Friday, August 31, 2012

5 Steps to Make the Business Case for Solar

While experts predict dramatic increases in U.S. solar generation in the next few years as panel prices fall and the market continues to mature, an invisible hurdle must first be overcome. Businesses that own or lease commercial property have great difficulty identifying and authorizing cost-effective solar projects in time to leverage available incentives and favorable market conditions. They have to evaluate the business case for solar on each property in their portfolio and monitor the projected returns over time. The analysis is highly complex; each project is idiosyncratic, and the results are time-sensitive.

Alta Energy, an independent solar analytics and procurement company, has just released a new report, “Making the Business Case for Solar,” which provides a clear five-step process for owners of shopping centers, corporate campuses, industrial facilities and other commercial properties to make sound solar decisions. The report includes a detailed presentation that internal staff can utilize to educate company decision-makers and get timely authorizations for cost-effective projects.

Five steps for making the business case for commercial solar

Alta Energy’s five-step process for making sound solar decisions is summarized below. Download the free report for more details.

Step 1: Understand your corporate goals. The first step in making the business case for specific solar projects is to understand why your company is considering solar power. This will help you determine what information you need to include in your solar analysis, as well as how to present the information to your colleagues. The report identifies the critical questions to consider at this stage and includes a checklist of factors to consider.

Step 2: Determine your company’s criteria for a viable solar project. While there may be a minimum ROI hurdle corporate-wide (and/or other financial metrics), there may be significant solar-specific criteria and/or non-financial criteria as well. There also may be factors that are difficult to quantify, such as the impact of solar projects on the company’s brand image and corporate reputation.

Step 3: Understand the choices involved in commercial solar projects. In order make sense of your company’s solar options – and present them coherently to company decision-makers – you’ll need to develop an understanding of all aspects of the solar development process, as well as the players involved. The report provides detailed information about the four major elements in a commercial solar project: ownership structure, government/utility incentives, technology and vendor type. These elements are interrelated in complex ways, and your choices for each potential solar project will significantly affect its economic value.

Step 4: Analyze your portfolio to identify the best projects. Your own thorough, objective analysis is the cornerstone of your business case. You will need a consistent analytical framework to evaluate all of the properties in your company’s portfolio, providing an objective, systematic way to make a “go/no-go” decision on each potential property – and track each property’s solar potential as market and policy conditions change. Alta Energy’s report defines the elements of a comprehensive, robust model and identifies some serious dangers related to potential biases in the data.

Step 5: Present your recommendations to company decision-makers. The report includes a sample presentation for educating company decision-makers about potential solar projects and providing the information needed to make smart solar investment decisions. The presentation contains examples of the reports from Alta Energy’s solar analytics model,
which commercial property owners can utilize to evaluate and track their portfolio.

These five steps give commercial property owners a rational, objective way to identify cost-effective solar projects and move quickly when the time is right, deploying solar power in ways that make economic sense.


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