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Solar for Self-Storage: I'm here to answer your questions

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  • Solar for Self-Storage: I'm here to answer your questions

    Hi There,

    I'm Aubrey Lethbridge, a Commercial Solar developer with Freedom Solar Power. We've done about half a dozen Self-Storage projects and I think it is a great potential industry for solar adoption. I've seen some really great posts among the community about solar, and I am excited that everyone here is dedicated to giving each other helpful, accurate, straightforward info. In that spirit, I wanted to offer my assistance as well.

    I'd love to help you get a little more knowledge on the topic of solar. So, if you please, what are your biggest questions about how solar works?

  • #2
    Hey Aubrey - I am pretty experienced with residential solar. I have two houses with net-metering that bring my power bill down to a pretty low average amount.
    My question for storage is this: I have pretty small power bills at all the facilities. Is it worth trying to offset a $50-100 per month power bill with net-metering? Would I then be selling power back to the grid? Thanks. Tim

    Comment


    • #3
      Originally posted by helenatim View Post
      Hey Aubrey - I am pretty experienced with residential solar. I have two houses with net-metering that bring my power bill down to a pretty low average amount.
      My question for storage is this: I have pretty small power bills at all the facilities. Is it worth trying to offset a $50-100 per month power bill with net-metering? Would I then be selling power back to the grid? Thanks. Tim
      Hi Tim,

      That is an excellent question. As a short answer, I will say that generally, larger usage and monthly bills are going to be easier systems to get built. From your perspective as a business owner, larger systems will benefit from economies of scale, so the payback period, the Internal Rate of Return (IRR) and long-term savings will be more exciting. From a solar installer's perspective, every project requires a similar amount of design, engineering, procurement, permitting, and interconnection work, so installing 1,000 panels on a single rooftop is a lot easier than installing 10, 100-panel projects.

      Having said all of that, a smaller system means it will also cost a lot less in terms of initial capital investment. So it may be an easier project for you to get off the ground. I would also add that there are a couple of key differences between Residential and Commercial solar you should be aware of (kudos to going solar on your homes, by the way!). Commercial projects can be depreciated just like any other business investment, and the depreciation schedule will be on either an "Accelerated" 5-year track or a "Bonus" 1-year track. There may also be separate utility rebates or business grants available for you.

      And when solar saves your business money, it is essentially adding NOI to the business, which increases the overall business value. Given all of this, I think it could still be worthwhile for you to install solar, but I'd encourage you to vet the right installer, with a focus on one that will give you great attention despite the system's small size.

      I'm happy to answer any follow-up questions, but I'll also point you in the direction of a solar system at Deer Creek Mini Storage in Cabot, AR. Here are a couple of articles about it, including one by Alese Stroud, the facility owner, on their considerations when going solar.

      https://www.insideselfstorage.com/eco-friendly-storage/deer-creek-mini-becomes-central-arkansas-1st-solar-powered-storage-facility

      Comment


      • #4
        Here's the second article:
        https://www.insideselfstorage.com/ec...s-self-storage

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        • #5
          Solar can work large and small. Here is an article I wrote for ISS several years ago on my conversion to solar power. https://www.insideselfstorage.com/ec...es-his-insight

          I can say 6 years later that things have gone as expected, and my 2 locations with net metering are 100% paid for. My other location has net metering cashed out each month, so it will take a little longer to pay back.

          The panels I installed have survived baseball sized hail and 130 mph winds.

          Yes it is true a larger system with true net metering will have a much faster pay off, but I think it is still worthwhile to do a smaller system.

          I made sure I installed quality panels with a 25 year warranty and expected 40 year operational life. A smaller system may not be an amazing deal, but it is still a good deal.

          One of my facilities I purchased in 2003, had interior hallways that could be converted to climate controlled units. We decided to go with geothermal for heating and cooling due the already existing, and functioning well on site. Not to mention the tax breaks for adding that technology at the time were very advantageous.

          This lead to about $1000 a month electric bills on average. I have wiped that out completely with the 166 solar panels I installed on the roof. My monthly bill is now $20-$25 per month, and as I mentioned before the system is now paid for.

          Comment


          • #6
            Randy, thanks for your perspective and sharing this article. I admire that y'all had the grit and wherewithal to self-install your system. Obviously, it helps to have an owner who is a master electrician. But I can see why you bring so much insight into this topic!

            HelenaTim - As a first step, I would call your utility company and ask to speak to their solar person. Then ask that person about whether they net meter, and what their buyback policy is. That will tell you what happens to the electricity you send back to the grid and is crucial to figuring out the size and feasibility of your solar project.

            Comment


            • #7
              We've put dozens of hours into researching dead ends and talking to solar companies and can't seem to make the numbers work. Oregon doesn't seem to have any commercial solar programs, and it looks like the only non-residential tax breaks I can find are being cut in half at the end of this year. Is there anything you can point us to? USDA loans seem focused on rural properties, and the ITC looks like it's focused on residential installations. Thanks in advance!

              Comment


              • #8
                Originally posted by Thomocracy View Post
                We've put dozens of hours into researching dead ends and talking to solar companies and can't seem to make the numbers work. Oregon doesn't seem to have any commercial solar programs, and it looks like the only non-residential tax breaks I can find are being cut in half at the end of this year. Is there anything you can point us to? USDA loans seem focused on rural properties, and the ITC looks like it's focused on residential installations. Thanks in advance!
                Hi Thomocracy,

                While Oregon can be a challenging market because there is an abundance of low cost hydropower, we have done a couple projects there. The ITC and MACRS depreciation are federal programs that are very beneficial to commercial projects. The ITC, or Investment Tax Credit, is a tax credit that is used to reduce the federal taxes you owe through the business. It is a little confusing, because as of August 2022, the ITC was set to step down from 26% to 22% next year. However, the Inflation Reduction Act increased the ITC to 30% and it will stay that way until the end of 2032.

                MACRS depreciation is an accelerated depreciation schedule for solar. It allows you to depreciate 80% of the value in year 1 and 20% over 5 years after that.

                Other than that, we'd have to really look at your utility specifically, and do a feasibility study to see what we can find locally and on the state level that might benefit your business. I'll send you a private message with my contact details in case you'd like to do a deeper dive with us.

                Comment

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