Solar Energy Continues to Shift Auto Industry
More U.S. car dealers are installing solar energy systems to power a good portion of their entire operations and save money.
In state after state, solar is saving auto dealers money. Dealers from Hawaii to Massachusetts are finding that solar provides a net savings that can drastically improve their margins. For some, such as Luther Auto Group in Minnesota, solar is like a long-term annuity, with estimated savings of more than $2 million across its Midwestern dealerships over the next 25 years.
For Toyota of Vallejo in San Francisco’s East Bay, the savings are even more significant. Thanks to a 30 percent federal investment tax credit for renewable energy systems and energy efficiency upgrades, the rooftop system they installed should pay for itself in about four years, saving an estimated $3.8 million over 25 years, the typical life of a commercial solar system — though SunPower® panels have an expected useful life of 40 years.1
While the savings potential of solar for commercial operations such as auto dealers is significant, the auto industry is not driven by savings; it’s driven by sales. Dealers must be able to draw a straight line from a capital investment to its impact on sales.
This has certainly been the case for Boulder Nissan.
“Customers are choosing us over the competitors because we are demonstrating our concern for the community and environment by going solar,” says Ted Christiano, general manager of Boulder Nissan. “Our solar project is actually gaining us customers.”
The bottom line is that dealers who go solar with SunPower are selling more cars. Showing off a solar system with pride pays off in terms of customers knowing that you are a leader in your industry in generating your own clean sustainable energy.
As SunPower’s National Auto Industry Manager, I’m seeing that going solar has an impact on these companies’ branding and differentiation that translates directly to sales volume. Before I joined SunPower, I was a Dealer Principal of domestic and import franchises in Colorado. Now, working with the No. 1 commercial solar provider in the United States,2 I’m able to combine my knowledge of solar and the auto industry to help automakers switch to renewable energy.
Solar Car Dealers Ready for Transition to Electric Vehicles
We are at a high watermark for incentives and tax benefits, making solar pencil for the electricity use of today’s car dealers.
According to industry experts, the transition is coming. According to a Bloomberg New Energy Finance report, EVs stock will increase to 548 million worldwide — or 32% of all passenger vehicles — by 2040. 4
While this is good news for reducing carbon emissions that contribute to global warming, this presents a real question for auto dealers and consumers: How will an entirely electric vehicle fleet be powered?
There’s no question that those EVs will increase the demand on the grid and ultimately the demand for clean affordable solar energy. It just makes sense: Homeowners and business owners who go solar won’t have to worry about finding a charging station and can lock in the price they pay to power their EVs in the face of rising energy costs.
According to the International Energy Agency, electricity demand from the global EV fleet could increase as much as tenfold by 2030 compared to 2018 levels.5
Factors like that definitely influenced Audi Seattle’s decision to power its operations with SunPower solar.
SunPower Elite Dealer A&R Solar designed a 235-kilowatt (kW) system that now covers half of the dealership’s roof. The system features 540 SunPower® solar modules of 435 watts each – the most powerful solar technology available on the market today.
The solar system is powerful enough to offset nearly 50 percent of the company’s electricity use, including the new fleet of Audi’s first fully electric vehicle, the Audi e-tron.
“Being in Seattle, a very progressive area, this is what our customers are demanding,” said Miles Richardson, General Manager and Vice President of Audi Seattle/University Volkswagen. “We’re leading the way with our solar power project, as well as leading the nation in Audi electric vehicle sales. This is only the beginning.”
Fortunately, with nearly 35 years in the industry, SunPower, is here to make sure dealers have a reliable solution to power their EV fleets and their business operations. Our longevity is reassuring to dealers who understand the critical importance of reliability. When meeting with dealer principals, my team and I come armed with facts and a financial feasibility analysis specific to each location.
We know that car dealer’s operations are often standardized with incentives driven by manufacturer programs. So, there is not a lot of wiggle room in their budgets. We can show a rapid return on investment based on the declining cost of solar, tax incentives and the incredible performance of SunPower systems.
Take Advantage of Solar Tax Incentives Now
Some commercial businesses (as well as schools and government entities) that installed a solar system in 2019 were eligible for a 30 percent Investment Tax Credit (ITC) against the upfront cost of the system.
But the ITC is due to decrease by 4 percent per year from 2020 until 2022, when the credit is reduced to 10 percent for commercial installations. While the solar industry is pushing for an extension to this credit, there is no guarantee that this will happen.6
Savvy auto dealers are choosing to go solar now to get the best incentives. They know that the inevitable shift toward EVs will mean more onsite chargers are needed, and the increased power demand will eventually only cost them more in utility costs.
And that makes it clear: Solar energy, already a good choice for saving money and helping the environment, positions auto dealers well for a transportation future that will be increasingly electric.
1“SunPower Module 40-Year Useful Life,” SunPower white paper, 2013. Useful life is 99 out of 100 panels operating at more than 70% of rated power.
2 SunPower ranked #1 in capacity for in 2017 and 2018, Wood Mackenzie (formerly known as GTM), March 2019.
3 Electric Vehicle Sales Facts & Figures, Edison Electric Institute, July 2018.
4 Researchers have no idea when electric cars are going to take over, Quartz, accessed May 2019.
5 “Global EV Outlook 2019“, IEA, Paris, 2019.
6 Tax credits subject to change. SunPower does not warrant, guarantee or otherwise advise its partners or customers about specific tax outcomes. Consult your tax advisor regarding the solar tax credit and how it applies to your specific circumstances. Please visit the dsireusa.org website for detailed solar policy information.
This post originally appeared on the SunPower Business Feed.