What’s the case for solar powered hotels?

Solar panels on the carport in Bakersfield

Solar panels on the carport in Bakersfield

As the rise of renewable energy sees more of the planet’s power each month being produced sustainably, Alan Russo of REC Solar asks whether adding photovoltaic panels to your property can help reduce your energy bill.

In the US, total solar installations hit the one million mark in February. Total industry growth is projected to hit a staggering 119% this year. As the solar market in the States expands logarithmically, the costs of installation are plummeting. Solar is now more cost-effective than ever, offering a number of compelling financial and environmental benefits for the hospitality industry. Solar technologies have been proven over decades in the field, and are becoming increasingly efficient, reliable, and affordable. Large corporations are investing billions in the industry, powering a record number of installations in 2015.

Hotels too can reap the benefits of renewable energy in both the short and long terms. Lighting, HVAC and water heating accounts for approximately 60% of the total costs for a typical lodging facility. The U.S. Energy Star program estimates that hotels spent about $2,196 per room annually on energy alone. Hotels are eager to reduce their energy bills as well as their carbon footprints and business guests increasingly demand hotels be more sustainable.

Many hotels have invested in technology to reduce their power consumption. Whether it’s a switch to LED lighting, more efficient kitchen and laundry equipment, key cards which deactivate power in the room or movement sensors in corridors, there’s a wide array of actions that will shrink a property’s carbon footprint. But how many hotels look at the other end of the equation in terms of the origin of the power itself? For many, a well-designed solar photovoltaic system can significantly lower energy bills with the side benefit of providing additional cooling for your building or outdoor spaces with the shade provided by the array.

But how can hoteliers estimate whether the investment will work for them? There are a number of "hard" benefits that are easy to predict and measure, like the U.S. solar Investment Tax Credit (ITC), which was recently extended through 2023, the kilowatt hours produced by the system and the resulting monthly energy savings. For example, the Hampton Inn in Bakersfield, CA was able to take advantage of the 30% federal tax credit from ITC to build a 102kW solar system for its property. In addition to the tax credits, the hotel was able to generate more than 13,000 kWh per month and lowered its energy bills by 35-45%. This solar system saved the hotel an average of $7,400-$8,800 per month.

There are also many "soft" benefits that relate to customer experience or public perception of your property - adding carports for shade, additional outdoor lighting at night, and charging ports for electric vehicles, as well as adding local jobs and contributing to your overall sustainability mission or green marketing efforts.

In the current climate and with a federal push for greater sustainability, it’s a great time for hotel owners and property managers in the US to slash energy costs while going green by installing solar. That said, any maturing industry will see consolidation and growing pains from time to time, as the recent bankruptcy filing of SunEdison - one of the largest solar developers - demonstrates. This news might make investors nervous if considering a solar installation for their property, but there are some easy measures that will ensure you choose a solar company that can provide the service your hotel requires for the lifetime of your installation.

Even if your company has already selected a developer or installer, the guidelines below can help confirm if you are on the right track to finding a stable and sustainable solar energy partner:

  1. Track record. Check out the length of time in business — the longer the better. Ask your salesperson how many failed/unbuilt contracts the company has accrued.
  2. Financial strength. Are they cash flow positive or profitable? Can they weather an occasional downturn? Take a look at financial backing or the stability of a notable parent company or partner. For publicly traded companies like SolarCity, you can take a look at their earnings and analyses to review any skepticism about their financials. If the company is private but owned by a parent company, look at the financial strength of the parent.
  3. Delivering as promised. Request operations statistics, including first-year system performance, on-time delivery of projects and project cycle times. It’s always good to ask for existing customer referrals to get a real sense of how the project went from their perspective. Companies should have good monitoring capabilities and be able to explain how their maintenance teams are deployed.
  4. Customer base. Look for experience working with big brands in your industry, which will have already done some extensive vetting for you in choosing their partners. Ask for case studies to get a broader idea of how solar technologies can be deployed on your property, as well as what the precise benefits will be.

While the bankruptcy of an industry trailblazer has many wondering what the future holds, experts and participants in the renewable energy field anticipate continued strong growth. Solar energy is a strong investment for many hotels around the world, and with the guidance of an experienced installer, can yield many benefits for years to come.

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