Wisconsin companies adopting solar energy aren’t just doing it for bragging rights. Some say the economic case has become stronger for solar.
These economic nudges come in various forms, ranging from clear energy savings to higher environmental standards set by customers.
Smart Motors Toyota in Madison installed 940 solar panels in 2017 to power a significant portion of its business.
Rob Jordan, Smart Motors operations manager, said doing so matched the values of the community and of the energy-efficient cars that Toyota produces.
But solar energy also made sound financial sense.
“It’s extremely fulfilling to see the results on a monthly and annual basis of what we’re able to produce,” Jordan said. “Especially in terms of this was power that didn’t have to be generated (elsewhere) in order to support our business.”
Sam Dunaiski works with companies to help them adopt solar energy as a program manager with RENEW Wisconsin, a nonprofit group that promotes renewable energy. Dunaiski said when he talks to businesses, he’s mostly making an economic case as opposed to an environmental one.
“We certainly think those (environmental benefits) are good, too,” he said. “But we talk about the economic benefits more because it tends to entice people from all walks of life.”
Dunaiski said solar is rising in popularity among businesses and building owners. In 2019, new Wisconsin commercial solar installations totaled 10,755 kilowatts, he said. This represents all non-residential, non-utility installed solar, but also includes some governmental buildings or those occupied by organizations or nonprofit groups.
He added that 2019 was the last year businesses could receive a 30% federal Investment Tax Credit for installing solar energy systems. The tax credit decreased to 26% in 2020, and will eventually reduce in 2022 to 10% for businesses and 0% for home solar arrays.
According to information provided by RENEW Wisconsin, the initial cost to install a 10-kilowatt solar system is about $26,000, which can be reduced to $14,307 with state and federal incentives. A 20-kilowatt system costs about $48,000, reduced to $26,550 with incentives. A 100-kilowatt system costs $200,000, reduced to $110,330 with incentives.
Utility companies are clearly paying attention to solar as well. In May, Madison Gas and Electric announced it filed an application with the Public Service Commission of Wisconsin for a 20-megawatt solar array to be built in Fitchburg.
About a week later, Alliant Energy announced plans for 675 megawatts of solar in mostly rural areas in Grant, Jefferson, Richland, Rock, Sheboygan and Wood counties. Once operational, the project would make Alliant the largest owner-operator of solar in Wisconsin, according to the utility.
Dunaiski said he spends a lot of time educating companies on current solar power technology and benefits.
“The nice thing about solar is it can be sized up or sized down depending on the project type,” he said. “Solar is great, because it’s a one-size-fits-all type of electric generation.”
He said that many assume Wisconsin isn’t a good place for a solar array, especially compared to desert regions. Another misconception among businesses, he said, is that it is too expensive to install solar panels, and the energy generated would not be worth the cost.
On the contrary, he said, costs have come down in recent years and the technology has improved.
For instance, as recently as five years ago, a directly east- or west-facing solar array wasn’t possible.
“Now because of improvements in technology and policy changes as well, a lot of businesses have put up arrays that face directly east or face directly west,” Dunaiski said. “So, a lot of it is giving them the current information.”
Smart Motors’ solar panels can generate enough energy in a year to power 50 homes annually, according to the dealer. Each year the panels generate about 37% of the energy needed to run the building, and that increases to about 50% in the summer months.
As of the end of 2019, the panel system has saved more than 1 million pounds of carbon dioxide emissions, the same as planting more than 24,700 trees, according to Smart Motors.
There’s also the benefit of little to no maintenance. Jordan said Smart Motors was told to expect almost nothing in maintenance costs the first 20 years, which has proven true so far roughly three years in.
Germantown-based packaging distributor Illing Co. Inc. is constructing a new 248,000-square-foot corporate headquarters, production facility and warehouse that will be 100% solar powered.
According to the company, the 389-kilowatt-hour photovoltaic installation includes engineering, design and interconnection application with WE Energies.
Keith Hemmig, Illing director of marketing and business development, said the new headquarters combines company operations currently performed in three separate buildings. Illing expects to move into the new facility in mid-July, he said.
Hemmig said the use of solar energy made sense because of the company’s values of being good stewards of its resources.
But, similar to Smart Motors’ decision to retrofit its building in 2017 with solar panels, a solar installation on this new building for Illing comes with various financial benefits.
Hemmig said the company projects it will cost 2 cents per kilowatt hour to generate energy itself through the solar array. This is compared to paying the utility company 12 cents for each hour. The return on investment for the solar installation is less than five years, and Illing estimates net zero energy consumption in less than 12 months of operations, he said.
Beyond that, there’s the pressure from customers to adopt sustainable practices, Hemmig said.
He said retailers such as Walmart have “scorecards,” or sustainability targets they wish to achieve through things like source reductions, recycling and greater reliance on renewable energy.
A relatively easy way to meet retailers’ scorecards is to reduce the amount of packaging used for products, Hemmig said. What’s more difficult is adopting renewable energy, which requires the appropriate infrastructure that supports it.
Part of that challenge is the fact that not all existing buildings can be retrofitted for solar energy.
For Illing Co., it wasn’t feasible to install solar panels on its existing facilities, Hemmig said. The company had to wait until it was ready to put up a new one.
“New construction gave us a unique window to take advantage of sustainable energy,” he said.
Smart Motors dealt with similar issues.
Its 13-year-old building is completely covered in solar panels. However, the dealership could not install panels on some of its other smaller buildings due to the presence of HVAC systems on the roof, Jordan said.
Dunaiski said another challenge for solar power is the lack of uniformity in rules and regulations across the state. He said solar power might be financially feasible for businesses in the territory of one utility, but not in another.
He mentioned a Madison-area housing developer that was able to use solar power for residents at one of his locations, but not the other. This was due to the different utility companies serving the developments.
“It’s not necessarily that we favor Utility A’s policies over Utility B; we just want some uniformity across the state so everyone kind of understands how it works,” Dunaiski said. “It just makes sense to level the playing field for everyone in the state.”
Jordan suggested that businesses incorporate the possibility of solar power in their building plans, even if they aren’t planning to invest in solar immediately.
“If you’re building something new, even if you’re not considering it today, your building is going to live for 40 or 50 years, so plan ahead and spend a little of your money now, so that way, if solar becomes obvious in the future, that your buildings are ready for it,” he said.
And for those on the fence of whether to incorporate solar with existing facilities, he suggested doing some research on an initial building to make sure it can handle the added load of the panels.
“If we were to do it over again, I’d say it’s been worth it to us,” Jordan said.