Solar power—to rent or to buy?

While solar energy is by no means a new technology in the U.S., just 5 percent of restaurant operators in a National Restaurant Association survey said they use solar panels in their own facilities.

That may be about to change. In December, Congress voted to extend the 30 percent federal tax credit for businesses that invest in solar energy through the end of 2019.  With big names such as Sonic Drive-In partnering with local energy providers through rebate programs, and solar-powered food trucks hitting the road, it could be prime time to catch some rays—but only if the investment is reflected in the bottom line.

Helen Cameron and her husband own two Uncommon Ground restaurants in Chicago. Five solar panels atop each restaurant draw in and store enough energy to heat all the water needed for daily operation.

The Camerons’ foray into solar coincided with the construction of Uncommon Ground’s second, 4,000-square-foot location in 2007. A rebate and tax credit got the Camerons a 40 percent reduction in cost on their $30,000 system, and they were able to finance the rest in less than four years, later adding the same set up to Uncommon Ground’s original location.

Renting panels also is an option—though one Atlanta consultant says that in 90 percent of cases, buying is more economical. Operators who aren’t ready to make such a permanent investment can set up a third-party ownership model, in which the panel’s owner installs them on the roof and supplies power at a discount. However, in that case, the third party that likely will receive a tax credit—not the operation.

“It’s important ... to meet with a variety of different companies to see what they offer,” Helen Cameron says. “They can tell you what’s available as an incentive and what’s coming up.” 

A version of this story appeared in the April issue of Restaurant Business magazine, FoodService Director’s sister publication.