Commercial Solar Installation Guide: 7 Commercial Solar Panel Energy Checks

Solar powering their energy requirements instead of relying on the state’s grid can benefit them in at least two ways. First, their utility costs will be reduced. And the second is that numerous consumers are choosing to spend their hard-earned dollars with a business that is more climate-friendly over one that isn’t.

This article explains commercial solar installation features to check as well as why going green with this type of energy can deliver long term returns on the investment.

Solar Panels for Commercial Buildings Guide: Commercial Solar Panel Energy Checks

The majority of commercial and industrial solar systems are far bigger than the average design of solar panel systems for residential use, far heavier, and much more expensive.

Commercial solar installations have individual solar panels comprised of 96 cells or more compared to 60 or 72 cells for domestic dwellings. An average household would also only require between 17-21 solar panels whereas a business that is energy-intensive would need 60-70.

That figure could be considerably more for very large operations.

Each business enterprise would have to evaluate the initial financial expenditure versus the savings that they would recoup from adopting this renewable energy source.³

To help in the decision-making process, here is a checklist that would answer a few lingering questions and remove the doubts about disconnecting from the grid, and connecting to commercial solar power.

1. Financial advantage is one of the main allures for installing a commercial or industrial solar panel system. In a factory or small business, using solar energy to offset some or all of your electricity demand will immediately result in lower energy expenditures and electric bills.
   Additionally, solar panel systems can last for more than 30 years, and once your company has recouped the initial cost of the system, normally between 3-6 years, you can continue to generate free electricity from the PV array.
   You can expect solar panels to continue providing free electricity for decades as they often come with warranties of around 25 years.
2. There are government, state, and local incentives for businesses that offer rebates,⁴ and tax deductions. With just one of them, the ITC (Investment Tax Credit) up to 30% can be deducted from the purchase and installation price.
3. There are now finance options that were not available previously, again from many state and federal sources, that are worth enquiring about at each department.
   With just one of them, the ITC (Investment Tax Credit) of up to 30% can be deducted from the purchase and installation price. The Bonus Depreciation or the Modified Accelerated Cost Recovery System (MACRS) allows the overall costs to be written off to reduce the tax burden.
4. For business owners who are renting, an option is to reach an agreement with the landlord where the initial costs can be divided between the two entities. The tenant benefits from the savings on energy bills, and the landlord has extra value added to his property either for the next tenant on the retail price if the property is ever sold in the future.
5. If the cost of rewiring the entire building to accommodate the extra energy produced by a photovoltaic system is prohibitive, a solution is net metering. Instead of directing all of the electricity directly into the building’s system, re-directing it back into the grid would avoid that extra expense.
   It would benefit the company in two ways, reducing energy bills and gaining revenue from whatever excess energy is purchased by the local utility company.
6. Due to the weight associated with large PV systems, a complete roof replacement may be necessary. Fortunately, many commercial solar contractors have contacts with roofing companies and often offer discounts that can greatly reduce the overall costs of the entire job.
   At the time of gathering quotes, always enquire about the structural integrity of the roof and if there are any price reductions to either replace or reinforce it.
7. The influence that environmental issues have on potential customers should never be underestimated. Greenhouse gas emissions and climate change have to be mitigated and everyone has to do their part.⁵
   Potential customers are happy to be working with or buying products or services from a company that is contributing to the fight against climate change. In patronizing such an establishment, they, too, are doing their part.

Very large factories and fortunate SMBEs that own their business properties are making the changeover at a record rate, experiencing a 75% reduction in energy bills.

For some enterprises, that has meant a normal monthly utility bill of $1,950 has been reduced to $500.

With that level of savings, the payback period on a $100,000 solar investment would be paid back in about 6 years.

Commercial Solar Panels

Every single business owner wants to find ways to cut overheads.

Keeping the lights on and the engines turning on the factory floor, or hundreds of computers humming in the background, are non-negotiable elements that are unavoidable for many businesses.

Large conglomerates feel the pain of high energy bills just the same as small mom-and-pop stores. Either of these enterprises and all the millions of businesses in between can reap the benefits of investing in a commercial solar installation.

The choice to install solar is still a significant one, with upfront costs often a determining factor.

The pros and cons need to be studied to reach a reliable decision and, strangely enough, one of the pros in favor of relying on a renewable energy source like solar is that it will be stable.

Electricity supplied from the grid is constantly fluctuating and is often very volatile,¹ with no caps afforded business premises on the price increases, caps that are readily available for residential properties.

When the per unit for electricity goes through the roof there is no protection for business owners and they are left with no choice but to swallow the increase or raise the prices of their products.

The Energy Bill Relief Scheme in 2022 and the Energy Bills Discount Scheme in 2023 offered financial support to businesses, but no cap on the rates.

Because of this instability, more and more entrepreneurs are focusing their energy on solar power.

But it’s complicated.

Solar Panels for Business: Commercial Solar Installation

The acceptance of solar panels for business sectors has been slow due to these several factors:

• Although commercial premises consume more electricity than the average home, the price per kWh rate is cheaper.
• Business owners who are renting are reluctant to invest in installing a PV system on a property they do not own despite the potential rewards.²
• Access to financing is limited
• Not all premises have rooftops to install panels
• Location: A lot of business premises are in locations where they are overlooked by other buildings which can hinder the necessary access to sunlight required throughout the day, limiting the amount of exposure and energy absorption.
• Older rooftops can be a cause for concern, lacking the structural integrity to withstand the combined weight of a full PV system
• The electrical system on the premises may need to be upgraded to facilitate the extra solar power surge.

None of these obstacles to adopting solar energy as the primary source of electricity are insurmountable.

Commercial Solar Installation Guide: Commercial Solar Panels Cost

A specific commercial solar system design will typically cost up to $100,000 for a small firm and $1 million or more for larger ones that have significant energy requirements. Larger panels of 600 watts or 700 watts are used in these instances to generate more power and reduce costs.

They are more expensive, but they deliver greater amounts of electricity than standard-sized domestic panels of 300-400 watts and are just as easy to install. They are also heavier, but they don’t necessarily have to be rooftop-mounted.

Mounting the racking system on a portion of land close to the premises that receive hours of peak sunshine is an option if the roof is not stable enough, is not large enough, or is overshadowed.

Under this scenario, a different solar panel racking system would be used and extra wiring to connect to the property, but this has proved to be very successful on many occasions.

But what to do when, despite the programs available to help with purchasing the PV system, finding the funds remains impossible?

Even under this scenario, it is still possible to move forward with a Power Purchase Agreement (PPA).

This choice enables the purchase of the energy produced by the system in your facility without any upfront costs, but it will be controlled by a different entity through net metering.

A commercial solar contractor pays for the entire system installation on your premises under what’s called an onsite Power Purchase Agreement.⁶ The contractor retains ownership and control over the system and guarantees to supply electricity at a reduced cost during the duration of the agreement between both parties.

Although not as entirely beneficial as outright purchasing of a PV system, the business model of PPAs avoids the initial capital expenditure for the business owner, and the contractor gains a revenue source.

If at the end of the day, the roof is too unstable and there is no available land close by, all is not lost. There are still options in the form of an offsite commercial solar installation.

Offsite Commercial Solar Installers

An offsite solar system would not be installed on the buyer’s property, nor would they be the owner. They would, however, gain from the renewable energy generated from the industrial solar panels installed in a different location in the form of credits that can be applied to lower the energy expenses of their business.

Structured similarly to an onsite PPA, an offsite PPA is managed by a third party and is referred to as being ‘grid connected’.

Interested businesses are able to subscribe to this shared community solar project that is supported by both residential and business owners alike.

The solar arrays are installed offsite on local farmland, disused landfills that have been capped, or other large tracts of land.

These projects will be owned by investors, municipalities, entrepreneurs, or solar companies that will offer a couple of participation arrangements.

Subscription

The subscription plan tends to be the most popular as there are very low or no startup costs combined with flexible shorter-term options to stay affiliated with the program or not.

Every month, a pre-arranged discount would be applied to utility bills.

Investing in Solar Panels

A purchase plan affords more long-term savings potentials, where one or more solar panels can actually be purchased on the site.

Always enquire how many solar panels do I need for my business requirements before committing to purchasing any panels to ensure that the power delivered is sufficient.

There may be financing possibilities available for investing in solar farms under this type of scheme and the project itself would be able to advise where to apply for any grants or incentives.⁷

One of the main upsides for business owners renting their premises is the prospect of portability. In the event that relocation to larger premises occurs in the same service area, the agreement can easily be transferred to the new location with minimal disruption.

Are There Lease-Purchase Agreements for Solar Systems?

Yes. Some solar suppliers enter into agreements with commercial and residential owners.

A downpayment is required, and then details are agreed upon including monthly payments. At the end of term the ownership transfers to the lessee.

Related Reading: The True Cost of Leasing Solar Panels (Pros & Cons of Solar Leasing vs. Buying)

Commercial Solar Installation Companies

The opportunity of net metering electricity back to small enterprises and selling electricity back to the power grid itself has enticed entrepreneurs and investors into a new and lucrative business model. That of solar farms.

Over the last decade, this cutting-edge sector has increased at a phenomenal rate, from small communities forming cooperatives to cater to their local needs, to enormous solar farms encompassing thousands of acres of land to generate enough electricity for thousands of homes.

Solar farms, also known as solar parks or photovoltaic power plants, can be any size and shape and are typically mounted to the ground rather than rooftops, but that is slowly changing as the industry adapts.

All these types of commercial solar systems are classed as being “on the grid” since they are supplying electricity to a nearby utility facility.

The difference between community solar installations and larger utility-scale solar farms that have hundreds of thousands of solar panels, apart from the size, is location.

Small-scale solar plants produce 5 MW or less of electricity for the use of nearby domestic and business residences. Large-scale solar farms are more isolated and produce 180 MW or more of solar-generated electricity to cater to the energy needs of 30,000 homes.

Everyone who takes part in the program shares the distribution of the power supplies based on their investment or subscription level into the solar project, even someone who wants to have a solar panel in apartment.

Recently, commercial solar installations have taken a turn for the better, with entrepreneurs seizing on the opportunity of utilizing unused spaces on carports located in large parking lots.

This trend is expanding rapidly as expansive parking lots are generally in open spaces bathed in hours of sunshine. Installing solar panels on top of the carports is a novel idea that benefits small companies who wish to engage in the green and clean energy revolution,⁸ and sell residual electricity back into the grid at the same time.

The immediate benefit is that no additional space needs to be sourced, there is more flexibility in selecting the solar panels themselves, start-up costs are also greatly reduced as a stable structure is already in place, and they are easier to maintain and clean.

Carbon Footprint of Solar Panels

Solar panels are one example of a renewable energy source that helps fight climate change and carbon emissions.

According to analysts, solar technology will continue to advance technologically and in popularity throughout the ensuing 10 years.

However, the mining of materials and manufacturing of solar panels has a carbon footprint. Moreover, the disposal of the panels themselves after they are ineffective is also extremely energy intensive.

This is the reason solar power, in general, has a higher emissions rate than nuclear power.

At inception, energy is needed to power the equipment used to manufacture solar panels, and this process causes carbon emissions and requires hundreds of gallons of water.

This is due to a number of factors including but not limited to the types of solar panels that will be produced. Monocrystalline and polycrystalline are the two main varieties, and each requires different manufacturing procedures and processes that create varying degrees of carbon footprints.

Each cell is thought to require 11 grams of silicon and produces about 6.0 kg CO₂e/kg of silicon metal.

Other fine metals needed to make solar panels include copper, silver, indium, tellurium, and lithium for solar battery storage systems. The mining of these metals is partially responsible for the carbon emissions associated with solar panels.

The balance of CO₂e/kg contributes towards the carbon footprint generated through the manufacturing, transporting, and installation processes, whether installed on commercial or domestic premises or solar farms.⁹

Due to these mining and manufacturing methods, for the first few years of operation, solar panels are estimated to produce about 50g of CO₂ per kWh. Fortunately, once they are in operation, the majority of solar panels reach carbon neutrality after 5-10 years of use.

However, that applies to panels that are placed on existing structures.

When the panels cover large areas of land, the ecological impact can be severe.

In comparison studies, solar energy plants still produce about 20 times less carbon than electricity generated by coal-fired power plants, revealing that solar panels are a much cleaner alternative to coal when comparing the number of greenhouse gasses produced by coal mining to the quantity produced by solar panels.

Hopefully in the future greener renewable alternatives will be found to power the trucks, transport the modules, and mine the materials to minimize the size of the carbon footprint solar panels produce.

The Design of Solar Panel Incentive Programs

Reduced energy bills and independence from electricity produced from fossil fuels are driving commercial enterprises towards solar renewable technologies.

Relieving the burden on local electricity grid infrastructures is convincing municipalities and the federal government to provide rebates and tax incentives to both domestic and commercial users.

There couldn’t be a better time to consider solar energy than now, and switching to green energy has never been easier with our commercial solar installation guide: 7 commercial solar panel energy checks.

Frequently Asked Questions About Commercial Solar Installation