The performance, cost, and profit figures for each photovoltaic system case mentioned in the article are valid at the time of writing this document, specifically: 08/07/2021. At any other point in time, the actual figures may show significant differences.
Key Points of the Article:
– Raw materials and personnel salaries do not allow for significant reductions.
– Changing providers contributes to reducing the bill, but not to a satisfactory degree.
– The profitability of businesses that have turned to photovoltaics is evident.
– Business photovoltaics are considered mechanical equipment.
– Example of an industry with an annual benefit of €14,000.
– Example of a store with an annual benefit of €2,300.
Introduction: What Applies to Businesses
Every business, small or large, aims to achieve profits in order to be sustainable, ensure prosperity for owners and employees, and grow. The search for ways to increase profitability is ongoing. It extends to all areas of the business, from the production process to the sale of goods or services.
Some areas, such as raw materials or personnel salaries, do not allow for significant reductions. There is a risk of decreasing the quality of the final product, productivity, and the number of employees. Cuts in areas such as product promotion may lead to reduced sales and revenue. However, there are some expenses that can be reduced, giving new momentum to businesses. The electricity required for operation is one of the main ones, if not the main one.
Detaching the production process from electricity is often unfeasible. Therefore, reducing the cost of the bill seems to be the only way forward. Continuous increases in electricity rates add new headaches for professionals, who must decide whether to absorb the additional cost themselves, thus reducing their profit, or pass it on to the final price, risking becoming uncompetitive.
A change of provider, which in previous years was presented by a large part of the energy market as the solution to the energy problem, proves that while it does contribute to reducing the bill, it does not do so to a satisfactory degree to be considered the definitive and optimal solution to the problem.
Business Photovoltaics Significantly Reduce Energy Costs
The shift to green energy and net metering (net – metering), are the solution for professionals. Installing a photovoltaic system on a roof or terrace is now a quick and easy investment, both in terms of licensing and installation. It allows the business to produce all or part of the electricity needed for its operation.
The profitability for those who have turned to corporate photovoltaics in recent years through net metering is evident. It is expected to show an even more upward trend as the payback period for the investment occurs in a very short time. The monthly capital that would correspond to the bills from the Public Power Corporation (PPC) or any other provider remains available for utilization. If we also consider the expected increases in electricity costs, it becomes clear that the profit is continually growing. At the same time, the payback time for the investment is reduced.
Why should a business invest in photovoltaics?
Beyond the obvious benefit of saving money on electricity bills, the shift to green energy is combined with a range of facilities and incentives that make energy self-production through photovoltaics even more attractive for every entrepreneur.
Firstly, the flexibility that legislation offers regarding where a photovoltaic system can be installed. Specifically, the ability to place it on the roof, terrace, ground, or even on the facade of the building. These factors make it possible to install on any property that receives sunlight for most hours of the day. Additionally, frequent grants from the European Union and domestic bodies through programs provide significant funding opportunities. The amount of funding varies depending on the organization providing it, usually ranging from 50% to 80% of the initial capital required.
Furthermore, the cost of purchasing and installing a business photovoltaic system is considered mechanical equipment. Therefore, it is included in the company’s expenses. This means that the business will not be taxed on revenue equivalent to the cost of the photovoltaic system it installs. Finally, promoting environmentally friendly actions, such as reducing dependence on existing forms of energy that are harmful to the environment, contributes to improving the corporate profile of businesses and, with the right marketing, can attract a multitude of new, environmentally-conscious customers.
Short payback period of less than 3 years for business photovoltaics
The development of photovoltaic technology has contributed to the creation of particularly attractive packages from a financial standpoint. It is estimated that a modern photovoltaic system costs around €800 per kW. Therefore, for an installation of about 15 kW, approximately €12,000 will be required. This specific installation fully meets the needs of a small to medium-sized enterprise.
This system is estimated to save around €3,500 per year if the business is a PPC (Public Power Corporation) customer, or €2,500 with an alternative energy provider. With a 50% subsidy from the new NSRF, the investment cost falls to €6,000. Additionally, tax relief for this amount will save the business owner another €1,400.
We conclude that the entrepreneur is required to pay €6,000, which they would have paid over two years in their electricity bills. Therefore, the payback of the investment is immediate. In less than three years, the business shows profitability that it would not have had under other circumstances.
Example of photovoltaics in industry
To understand the benefits of photovoltaics for businesses with real data, let’s examine the example of a factory that installed photovoltaics on its roof a few months ago. This company, engaged in the processing, sorting, packaging, and preservation of fresh shellfish in the cooling-freezing sector, was paying €73,000 annually for electricity costs due to high consumption from the 24-hour operation of its refrigerators.
The agreed capacity with the HEDNO (Hellenic Electricity Distribution Network Operator) is 135 kVA. Thus, according to net metering regulations, it was allowed to install a photovoltaic system up to 67.5 kW. ΙΩΝΙΚΗ Renewables undertook the licensing and installation of the project, which cost €53,000.
After the completion of the work, the annual electricity cost was reduced to €59,000, resulting in an annual benefit of €14,000. Considering that the project was subsidized by NSRF at 50% of the initial investment, we conclude that the company ultimately paid €26,500. The payback was achieved in less than 2 years. If we also account for the tax exemption from the capital spent, estimated over ten years at €6,300, then the total cost of the investment was amortized in less than 1.5 years.
The annual benefit of €14,000 can be equated to the salary and insurance contributions of a new employee or the purchase of a new machine to modernize the production line. Alternatively, if the business decides to save this amount for a period of five years or more, it can proceed with expanding the existing factory or fully modernizing production.
However, even if this specific entrepreneur chooses not to proceed with any of the above options, the monthly profit of €1,166 cannot be considered an insignificant amount, and at the end of the 25-year contract, the total amount earned by the entrepreneur is estimated to be €330,000.
Example of photovoltaics in a shop
However, business photovoltaics are not a privilege of the few. They can be utilized for the benefit of any professional who has the required space and is looking for ways to increase their business profitability. Let’s assume, for example, that a neighborhood bakery has the necessary available space and sunlight required to install a photovoltaic system on the roof of the building it occupies.
Provided that it has the consent of the other owners of the building, it can proceed with the installation of a 9.5 kW system, which is sufficient to fully cover the 13,000 kWh it consumes annually from the operation of ovens and refrigerators for the production and sale of fresh baked goods and dairy products.
The procurement and installation of such a system, at current market prices, is estimated at €9,000. However, if a subsidy is obtained, the required amount decreases to €4,500, with tax exemptions over ten years amounting to €1,000.
Thus, the actual amount that the bakery owner is required to pay reaches €3,500. The annual profit from the installation of the above system is estimated at €2,300, and the payback period is less than two years.
This amount can be used to pay off rent in cases where the space is not owned, or to modernize the production line to produce larger quantities of baked goods in less time, or to add new products that will attract even more customers.
Finally, this profit allows the entrepreneur to reduce prices if they believe that this way they can improve their market position against their competitors by attracting new consumers.
Green energy is for everyone
Regardless of the size of their business, every professional seeks to minimize their expenses without compromising the quality of the services provided. As seen from the examples above, the shift to green energy and the utilization of renewable sources for electricity generation represent an easy and quick way to reduce monthly operating costs, with the entrepreneur now being called to decide how to allocate the money they have saved.
Business photovoltaics from ΙΩΝΙΚΗ Renewables
At ΙΩΝΙΚΗ Renewables, we have experience in the study and installation of photovoltaics. We have installed photovoltaic parks as well as systems for residences and businesses throughout Greece, including islands. We handle all the processes, from potential financing to the study, the submission of the application, the installation, and we deliver your photovoltaic system turnkey.
Are you interested in photovoltaic; Click on the button “I Want a phone appointment” below, fill out the form and a competent engineer will contact with you to solve all your questions and to guide you to the right decision.
Read also
Business Photovoltaics: How Do They Increase Profitability? (Examples)
George Kotakis
Electrical Engineer |
ΙΩΝΙΚΗ Autonomous
The performance, cost, and profit figures for each photovoltaic system case mentioned in the article are valid at the time of writing this document, specifically: 08/07/2021. At any other point in time, the actual figures may show significant differences.
Key Points of the Article:
– Raw materials and personnel salaries do not allow for significant reductions.
– Changing providers contributes to reducing the bill, but not to a satisfactory degree.
– The profitability of businesses that have turned to photovoltaics is evident.
– Business photovoltaics are considered mechanical equipment.
– Example of an industry with an annual benefit of €14,000.
– Example of a store with an annual benefit of €2,300.
Introduction: What Applies to Businesses
Every business, small or large, aims to achieve profits in order to be sustainable, ensure prosperity for owners and employees, and grow. The search for ways to increase profitability is ongoing. It extends to all areas of the business, from the production process to the sale of goods or services.
Some areas, such as raw materials or personnel salaries, do not allow for significant reductions. There is a risk of decreasing the quality of the final product, productivity, and the number of employees. Cuts in areas such as product promotion may lead to reduced sales and revenue. However, there are some expenses that can be reduced, giving new momentum to businesses. The electricity required for operation is one of the main ones, if not the main one.
Detaching the production process from electricity is often unfeasible. Therefore, reducing the cost of the bill seems to be the only way forward. Continuous increases in electricity rates add new headaches for professionals, who must decide whether to absorb the additional cost themselves, thus reducing their profit, or pass it on to the final price, risking becoming uncompetitive.
A change of provider, which in previous years was presented by a large part of the energy market as the solution to the energy problem, proves that while it does contribute to reducing the bill, it does not do so to a satisfactory degree to be considered the definitive and optimal solution to the problem.
Business Photovoltaics Significantly Reduce Energy Costs
The shift to green energy and net metering (net – metering), are the solution for professionals. Installing a photovoltaic system on a roof or terrace is now a quick and easy investment, both in terms of licensing and installation. It allows the business to produce all or part of the electricity needed for its operation.
The profitability for those who have turned to corporate photovoltaics in recent years through net metering is evident. It is expected to show an even more upward trend as the payback period for the investment occurs in a very short time. The monthly capital that would correspond to the bills from the Public Power Corporation (PPC) or any other provider remains available for utilization. If we also consider the expected increases in electricity costs, it becomes clear that the profit is continually growing. At the same time, the payback time for the investment is reduced.
Why should a business invest in photovoltaics?
Beyond the obvious benefit of saving money on electricity bills, the shift to green energy is combined with a range of facilities and incentives that make energy self-production through photovoltaics even more attractive for every entrepreneur.
Firstly, the flexibility that legislation offers regarding where a photovoltaic system can be installed. Specifically, the ability to place it on the roof, terrace, ground, or even on the facade of the building. These factors make it possible to install on any property that receives sunlight for most hours of the day. Additionally, frequent grants from the European Union and domestic bodies through programs provide significant funding opportunities. The amount of funding varies depending on the organization providing it, usually ranging from 50% to 80% of the initial capital required.
Furthermore, the cost of purchasing and installing a business photovoltaic system is considered mechanical equipment. Therefore, it is included in the company’s expenses. This means that the business will not be taxed on revenue equivalent to the cost of the photovoltaic system it installs. Finally, promoting environmentally friendly actions, such as reducing dependence on existing forms of energy that are harmful to the environment, contributes to improving the corporate profile of businesses and, with the right marketing, can attract a multitude of new, environmentally-conscious customers.
Short payback period of less than 3 years for business photovoltaics
The development of photovoltaic technology has contributed to the creation of particularly attractive packages from a financial standpoint. It is estimated that a modern photovoltaic system costs around €800 per kW. Therefore, for an installation of about 15 kW, approximately €12,000 will be required. This specific installation fully meets the needs of a small to medium-sized enterprise.
This system is estimated to save around €3,500 per year if the business is a PPC (Public Power Corporation) customer, or €2,500 with an alternative energy provider. With a 50% subsidy from the new NSRF, the investment cost falls to €6,000. Additionally, tax relief for this amount will save the business owner another €1,400.
We conclude that the entrepreneur is required to pay €6,000, which they would have paid over two years in their electricity bills. Therefore, the payback of the investment is immediate. In less than three years, the business shows profitability that it would not have had under other circumstances.
Example of photovoltaics in industry
To understand the benefits of photovoltaics for businesses with real data, let’s examine the example of a factory that installed photovoltaics on its roof a few months ago. This company, engaged in the processing, sorting, packaging, and preservation of fresh shellfish in the cooling-freezing sector, was paying €73,000 annually for electricity costs due to high consumption from the 24-hour operation of its refrigerators.
The agreed capacity with the HEDNO (Hellenic Electricity Distribution Network Operator) is 135 kVA. Thus, according to net metering regulations, it was allowed to install a photovoltaic system up to 67.5 kW. ΙΩΝΙΚΗ Renewables undertook the licensing and installation of the project, which cost €53,000.
After the completion of the work, the annual electricity cost was reduced to €59,000, resulting in an annual benefit of €14,000. Considering that the project was subsidized by NSRF at 50% of the initial investment, we conclude that the company ultimately paid €26,500. The payback was achieved in less than 2 years. If we also account for the tax exemption from the capital spent, estimated over ten years at €6,300, then the total cost of the investment was amortized in less than 1.5 years.
The annual benefit of €14,000 can be equated to the salary and insurance contributions of a new employee or the purchase of a new machine to modernize the production line. Alternatively, if the business decides to save this amount for a period of five years or more, it can proceed with expanding the existing factory or fully modernizing production.
However, even if this specific entrepreneur chooses not to proceed with any of the above options, the monthly profit of €1,166 cannot be considered an insignificant amount, and at the end of the 25-year contract, the total amount earned by the entrepreneur is estimated to be €330,000.
Example of photovoltaics in a shop
However, business photovoltaics are not a privilege of the few. They can be utilized for the benefit of any professional who has the required space and is looking for ways to increase their business profitability. Let’s assume, for example, that a neighborhood bakery has the necessary available space and sunlight required to install a photovoltaic system on the roof of the building it occupies.
Provided that it has the consent of the other owners of the building, it can proceed with the installation of a 9.5 kW system, which is sufficient to fully cover the 13,000 kWh it consumes annually from the operation of ovens and refrigerators for the production and sale of fresh baked goods and dairy products.
The procurement and installation of such a system, at current market prices, is estimated at €9,000. However, if a subsidy is obtained, the required amount decreases to €4,500, with tax exemptions over ten years amounting to €1,000.
Thus, the actual amount that the bakery owner is required to pay reaches €3,500. The annual profit from the installation of the above system is estimated at €2,300, and the payback period is less than two years.
This amount can be used to pay off rent in cases where the space is not owned, or to modernize the production line to produce larger quantities of baked goods in less time, or to add new products that will attract even more customers.
Finally, this profit allows the entrepreneur to reduce prices if they believe that this way they can improve their market position against their competitors by attracting new consumers.
Green energy is for everyone
Regardless of the size of their business, every professional seeks to minimize their expenses without compromising the quality of the services provided. As seen from the examples above, the shift to green energy and the utilization of renewable sources for electricity generation represent an easy and quick way to reduce monthly operating costs, with the entrepreneur now being called to decide how to allocate the money they have saved.
Business photovoltaics from ΙΩΝΙΚΗ Renewables
At ΙΩΝΙΚΗ Renewables, we have experience in the study and installation of photovoltaics. We have installed photovoltaic parks as well as systems for residences and businesses throughout Greece, including islands. We handle all the processes, from potential financing to the study, the submission of the application, the installation, and we deliver your photovoltaic system turnkey.
Are you interested in photovoltaic; Click on the button “I Want a phone appointment” below, fill out the form and a competent engineer will contact with you to solve all your questions and to guide you to the right decision.
Read also
