Green Energy: Solar Power
As the world's energy consumption grows and climate change becomes a growing concern, many businesses are seeking ways to reduce their carbon footprint and transition to sustainable energy sources. One of the most promising solutions for this problem is solar power, which has the potential to be a major player in the future of business energy needs. In this article we will explore the reasons why solar power is a major part of the future of business energy needs, as well as provide some useful tips for businesses looking to make the switch.
First and foremost, solar power is a clean and renewable source of energy. It produces zero greenhouse gas emissions and does not rely on fossil fuels, which makes it a critical solution for tackling climate change. According to a report by the International Energy Agency, solar power is the cheapest source of electricity in history and is expected to become the dominant source of electricity worldwide by 2050. In addition, solar power has become increasingly affordable over the past decade, with the cost of solar panels dropping by over 80% since 2010.
Solar power also offers businesses the potential for energy independence. By generating their own electricity, businesses can reduce their reliance on traditional power sources and avoid the volatility of energy prices. This can result in significant cost savings for businesses in the long run. According to a report by the National Renewable Energy Laboratory (NREL), the cost of solar power has fallen by over 80% in the last decade and is now cheaper than the cost of traditional grid electricity in many areas.
Another advantage of solar power for businesses is its scalability. Solar panels can be installed on a variety of building types, from small office buildings to large industrial facilities. Additionally, solar power can be integrated with other energy sources, such as wind power, to create a hybrid system that can provide a reliable source of energy for businesses.
When it comes to making the switch to solar power, businesses can take a few key steps to ensure a successful transition.
Firstly, it's important to conduct a thorough energy audit to determine how much energy is being consumed and identify areas where energy can be saved. This can help businesses to identify the optimal size of the solar power system needed and the potential cost savings that can be achieved. Additionally, businesses should carefully research potential solar power suppliers and look for those with a strong track record, experience, and certifications. Certifications such as the Renewable Energy Guarantee of Origin (REGO) demonstrates to customers and other stakeholder groups that the energy supplied is generated from renewable sources.
Another important consideration for businesses is the potential tax benefits and incentives that may be available for installing solar power systems. As part of the UK government's economic recovery plan after the Covid-19 pandemic, the Chancellor of the Exchequer announced a solar power incentive package in March 2021. This package included two tax breaks: the 130% Super-Deduction and the 50% First Year Allowance (FYA). These measures were intended to reduce the country's reliance on fossil fuels and represented the most extensive two-year business tax cuts in recent British history.
The Super-Deduction tax break, which went into effect on 1st April 2021, allows businesses to deduct 130% of the cost of solar equipment and installation from their taxable profits. This means that for every £1 invested in solar energy, companies can reduce their tax bill by up to 25p.
The 50% First Year Allowance is a bit more complex. Companies that invest in solar roofs or other setups will only pay corporation tax on their profits minus half of the value of the equipment installed, deducted through capital allowance. For example, if a company invests £300,000 in a solar power system, they will be entitled to a 50% capital tax allowance of £150,000. This tax benefit will then be applied to the overall taxable profit, resulting in a tax saving.
These tax breaks are available to all businesses, regardless of their size or location, as long as they are legally permitted to install solar equipment at their premises.
In conclusion, solar power has a huge part to play in the future of business energy needs, offering a clean, renewable, and affordable source of energy that can help businesses reduce their carbon footprint, achieve energy independence, and save money in the long run. Businesses that are considering making the switch to solar power should conduct a thorough energy audit, carefully research potential suppliers, and explore tax incentives and financing options to ensure a successful transition.
By doing so, businesses can not only reduce their environmental impact but also reap the financial benefits of solar power for years to come.
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