Commercial Solar Panel Installations ( Costs, Benefits & More)

Commercial Solar Panel Installations ( Costs, Benefits & More)

In this guide, we’ll answer the following:

  • How many solar panels are needed for a commercial building?
  • What is the price of a commercial solar panel?
  • How to size a commercial solar system?
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What Does a Commercial Solar Panel Installation Look Like?

Commercial solar energy systems vary much more in size and scope than their residential counterparts. Most commercial solar arrays are much larger, and they aren’t always confined to roofs. Some organizations opt for solar carports, while others install ground-mounted solar panels.

Larger commercial operations may even feature a “power tower,” an array of mirrors that focus the sun’s rays onto the photovoltaic panels below them.  Commercial systems are usually installed on a flat surface and must be built on racks tilted toward the sun at the best angle for the solar panels to capture the most energy during the day.

Some systems even include features that synchronize the panels’ angles (or azimuth) with the changing height of the sun. Keeping the cost per panel as low as possible is key to securing the quickest return on investment (ROI) for larger commercial installations.

For this reason, we recommend selecting the most efficient solar panels available. The less space, products and planning needed, the lower the aggregate costs of the installation will be. More efficient solar panels also tend to last longer, ensuring a reliable investment.

Solar offers commercial property owners a growing number of solutions to offsetting a large chunk, or even all, of a business’s electricity bill. A commercial solar system is a sizable investment, but solar incentives, tax breaks and new technologies make it a very attractive one.

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SunPower

Best National Provider

Nationwide Service

EcoWatch rating

Average cost

Pros

  • Most efficient panels on the market
  • National coverage
  • Cradle to Cradle sustainability certification
  • Great warranty coverage

Cons

  • Expensive
  • Customer service varies by local dealer
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Blue Raven Solar

Best Solar Financing

Regional Service

EcoWatch rating

Average cost

Pros

  • Industry-leading in-house financing
  • Competitive pricing
  • Excellent reputation

Cons

  • Doesn't offer solar batteries (coming 2022)
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ADT Solar

Best Warranty Coverage

Regional Service

EcoWatch rating

Average cost

Pros

  • Industry-leading warranty coverage
  • Expansive service area

Cons

  • Some reported communication issues
  • No leases or PPAs

Commercial Solar Costs

Given the size of commercial solar projects, customers can usually expect a larger figure than the cost of most residential systems. No two businesses are the same, and though some small organizations may find great value in a commercial system costing around $50,000, large industrial facilities or solar farms can cost over $1 million to install.

The good news is that as the scale of the system increases, so does the speed at which you can recoup your investment.  Several tax credits, rebates and incentives still exist for commercial solar panel systems as they do for residential systems.

Incentive Benefit for Commercial Solar Panel Installations
Federal solar tax credit The federal solar investment tax credit (ITC) allows the deduction of 30% of the cost of the system for any commercial solar installation.
Bonus depreciation through MACRS The Modified Accelerated Cost Recovery system (MACRS) allows a tax deduction for the depreciation of qualifying solar equipment. This solar tax incentive for commercial installations allows companies to recover their investments over an accelerated amount of time. For solar, this is five years. Bonus depreciation was introduced into MACRS after 2008 and allows you to allocate 100% of the depreciable value in just one year.  In other words, MACRS allows businesses to effectively accelerate their ROI through tax deductions.
Net metering Commercial properties generating energy via solar panels are eligible for net energy metering (NEM). In the same way that a residential customer would feed excess solar energy back to the grid, commercial installations can exchange their surplus energy for credits from their utility company. These credits can be used to pull energy from the grid overnight or during rainy weather at no cost.
Statewide and local incentives We encourage our readers to research statewide incentives or local incentives that may be available in their area. Depending on the area, a commercial solar installation could be eligible for solar rebates, renewable energy credits or zero-interest solar loans.

The ideal way to get a good understanding of what the best solar installation price for your business is to consult with a local installer near you to get a quote, which you can do for free below.

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Benefits of Commercial Solar Installations

Commercial solar installations provide all the same benefits that residential solar installations do, only at a much larger scale. As most commercial solar installations can be well over 50 kW (the average residential is between 5 to 10 kW), some commercial solar installations can have over 10 times the environmental and economic impact of your average residential installation.

Environmental Benefits of Commercial Solar Panels

Commercial solar installations have the potential to offset hundreds, if not thousands, of the metric tons of carbon dioxide emitted by conventional energy generation. For example, a 50-kW commercial system will produce an estimated 65,000 kWh of clean energy per year.

This would lower a business’s carbon footprint by 1,000 metric tons over the course of a commercial solar power system’s lifetime (the equivalent of not burning just over 1 million lbs of coal). As a growing number of consumers are choosing to support businesses with responsible environmental practices, solar presents businesses with a golden opportunity to reflect their commitment to sustainability while still turning a profit.

Financial Benefits of Commercial Solar Panels

Energy costs are routinely one of the highest costs to businesses. Energy Star reports that the nation’s small businesses spend over $60 billion on energy per year, and utility rates are only projected to increase over time.  Utility rates also fluctuate with frequent supply disruptions, so investing in solar allows businesses to offset their energy costs in a predictable, fixed manner.

The average lifetime of a solar panel is around 25 years, so with the right warranty, a business can reliably budget their energy costs decades in advance. By offsetting the majority (or sometimes all) of their energy costs, businesses can reinvest huge sums of money back into their organizations, raising their bottom line.

The ideal way to get a good understanding of what the best solar installation price for your business is to consult with a local installer near you to get a quote, which you can do for free below.

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FAQ: Commercial Solar Panel Installations

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Karsten Neumeister
Article author
Karsten is a researcher, editor, writer and energy specialist focused on environmental, social and cultural development. His work has been shared by sources including NPR, the World Economic Forum, Marketwatch and the SEIA, and he is certified in ESG with the CFA Institute. Before joining EcoWatch, Karsten worked in the solar energy sector, studying energy policy, climate tech and environmental education. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace.