Frequently asked questions about solar and storage adoption
Learn answers to some of the common questions that we hear about solar and storage implementation for organizations across California.
Above: Promise Energy worked with Sushi Nozawa in east Los Angeles to deliver a 245-kilowatt rooftop solar energy project to offset the property’s high energy costs due to food refrigeration.
Solar Energy
Q: What are the financial benefits of a solar system?
A: By producing and consuming your own solar energy on site, you directly reduce your utility electricity costs and can better avoid future rising electricity rates. Certain utilities will also pay you for any excess energy that you export to the grid. An owned solar system also increases the value of your property.
Q: Will my utility pay me for my solar energy?
A: Yes! In California and many other states, your utility will compensate you for the produced solar energy that you don’t consume on site. If your solar array produces more than your facility is consuming, the surplus energy is automatically exported to the grid. Your utility then pays you a fixed dollar amount for each kilowatt-hour of solar energy in the form of a credit on your bill. This is called Net Energy Metering (NEM).
Q: Are there any incentives available to reduce the cost of solar?
A: Yes! While incentives can vary by state and utility, the federal Investment Tax Credit (ITC) currently provides a 26% tax credit against the lump sum cost of any solar system in the U.S. This means that if your system costs $100,000, your ITC credit would be $26,000. Depending on your location, you may also qualify for additional financial, tax, and depreciation benefits. Ask your Promise Energy contact about available solar incentives in your area.
Q: What is the typical payback period for a solar system?
A: On average, commercial and industrial systems will pay for themselves in about 3-7 years. When you factor in financial incentives, net energy metering (NEM), and freedom from utility electricity rates, a solar system can be a great long-term investment.
Q: During a power outage, can I still use the energy produced by my solar system?
A: In most situations, no. Most grid-connected solar systems will be automatically shut off during a power outage in order to protect first responders and utility repair staff working on the power lines. However, if you pair your solar array with a battery energy storage system (BESS), your solar array can produce energy to be stored in your battery, even during a power outage. This is an example of how a combined solar and storage system can provide critical backup power for your facility.
Q: My roof is nearing the end of its useful life. Can I still install solar?
A: Yes, but we would advise you to first repair or replace your roof before installing a solar system. As a general rule of thumb, the expected life of your roof should meet – if not exceed – the expected life of your solar system. This usually ranges between 25 and 30 years.
Q: What are my solar financing options?
A: There are several options for financing your system. If you don’t want to purchase the system outright, you can choose to use a Property Access Clean Energy (PACE) loan that will pay for the upfront costs of the system; the debt then becomes associated with your property tax assessment. You can also opt for third-party ownership in the form of a Power Purchase Agreement (PPA), which offers no out-of-pocket cost to you. In a PPA, a third party owns and maintains the solar system and sells the produced energy to you, usually at a rate about 10% less than what you pay to your utility. However, since you do not own the system, you do not receive any tax or financial benefits associated with the system.
Q: How long will it take to install my solar system?
A: Installation timelines vary based on system size and complexity but generally fall between 6 and 16 months. For commercial projects, the timeline steps are roughly:
Final design and engineering: 4-8 weeks
Permitting: 2-6 months
Construction: 1-6 months
Utility approval waiting period: 3-8 weeks
Q: What type of maintenance does a solar system require?
A: While solar systems are very robust, annual maintenance and inspections increase the longevity and performance of the system. Depending on your proximity to major highways, agricultural activity, or pollen-shedding woods, your solar panels may need to be cleaned regularly to ensure optimal system performance. Additionally, system inspection and maintenance are also recommended. Promise Energy offers annual and long-term contracts for maintenance of your system, so you won’t have to worry about it.
Energy Storage
Q: What are the benefits of a battery energy storage system (BESS)?
A: A battery energy storage system (BESS) can not only be used as backup power, but it can also reduce your utility costs and charge from your solar array.
Backup power: During a power outage, your BESS will continue to charge from your solar system and provide temporary backup power for your facility’s critical devices.
Reduce utility costs: When it is connected to the grid, you can optimize your BESS to store energy when rates are low and discharge energy when rates are highest. You can also reduce costly utility demand charges by discharging your BESS when your consumption is highest
Solar integration: Your BESS can charge from your onsite solar array. This helps you maximize your consumption of your solar energy, enables more utility savings, and can prolong your backup power during a power outage.
Q: Are there any incentives for battery energy storage?
A: Yes! When you install a battery energy storage system (BESS) to be charged only by your solar array, the battery also qualifies for the 26% federal solar investment tax credit (ITC). On the state level, the California Self Generation Incentive Program (SGIP) offers a BESS cash rebate, which is based on the battery’s capacity and geographic location. The SGIP rebate often offsets about 20-40% of BESS costs. Depending on your location, you may quality for other incentives. Ask your Promise Energy contact about available BESS incentives in your area.
At Promise Energy, we don’t believe that one size fits all. We pride ourselves in designing and installing customized energy solutions that provide the greatest long-term value and energy control for our customers.
