With 2025 on the horizon, energy costs are predicted to climb due to market factors, regulatory changes, and rising demand. Increases to energy expenses can place significant pressure on businesses of all sizes, affecting both operational budgets and long-term growth plans. One powerful strategy for managing this volatility is investing in commercial solar energy. Many businesses are seeing a 2-4 year ROI in most cases. By generating your own clean energy on-site, commercial solar offers businesses a way to lock in stable energy costs, improve budget predictability, and reduce reliance on increasingly costly grid power. Here’s why now is the time to consider solar as a shield against rising energy costs—and how it can positively impact your bottom line.
Why Energy Prices Are Expected to Rise in 2025
Increased Demand: The ongoing electrification of industries, homes (heat pumps) and transportation (EV Chargers), combined with population growth, has increased the demand for electricity. This higher demand leads to cost surges, especially during peak hours.
Inflation and Operational Costs: Rising operational costs for utilities—including infrastructure upgrades, maintenance, and fuel expenses. This is often passed down to consumers in the form of higher rates.
Weather-Related Grid Strain: Severe weather events such as heatwaves, wildfires, snow, and high winds put extra stress on the grid, causing temporary wholesale price hikes and, in many cases, sustained increases as utilities rebuild or reinforce infrastructure.
How Commercial Solar Protects Against Rising Energy Costs
Commercial solar provides a hedge against unpredictable electricity rates by allowing businesses to generate their own power. Here are the key ways solar can stabilize energy costs:
Fixed Energy Costs: By installing solar, businesses can essentially “lock in” their energy production costs, shielding themselves from utility rate hikes. Once a solar system is installed, the cost of generating electricity remains largely fixed, particularly with low maintenance and operational costs.
Peak Demand Cost Reduction: Solar energy generation peaks during daylight hours, often overlapping with high-demand periods when electricity rates are highest. This overlap allows businesses to reduce reliance on grid power during these costly hours, directly lowering energy expenses.
Net Metering Benefits: Net metering policies allow businesses to sell excess solar energy back to the grid, offsetting energy costs. These programs provide an additional cost-saving benefit for businesses with surplus production capacity.
Additional Benefits of Industrial Solar
Beyond direct cost savings, commercial solar offers additional advantages that further support the case for investment:
Enhanced Resilience: When paired with battery storage, solar systems can provide backup power during grid outages. This energy resilience can be critical for businesses that rely on continuous operations, such as data centers, manufacturing plants, or retail stores.
Increased Property Value: Properties with solar installations can have higher property values, making commercial real estate more attractive to future buyers or tenants. Solar installations can also give property owners leverage to charge higher rents by offering lower energy costs to tenants.
Sustainability and Brand Image: More customers are looking to support businesses with sustainable practices. Investing in solar enhances a company’s commitment to sustainability which can boost brand perception.
Available Incentives and Tax Benefits for 2025
Investment Tax Credit (ITC): The federal ITC allows businesses to claim 30% of the installation cost as a tax credit, significantly reducing upfront costs.
Accelerated Depreciation (MACRS): The Modified Accelerated Cost Recovery System (MACRS) enables businesses to depreciate the solar system over a five-year period, which can improve cash flow and reduce tax liability.
State and Local Incentives: Many states offer additional incentives, rebates, or renewable energy credits (RECs) that further reduce the cost of solar installations.
Why 2025 is the Right Time to Invest in Commercial Solar
Incentive Reductions: Federal and state incentives can change over time, and some may phase out or decrease. By investing in solar now, businesses can lock in these benefits and potentially expedite their return on investment.
Leverage Depreciation and Tax Credits: Taking advantage of incentives like MACRS depreciation and the ITC can help businesses see a faster payback on their solar investment, improving cash flow and allowing for a quicker transition to cost savings.
Budget Stability for the Future: Solar energy provides a predictable source of power, which can stabilize operational budgets in an era of rising and volatile energy costs. Solar locks in energy costs, allowing businesses to plan more confidently for future expenses.
Businesses are considering commercial solar energy due to rising energy costs in 2025. With long-term savings, increased energy resilience, and valuable tax incentives, solar provides a smart way to stabilize energy expenses and shield against the volatility of grid prices. As energy costs continue to rise and the grid becomes more strained, businesses are increasingly looking for ways to take control of energy costs. By investing in solar now, companies can position themselves for significant financial and operational benefits, ensuring both sustainability and profitability in the years to come.
In an era where energy costs are set to increase, businesses that invest in solar today will have a competitive advantage in managing expenses tomorrow. The question isn’t whether you can afford to go solar—it’s whether you can afford not to. Here at Smart Roofs, we offer cost effective and reliable solutions for solar projects to our customers. Reach out to us to find out how we can help you go solar, while saving money!