LOS ANGELES—Solar technology is all the rage. More and more building owners are adopting the technology, but is solar the right choice for all building owners? We sat down with Beth Fox, a partner in the energy practice at Manatt, Phelps & Phillips LLP, to talk about what building owners should consider, like cost analysis to choosing the right solar company, before taking the plunge.
GlobeSt.com: What should property owners consider when looking to install solar technology in their property?
Beth Fox: The first thing to consider is whether the solar arrangement offered is beneficial to you. Before entering into any solar contract, be sure you understand the rate that you are paying for electricity now and what you would pay under the contract with the solar company. If you own a commercial or industrial facility, you may not only pay energy charges but also a demand charge, which is a separate charge that is based on your peak demand for energy and it is measured in kilowatts rather than kilowatt hours. By using solar, if you have a peak during the day, you can dramatically reduce those charges. That could save you a lot of money. In any event, you really need to get familiar with the tariff that you are charged, understand your rate, and do a careful comparison of what you would pay under the solar agreement.
GlobeSt.com: Is it all about cost, or are there other things to consider?
Fox: There are many other things to consider. First, you should consider if your building is a good prospect for solar, i.e., if your roof is in good repair and if your building gets sufficient sunlight. Second, you should evaluate the costs and benefits of owning versus leasing equipment. Ownership usually involves more of an investment up front, but you may more benefits down the line. As part of this analysis, you should think about how long you are going to occupy the property, and the value of the improvement to your building. Finally, you need to consider the qualifications of the company that you are thinking about dealing with, and how long they have been in the business. They should have both technical experience, with qualified engineers designing the equipment, and permitting experience in your area., Any qualified company should provide references, and you should speak to previous clients of the company to see if they are happy.
GlobeSt.com: Cost is the biggest benefit to installing solar. Are there instances when it is not cost effective to install solar?
Fox: Yes, and that is why you have to think carefully about how much you are paying now, what the company is charging, and whether you can take advantage of investment tax credits and state credits or funds for solar installation. You may have to consider additional costs, like adding a new roof to the property to accommodate the equipment . I also wouldn't necessarily go with the cheapest company, because the real question is whether the system is going to be working in 20 years.
GlobeSt.com: What should building owners consider when choosing solar companies to install panels?
Fox: In addition to client satisfaction and permitting experience, technical expertise and the right engineers to design a system that gets the most power are all incredibly important. You also want to make sure that they will give you a warranty on the panels for at least 20 years, and you need to ask the amount of degradation that they expect in 20 years. You are not going to get the same amount out of the system in year one that you would in year 20, but these days, a panel should not degrade more than about 20% in 20 years. They should also be able to protect your roof against leaks that are caused by the installation of the system. The company should cover you for that.
GlobeSt.com: Have you seen an increase in clients looking for advice on installing solar technology?
Fox: Absolutely. This is the way of the future, and I think more and more companies and homeowners are looking to both buy and lease solar systems.
LOS ANGELES—Solar technology is all the rage. More and more building owners are adopting the technology, but is solar the right choice for all building owners? We sat down with Beth Fox, a partner in the energy practice at
GlobeSt.com: What should property owners consider when looking to install solar technology in their property?
Beth Fox: The first thing to consider is whether the solar arrangement offered is beneficial to you. Before entering into any solar contract, be sure you understand the rate that you are paying for electricity now and what you would pay under the contract with the solar company. If you own a commercial or industrial facility, you may not only pay energy charges but also a demand charge, which is a separate charge that is based on your peak demand for energy and it is measured in kilowatts rather than kilowatt hours. By using solar, if you have a peak during the day, you can dramatically reduce those charges. That could save you a lot of money. In any event, you really need to get familiar with the tariff that you are charged, understand your rate, and do a careful comparison of what you would pay under the solar agreement.
GlobeSt.com: Is it all about cost, or are there other things to consider?
Fox: There are many other things to consider. First, you should consider if your building is a good prospect for solar, i.e., if your roof is in good repair and if your building gets sufficient sunlight. Second, you should evaluate the costs and benefits of owning versus leasing equipment. Ownership usually involves more of an investment up front, but you may more benefits down the line. As part of this analysis, you should think about how long you are going to occupy the property, and the value of the improvement to your building. Finally, you need to consider the qualifications of the company that you are thinking about dealing with, and how long they have been in the business. They should have both technical experience, with qualified engineers designing the equipment, and permitting experience in your area., Any qualified company should provide references, and you should speak to previous clients of the company to see if they are happy.
GlobeSt.com: Cost is the biggest benefit to installing solar. Are there instances when it is not cost effective to install solar?
Fox: Yes, and that is why you have to think carefully about how much you are paying now, what the company is charging, and whether you can take advantage of investment tax credits and state credits or funds for solar installation. You may have to consider additional costs, like adding a new roof to the property to accommodate the equipment . I also wouldn't necessarily go with the cheapest company, because the real question is whether the system is going to be working in 20 years.
GlobeSt.com: What should building owners consider when choosing solar companies to install panels?
Fox: In addition to client satisfaction and permitting experience, technical expertise and the right engineers to design a system that gets the most power are all incredibly important. You also want to make sure that they will give you a warranty on the panels for at least 20 years, and you need to ask the amount of degradation that they expect in 20 years. You are not going to get the same amount out of the system in year one that you would in year 20, but these days, a panel should not degrade more than about 20% in 20 years. They should also be able to protect your roof against leaks that are caused by the installation of the system. The company should cover you for that.
GlobeSt.com: Have you seen an increase in clients looking for advice on installing solar technology?
Fox: Absolutely. This is the way of the future, and I think more and more companies and homeowners are looking to both buy and lease solar systems.
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