How long it takes to recoup the cost of solar panels is one of the issues that most concerns those who decide to opt for this type of energy self-consumption system.
It is especially important for a company to have this information in order for them to be able to draw up a realistic business plan or to justify the long-term financial benefits of this investment to their investors.
How much does it cost to install solar panels in companies?
More and more SMEs and medium-sized companies are deciding to install solar panels and choose energy self-consumption.
It isn’t only a question of commitment to the planet, company image, or corporate social responsibility; it is also a financial issue that has a bearing on the profitability of any business project.
In the case of companies, the initial financial outlay is very high compared to domestic photovoltaic installations, as they need to produce much more electricity.
Their budget will be determined by:
- The company’s electrical needs. This will determine the number of solar panels required for the PV installation and their budget.
- The complexity of the photovoltaic project.
- The quality of the PV components.
- The geographical location of the factory, industrial building, warehouse, etc.
- Grants or subsidies that the company may be eligible for (these may be local and/or regional, from the State, European grants, or grants unique to the production sector, etc.).
Generally speaking, for businesses requiring an average of 5 kW, the cost of the PV installation will range between €6,000 to €10,000. For businesses needing twice as much energy (10 kW), the cost can be as much as €15,000, and then up to €20,000 for a 15 kW installation.
Larger businesses, or businesses that need to generate more than 20 kW to meet their electricity demands, will have to lay out an initial sum of more than €20,000.
When will you recoup the cost of solar panels? Is it a profitable investment for your business?
The time it takes a company to recoup the cost of solar panels isn’t as long as in the case of a house, as the working hours usually coincide with the hours of sunlight, and the highest production period of the panels.
On average, you can recoup the cost of solar panels in homes in around 7 to 8 years. In the case of SMEs and companies, this time is reduced to almost half (4-5 years).
If we take into account that the warranty on photovoltaic panels is 25 years, and their useful life is usually longer, then we can see their potential for high profitability. Once you have recouped the cost of the solar panels, the installation will continue to make a profit in the medium to long term and the electricity bills of your business will be considerably lower for over 20 years.
Installation companies such as MyGreenHouse are well aware of the benefits of self-consumption in business. Banks also tend to offer very good financing conditions, with minimal interest, to help improve the company’s current energy production system and promote a new, more sustainable model.
Finally, to calculate the Internal Rate of Return (IRR) and to find out the real profitability percentage and how long it will take to recoup the cost of solar panels, we will have to assess:
- Power and production (MyGreenHouse projects include a solar study of your business).
- Installation costs and taxes (ICIO, IBI, IPC, etc.).
- Energy surpluses in simplified compensation (only in installations that are connected to the grid).
- Investment and debt repayment period.
Available grants for companies
Companies can apply for different grants to help finance their photovoltaic installations. Among them, we can highlight:
- Government subsidies for self-consumption in SMEs – approved in 2021 – which allow subsidies of up to 45% on solar panel installations of less than 10 kW.
- IBI and ICIO subsidies for self-consumption in SMEs, dependent on local councils.
- Regional grants for solar panel installations in SMEs.
Finally, we would like to remind you that the regulations for photovoltaic self-consumption in SMEs and companies are set out in the Royal Decree 244/2019, which specifies the characteristics of this type of installation.
Do you need more information?
Installing solar panels is an important decision that will bring you many future benefits. We recommend that you seek expert advice in order to design the most suitable installation for your business. Call us and ask for your free assessment!