Solar has become all the rage in residential neighborhoods, but what about setting up Tesla solar for your office? Tesla announced its commercial solar program in September 2019 in California, giving business owners the option to either purchase or rent a solar system for their office and powering the business with clean, solar energy.
Setting up a Tesla solar office in California is easy and can be done either by purchasing the solar panels upfront or renting them through Tesla’s subscription program. The costs depend on how large the kilowatt solar panels are and what potential tax incentives are available.
There are two options to set up your Tesla solar office – purchasing the commercial solar system or entering a monthly subscription program. Read on to figure out which one is beneficial to your office so that it can become a Tesla solar office, lower your office’s carbon footprint, and reap the benefits over time on your electric bill.
Commercial Solar System for Your Office
The first option to set up Tesla solar for your office is actually purchasing the Tesla commercial solar system. Tesla offers three commercial solar panel system sizes, and the choice will depend on the needs of powering your office efficiently over time. Tesla estimates an 8 to 12 percent return on the investment depending on utility rates.
- 40 kilowatt solar panels – $88,600 – $23,036 federal tax credit = $65,564
- 120 kilowatt solar panels – $192,360 – $50,014 federal tax credit = $142,346
- 240 kilowatt solar panels – $345,560 – $89,846 federal tax credit = $255,714
There is a 26 percent federal tax credit offered when purchasing environmentally-friendly energy options. In addition to equating this federal tax credit the government offers both residential and commercial purchases of solar, Tesla calculates the potential estimated savings on your electric bill over the 25-year warranty period:
- 40 kilowatt solar panels – $287,000
- 120 kilowatt solar panels -$651,000
- 240 kilowatt solar panels – $1,302,000
If the numbers listed above seem pretty cheap for a large number of kilowatts your office could receive, it is because Tesla’s commercial prices are low. Commercial solar is actually less expensive than residential solar because it costs less to install the larger solar panels. Just look at the comparison to the residential options available by Tesla:
- 4 kW system size costs $8,200, or $2.04 per watt ($6,068 with 26% federal deduction)
- 8 kW system size costs $16,400, or $2.01 per watt ($12,136 with 26% federal deduction)
- 12 kW system size costs $24,600, or $2.01 per watt ($18,204 with 26% federal deduction)
- 16 kW system size costs $32,800, or $2.01 per watt ($24,272 with 26% federal deduction)
When comparing the setup of a Tesla solar office to a Tesla solar home, purchasing the solar panels outright seems like the way to go. By offering only three options for commercial solar (and four for residential), Tesla has streamlined and simplified the ordering process. Prices are also transparent when it comes to ordering solar panels.
In addition to the federal tax credit that basically takes 26 percent off of your solar panel purchase, the federal government’s Modified Accelerated Cost Recovery System (MACRS) allows business owners to depreciate the capitalized cost of your solar system over a specific period of time through annual tax deductions.
Through the MACRS savings, you will essentially depreciate the costs of your solar systems over a certain amount of time. Each year of the depreciation, you will receive deductions on your tax bill until the solar panel investment is fully depreciated. This federal tax incentive could save you a significant amount of money over time.
There are also local incentives for offices in California that should be researched depending on where your office is located. For example, if your office is located in the San Francisco area, you can take advantage of their GoSolarSF incentive program and receive $200 for each kilowatt of commercial solar you install:
- 40 kilowatt solar panels – $8,000 in savings
- 120 kilowatt solar panels – $24,00 in savings
- 240 kilowatt solar panels – $48,000 in savings
Combining federal and local tax incentives could really bring down the cost of your Tesla solar office while gaining all of the benefits over time. However, if you do not mind forgoing those savings and reducing what you need to shell out upfront, you could look into the Tesla solar subscription program to make your office into a Tesla solar office.
Solar Subscription Program for Your Office
Even though Tesla is offering pretty low costs for their solar panels compared to their competitors, putting up anywhere from $65,564 to $255,714, even with the federal tax credit, depreciation tax savings, and any additional local incentives, could be intimidating and even discouraging for a small office owner looking to go solar.
Tesla has addressed these intimidations by offering a subscription program that allows you to set up a Tesla solar office without daunting upfront costs involved in owning the solar panels. This is similar to the Tesla rental program for residential homes in certain states in which you can install solar panels on your office roof through a contract.
How the subscription program works is that your pay for each kilowatt-hour your solar system produces as a monthly rental payment to Tesla. Tesla has estimated its smallest, 40-kilowatt solar panels to produce 4,330-kilowatt hours per month. The monthly kilowatt-hour rental fee goes down when you purchase a larger solar system:
- 40 kilowatt solar panels – $0.129 per kilowatt hour ($558.57 for 4,330 kilowatt hours per month)
- 120 kilowatt solar panels – $0.109 per kilowatt hour
- 240 kilowatt solar panels – $0.099 per kilowatt hour
Note that Tesla’s Powerwall battery system is not included in the above rental prices. A Powerwall battery stores your solar energy during the daytime, off-peak hours and then discharges them during the more expensive peak hours. This may not be important to a daytime business, but the Powerwall is how you can get energy during a power outage.
Can I Change My Plan?
When you enter into the Tesla subscription plan, the owner of the solar panels is Tesla, not your company. Therefore, any federal tax incentives, including the 26 percent tax deduction and the MACRS depreciation incentives, go to Tesla as the owner. Therefore, you may find you want to purchase solar panels and reap the federal tax benefits.
If you decide you really like having a Tesla solar office, Tesla will allow you to purchase your Tesla subscription plan. The purchase price will depend on the following factors:
- The current price of the system
- The age of the system
- Any deterioration
You will be given the solar panel system’s fair market price. This price will probably be lower than the pricing for a brand new solar system.
On the other hand, if you decide setting up your Tesla solar office is not for you, you can suspend your monthly subscription and leave the panels on the roof at no cost. If you choose to have them removed, you will need to pay a removal fee to cover the time needed to remove the solar panels and repair any damages that may have occurred.
You do not need to have Tesla remove your solar panels if you decide to end your subscription. Therefore, you may want to compare the prices of a qualified electrical contractor and what Tesla would charge to remove your rented solar panels and repair any damages that may have been inflicted on your office’s roof.
Turning your office into a Tesla solar office is definitely doable, either by purchasing the solar panel system outright or going down the route of entering into a solar subscription. You could even take out financing at a low-interest rate, purchase the solar panels, and then reap the federal and local tax incentives.
Whether you purchase your solar panels upfront, rent them through a subscription, or do a combination of both over time, you will be setting up a Tesla solar office, helping the environment and lowering your carbon footprint, and saving on your office’s electric bill for years.