Covid-19 has caused many retailers worldwide to close their shutters, while other businesses are bracing for a huge supply chain fallout. Unemployment rates are expected to soar, as business owners struggle to keep their companies afloat.
It is inevitable that the world will soon be heading into a recession. So how will solar power help your business survive an economic downturn?
1. Zero Cost Solar PV System Scheme (Free Solar Panels)
This basically means that you don’t need to pay a single sen for the PV system, but immediately enjoy about 30% savings on your electricity bill; through a Power Purchase Agreement (PPA). However, this is more applicable to factories or warehouses that have a high electricity consumption, and a substantial rooftop space. More information can be found in a previously written article on Zero Cost Solar Power Systems.
The savings from your electricity bills will instantly provide extra cash flow for more critical elements of your business, or even to scale up your business. As the saying goes, in every crisis there’s opportunity.
This may be the difference from letting go of the people who have helped build your business — your employees. This may also provide additional funds for advertising and marketing, giving a much needed boost to your sales. You may finally be able to invest in machinery to automate your business, effectively reducing the workload of your depleted human resource.
2. Outright Purchase of Solar PV System
This will be more relevant for businesses that have enough cash reserves in the bank, as PV systems are a considerably large investment. However, there are many incentives / benefits that will make this an attractive investment, such as:
- Government tax incentives
- Easing up of monthly cash flow
- Possibility of avoiding maximum demand charge
Currently, our Malaysian government is offering tax incentives for businesses adopting solar power for up to 48% of the entire cost of the system. That’s akin to getting almost a half price discount for the PV system, essentially reducing your payback period (ROI) by almost half as well. Find out more on all the incentives / benefits in a previously written article here.
Typically, the payback duration for a PV system for businesses is between 2 and 4 years. Granted, this is akin to paying your electricity bills in advance for 2 to 4 years, and may not be a solution to businesses that need relief now. However, if there is an available budget, it will be wise to invest in PV systems now.
Because business owners who have already done so before are fully enjoying its benefits now. Some of these businesses have installed a PV system large enough to save them almost 100% of their electricity bill. This essentially gives them that much needed cash flow now to survive the current economic downturn, especially after Covid-19.
3. Power Purchase Agreement Between Landlord And Tenant
If you are a landlord, either as an individual or as a company, you should install a PV system on your investment properties. Find out more in a previously written article dedicated to landlords.
Additionally, if you are a landlord running as a company, the government’s double tax incentives will still apply to you. On the other hand, there is no government incentive available for landlords operating as individuals. However, there are still many attractive benefits such as:
- Monetising unused rooftop space.
- Happier tenants with cheaper electricity bill.
- Branding for tenants as a user of renewable energy.
- Increased earning from property portfolio.
- Increased value of properties.
As we battle through Covid-19, one of the worst pandemics the world has ever seen, there’s an economic disaster that is lurking around the corner. Protecting your cash flow will be key, as it is the ‘oxygen’ that will keep your company alive. If you have read this far, get in touch with us so that we can help you save money with solar PV technology. Our SEDA certified Solar PV Engineers will be glad to respond to any questions you might have.