is critical if the equipment is expected to be exposed to harsh environmental conditions. Will it be located near the corrosive sea air of an ocean coast? Do weather conditions change with the seasons? Can it handle the extreme heat of a desert? Even if the environmental risk is relatively low, more durable equipment may still be the better option because it is generally more dependable and less likely to fail. Greater solar panel durability can also lead to lower operation and maintenance costs. Although commercial solar systems are surprisingly easy to take care of, more durable panels are generally easier to maintain.
- Degradation Rate: All solar cells degrade over time. That is, they produce less energy each year over the solar panel’s lifetime. Accurate predictions of decreased power output over time can help determine a more accurate return on investment (ROI). The lower the degradation rate, the more electricity your panels can produce, which means more savings over the system’s lifetime.
Investing in top-quality solar panels at the start may appear to be more expensive than going with a lesser option, but as the above list illustrates, quality matters. However, finding solar equipment that rates high in each of these categories is only part of the equation. What if the predictions on paper don’t pan out as expected in the real world? That’s why it’s important to partner with a reputable solar equipment provider willing to back its products with guarantees. But beware—not all guarantees are created equal.
This post originally appeared on the SunPower Business Feed.