The Solar Opportunity
The Solar Energy Value Proposition Equation (fn of):
Irradiance + Utility Rates = Value of Solar
Irradiance
+
Utility Rates
What is the COST of utility-supplied electricity that Solar will displace?
=
The highly predictable energy production projections of the solar array times the avoided utility energy costs, taking into account projected utility energy cost inflation, amounts to the
Value of Solar
Isn’t Solar too expensive?
The cost of installing PV solar energy has halved in five years, according to the U.S. National Renewable Energy Laboratory. In fact, the Solar Energy Industry Association (SEIA) reports that the cost to install PV solar has dropped by more than 70% since 2010. In addition, module and system efficiencies continue to improve.
Solar generated electricity is at parity with utility-supplied power in many markets in the United States.
Five Ways Solar Energy Can Save You Money
1. Solar can reduce your electricity cost spend.
On-site solar generated energy displaces the consumption of kilowatt hours (kWh) purchased from your electric utility. Each kWh consumed from an on-site PV system is one kWh not purchased from your electric utility, thereby reducing the Energy Charge from the utility. The cost of PV solar has dropped to the level whereby solar produced electricity is below or at least competitive with utility supplied electricity in many markets. For Time-Of-Use markets, solar is producing electricity at the time of the highest pricing segment, thus offsetting the highest Energy Charges.
2. Solar can hedge against electric utility cost volatility and inflation.
Solar is uniquely able to offer fixed cost power over the 25 - 30 year lifetime of the equipment, due to the absence of variable fuel input costs. Using solar enables a company to hedge against utility cost inflation and volatility, and thereby improve certainty and stability of financial results.
3. Solar can accomplish peak shaving, to reduce utility demand and capacity charges.
The daily performance curve of solar energy systems is highly correlated to the load profile of many commercial and industrial customers, meaning that solar systems are producing the most power at the times when the company is consuming the most power. This results in a reduction in the Demand Charge for commercial and industrial customers. The specific impact on a company’s Demand Charge may be ascertained by evaluating the interval load data and other historical consumption data.
Moreover, in the PJM region, a portion of the utilities Energy Charge is comprised of a Capacity Charge. This charge is calculated on a company-by-company basis, and is a function of the total consumption by that company during each of the five highest consumption hours in the entire PJM region. Historically, these five highest hours have been in the June – August timeframe, and in the late afternoon.
As you can imagine, these are the most productive hours for solar energy systems, so the extent to which on-site solar is reducing a company’s load may result in lower Capacity Charges for that company for the entire year.
Capacity Charges are set by the annual Base Residual Auction. BRA rates in the PJM territory were up over 800% in 2024, signaling significant inflationary pressure in 2025.
4. Solar can contribute to achieving corporate sustainability goals.
Customers are increasingly asking for environmentally responsible corporate practices, and insisting on measurable, tangible evidence of action. Many large companies are finding that broad principles and platitudes are no longer enough.
Solar tells a story, is simple, and has little NIMBY resistance, as with other renewable technologies. Solar production is easily measurable and translatable into environmental equivalencies.
In certain markets, Solar also generates renewable energy credits, carbon credits or green certificates, which may be sold or retired for corporate purposes.
Solar is often considered the most cost effective means by which to achieve carbon emissions reduction goals for corporations with carbon reduction strategies.
5. Solar can contribute to grid modernization and energy independence objectives.
Solar is expected to play a key role in grid modernization and a further shift towards distributed generation. With the cost of storage, including battery technology, declining rapidly, the notion of off-grid energy independence is conceivable.
How can I get Solar for my Organization?
SOLSCIENT has longstanding relationships with renewable energy-focused investor groups and traditional financial institutions. We can facilitate PPAs, ESPCs, Leases, or invest directly in your Organization’s Solar Project.
Customer Owned Systems
The ownership of a solar energy system affords certain tax benefits and other incentives which serve to reduce the up-front capital cost and accelerate the payback period for an investment in solar. SOLSCIENT ENERGY can model your energy cost structure and help your organization determine the ROI and payback for a solar energy system.
Energy Saving Performance Contracts (ESPCs) are similar to PPAs inasmuch as they allow for the benefits that solar energy provides without the burdens of ownership. ESPCs are oftentimes coupled with other energy efficiency initiatives, such as LED lighting retrofits.
Equipment Leases are financing alternatives which serve to spread the cost of the solar energy system over time, often largely offset by the energy cost savings from the system.
