OFFICIAL PUBLICATION OF THE Illinois Automobile Dealers Association

Pub. 11 2021 Issue 3

Solar-Power-car-lot

Solar Power May Play a Bigger Role for Dealers

Illinois Auto Dealer Magazine logo

This story appears in the
Illinois Auto Dealer News Magazine Pub 11 2021 Issue 3

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You may have considered solar in the past, and for whatever reason – timing, costs, logistics, or even disinterest – it did not make sense for your dealership. It is time to look again. Solar is the future for car dealerships, and that is a fact we stand behind.

Consider this: according to the NADA, auto dealerships use on average 18% more energy than typical office buildings. Lighting outdoor lots, running technology-enhanced showrooms, and powering service center equipment can accumulate quite a power draw. Dealerships as a whole spend almost $2 billion in annual electricity costs.

So, it makes sense that several auto dealerships are going solar.

Why Solar?


Let us start with the basics. Benefits include:

  • Reduced operating costs thanks to thousands of dollars of savings on monthly electricity bills
  • Lower tax liability with the federal solar investment tax credit (ITC)
  • High internal rate of return on a long-term warranted asset
  • Hedge against rising energy costs
  • Marketing and PR opportunities related to sustainability efforts with a lower carbon footprint (even if saving the polar bears is not high on your list of priorities, it likely is for a sizable fraction of your buyers. Take the edge and use it wisely.)

Why Solar for Auto Dealers?


As mentioned above, auto dealerships use approximately 18% more energy than typical office buildings. Toss in the fact that electricity is one of the most significant cost factors for businesses and you’re looking at the potential for substantial savings for decades to come. In addition, for dealerships, energy is usually the third-highest overhead expense. To top that off, EV charging stations are on the horizon, and with them, unwelcome spikes in your energy use – and your electricity bill. More expense certainly, but not if you take action now and turn your roof into a viable profit center.

Rooftop solar is quickly becoming the standard for commercial buildings whose owners opt for solar. Of course, large, flat roofs are ideal, but what is appealing is being able to reduce your electricity bill while hedging against future energy costs and concurrently making a profit. The untapped savings from solar is equal to two to three more vehicles sold per month. Stretch that out across several decades, and, well, you get the idea.

Some auto dealers see their hefty monthly electric bill as another fixed expense, but this does not have to be the standard. A solar power system helps drive down those energy costs by enabling more on-site energy production and, thus, optimizing a dealer’s bottom line.

Solar installations are also an excellent way to boost a dealer’s brand. Customers want to patronize businesses that share the same values, and eco-conscious customers will appreciate that an auto dealer is committed to helping power the local community using clean, renewable energy. In addition, the growth of electric and alternative fuel vehicle sales indicates automotive buyers’ increasing support for eco-friendliness.

For instance, a Nissan dealer in Boulder, Colorado, experienced this brand boost after adding solar panels to the roof of its facility. Ted Christiano, the general manager, noted, “Customers are choosing us over the competitors because we are demonstrating our concern for the community and environment by going solar.” Investing in a solar power system sends a statement to any potential customer that your business cares about the environment. Besides the increase in customer traffic, Boulder Nissan dropped its energy use by 20% and now charges their substantial Nissan Leaf inventory with solar power.

According to industry experts, the transition is coming. According to a Bloomberg New Energy Finance report, EVs stock will increase to 548 million worldwide – or 32% of all passenger vehicles – by 2040. While this is good news for reducing carbon emissions that contribute to global warming, this presents a fundamental question for auto dealers and consumers: How will an entirely electric vehicle fleet be powered?

There’s no question that those EVs will increase the demand on the grid and, ultimately, the need for clean, affordable solar energy. It just makes sense: Homeowners and business owners who go solar will not have to worry about finding a charging station and can lock in the price they pay to power their EVs in the face of rising energy costs. According to the International Energy Agency, electricity demand from the global EV fleet could increase tenfold by 2030 compared to 2018 levels.

Savvy auto dealers are choosing to go solar now to get the best incentives. However, they know that the inevitable shift toward EVs will mean more on-site chargers are needed. The increased power demand will eventually only cost them more in utility costs.

And that makes it clear: Solar energy is a good choice for saving money and helping the environment. It positions auto dealers well for a transportation future that will be increasingly electric.

Auto Industry Embracing Solar


In 2012, Luther Auto Group, the largest privately owned automotive group in the Midwest, decided to make a dent in its electric bill by partnering with SunPower to install high-efficiency SunPower® solar systems on 10 of its 33 dealerships, adding about 454 kilowatts of solar. Using the 30% Federal Investment Tax Credit (ITC) and other tax depreciation benefits, the company saved approximately 55% on installation costs. Rebates from the local power company saved them another $292,000 in project costs. Best of all, the solar systems are expected to save Luther Auto more than $45,000 each year.

“It’s clean power on ‘unthought of’ spots,” says Linda McGinty, Luther Auto’s vice president of real estate. “On top of a car dealership surprises people.”

Is Solar Right for You?


All you need to do is ask your office manager or accounts payable clerk to scan and send your last 12-months of utility bills. Then, we team with the nation’s top dealership solar experts who will effectively identify where you are losing money, where you will make money, and how to best leverage solar technology to reduce operating costs immediately and for years to come. Here is what to expect:

  • Our team will provide a no-cost feasibility analysis based on 12-months of your dealership’s trailing utility bills.
  • Your analysis will include all tax incentives and subsidies and detail the options unique to your store so you’ll be able to make an informed decision.
  • We will explain all the variables in your solar proposal that impact ROI.

OK, But Again, Why Now?


A common question and we hear it all the time. If you wait, you’re giving all your money to the utility company versus creating ‘My Power Company LLC’ (similar to an F&I reinsurance concept) and reaping the financial benefits for years and years to come. Your CPA can identify the LLC entity/shareholders that will benefit from incentives and tax appetite. You’ll lease the equipment and sell the energy back to the store, saving on monthly energy costs while the LLC creates an off-balance sheet revenue for 25+ years. Win-win.

Contact APPI Energy today at 800.520.6685, info@appienergy.com or www.appienergy.com.

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