Commercial Solar Information Hub
Solar electricity helps property owners reduce their energy costs and their environmental impact.
Table of Contents
This page provides information and resources about putting solar on your commercial building, manufacturing facility, apartment building, or condominium.
Use the buttons to the right to navigate to their respective portions of this page.
Considering a smaller/residential solar electric project?
How It Works
Solar electric systems, also known as solar photovoltaics or solar PV, convert sunlight into electrical energy through an array of solar panels that connect to a building’s electrical system or directly to the electrical grid.
As you consider whether solar electricity is right for your building or business, you can familiarize yourself with how the technology works. The U.S. Department of Energy offers a video on the basics of solar.
In a grid-connected solar electric system, a building’s solar panels are connected to the local utility’s electrical grid. The building can continue to get some or all of its electricity from the grid. It can also “export” energy from its PV system to the grid when the PV produces more than the building needs.
Panels are made up of a series of individual solar cells that convert sunlight into direct current (DC) electricity. The higher the intensity of the sunlight striking the panels, the more electricity they produce. Once the electricity is produced, it flows to the inverter.
The inverter converts the direct current (DC) electricity produced by the panels into alternating current (AC) electricity, which is the form that can be used in the building. Inverters include a range of technologies, from central inverters that convert the electricity from many solar panels, to microinverters that are attached to each individual panel in a system. In grid-connected systems, inverters are designed so that if power from the utility goes down, the PV system will shut down, too. a critical safety precaution for utility workers and public safety personnel.
The electrical panel is where electricity enters a building.- from either the solar panels or the utility grid. The electrical panel will automatically draw additional power from the utility when the PV system is unable to meet the building’s electricity demand. If the solar electric system is producing more electricity than needed, the electrical panel will send the excess electricity to the utility grid through a device called a net meter.
Energy Storage (optional)
An energy storage system can provide short-term storage for the power produced by your solar electric system. Several on-site technologies for energy storage, most notably lead acid and lithium ion batteries, are now available as add-ons to a solar installation. Energy storage systems help ensure power reliability during grid outages and can provide opportunities for improved on-site energy management, such as shaving peak demand. Primary factors to consider when evaluating a storage system include price, capacity, voltage, and life cycle
Federal Incentives: Under the Inflation Reduction Act, Commercial Solar systems can now choose in between the Investment Tax Credit (ITC) and Production Tax Credit (PTC). Direct pay options may be available for certain tax-exempt entities, and new transferability possibilities can provide increased flexibility around financing. Adders are also available if the project meets certain criteria. For more details, you may refer to the Inflation Reduction Act: Solar Energy and Energy Storage Provisions Summary provided by the Solar Energy Industries Association (SEIA).
- Investment Tax Credit (ITC): Base ITC of 30% through 2033
- Production Tax Credit (PTC): PTC currently set at 0.026/kWh, adjusted each year for inflation by the IRS
Modified Accelerated Cost Recovery System (MACRS) Business owners can depreciate solar electric systems over a five-year schedule.
Solar Massachusetts Renewable Target (Smart) Program: A production-based incentive that is paid directly by investor-owned utilities in Massachusetts to solar electric system owners. Smart was launched by the Department of Energy Resources (DOER) in conjunction with investor-owned utilities. The selected Solar Program Administrator, CLEAResult, accepts and processes applications. Please see the DOER Smart website and the program administrator’s Smart website for more information and a downloadable calculator to estimate Smart project incentives. To view the Smart Solar Block Status Update, see the Solar Program Administrator log-in page.
Net Metering Allows customers to receive credits on their utility bill for excess generation in any given month. The credits can then be applied during times when the system is not generating electricity. Net metering credit values depend on a number of factors including system size.
Municipal Light Plant Solar Rebate Programs: If you are served by a Municipal Light Plant (MLP), please contact your MLP directly for the most up to date information on incentives and programs.
Cost and Performance
The cost of buying a solar electric system can vary based on system size, location, equipment used and other factors.
The dashboard below can help business or property owners to explore the cost and performance of solar PV systems installed across Massachusetts installed under various state programs (such as Smart and Solar Carve Out). listed below are shown as median values, which may not reflect unique project parameters. Pricing may vary based on project-specific factors, such as site condition or chosen equipment. MassCEC recommends comparing at least three installer quotes to help customers determine their best option.
This dashboard is based on the data included in our Solar PV Systems in MA Report (Excel format). Data about the performance of solar electric systems in Massachusetts can also be downloaded as part of the SREC Capacity Factor Report. (Note: This 54 MB Excel file may be slow to download). The 11-year average net capacity factor for solar PV systems in Massachusetts is 13.05 percent (2010 to 2020).
Energy storage, or batteries, can be a great complementary technology to install with solar PV. The pairing of solar PV system with energy storage is often referred to as solar storage. With recent updates to state policies and incentive programs, combined with the potential electric bill savings and resilience benefits, solar storage has become an increasingly attractive option for commercial property owners in Massachusetts. If you are interested in pursuing energy storage as part of a solar PV project, be sure to discuss your options as part of installer inquires and as you compare installer quotes.
MassCEC is actively involved in advancing energy storage as part of its Net Zero Grid FOCUS.
Business or property owners have many options when it comes to financing the installation of solar electric systems. The more common financing options and their benefits are described below.
Direct purchasing involves buying the solar electric system outright, without the need for a loan or other financing mechanisms. This is typically the least expensive path to solar ownership, and provides the highest return on investment over time. While purchasing a solar electric system has the largest up-front cash requirement, several programs and financial incentives are available to help defray up-front costs.
Many business owners opt to take out a loan to finance a solar electric system purchase. Financing a solar electric installation provides the system owner with many of the benefits of a direct purchase with a lower up-front investment, though interest payments and other fees may apply. In recent years, loans dedicated to solar installations have become popular in Massachusetts.
While loans can be a cost-effective option. loan terms can vary widely. Businesses should be sure to understand all charges and fees before agreeing to terms. In particular, you may want to ask lenders and their representatives about:
- Dealer fees or other closing costs associated with financing
- What happens if payments are missed, particularly for ‘same-as-cash’ financing arrangements
- Whether interest paid is tax deductible
- Whether the lender takes a security interest
Under a solar lease, a property owner agrees to pay a pre-determined monthly bill to a solar company, which installs, owns and operates the solar electric system. The property owner then has access to the electricity generated by the system, lowering the property owner’s monthly utility bill. A solar lease provides the opportunity for a business owner to benefit from solar electricity with little or no up-front cost.
A PPA is similar to a solar lease, in that the solar company will own and operate the system on the property owner’s roof. Rather than a fixed monthly payment, however, the property owner agrees to purchase the electricity generated by the system at an agreed-upon per-kilowatt-hour price, often lower than typical utility rates. Like a solar lease, a PPA allows a business owner to begin saving money immediately, with little or no up-front cost.
When considering a solar lease or PPA. review the contract carefully to understand all terms and conditions. While contractual terms may vary, items to consider are:
- The length of the contract
- Who benefits from incentives like tax credits and solar renewable energy certificates
- Whether there is an option to buy the system at a later date
- The initial electricity price and any applicable price changes over time
- What happens at the end of the contract term
- What happens if you move out of the house or business
The Solar Project Builder. a tool developed with support from the US Department of Energy’s Sunshot Initiative, can help you compare the benefits of different financing options for your project.
Understanding Solar Options for Commercial Industrial Facilities – Part 1
Tapping into the power of the sun offers commercial and industrial facilities more control over their utility bills and the ability to operate in a more sustainable fashion. Plummeting and improved technology make a host of options available for companies that want to go solar. But they’re left with a lot of information to parse and deliberations to make. We have created this three-part commercial and industrial solar series to shed light on the types of solar installations possible today, important technology considerations, and system financing and cost options available to companies of all sizes.
Everything Under the Sun
With technology rapidly progressing in recent decades, especially in the last few years, solar energy systems are cropping up everywhere. Small panels on a neighbor’s roof, a solar carport for electric vehicle charging at the mall, or a pole-mounted system on the side of a highway, solar is quickly gaining in popularity everywhere. There are two major trends driving the solar revolution: system costs and capabilities.
Cost: Solar systems today are increasingly affordable. The cost of photovoltaic solar panels has dropped from about 10 a watt in 1980 to less than 0.35 a watt today (~97% price decline). Inverter costs have been cut in half in the last decade. Solar companies have lowered their operational and installation costs, creating additional savings.
The cost declines and Rapid industry growth continually surprise analysts and even the industry’s most ardent fans. The chart below puts this into stark contrast, showing actual global solar installations (black line) versus the International Energy Agency’s annual estimates (colored lines) which are drastically lower. The sun is rising on the era of incredibly cheap solar.
Capability: Along with the steady march of progress on cost, solar systems (including the related hardware that connects it to a building and the wider grid) are also simultaneously becoming more capable and adaptable.
The classic rooftop solar panels are just the beginning. Newer panels that track the sun throughout the day can maximize energy output. Self-cleaning systems can make solar nearly maintenance free. With Smart inverters, solar output can be matched dynamically to load in real time.
No roof space? It might make more sense to float your panels in a retention pond (with the benefit of liquid cooling!). 24/7 operations? Adding the right amount of energy storage means that a facility can run on clean power at night, and near indefinitely should the wider grid go down.
As the overall costs for solar systems have declined, more capable systems have become economically viable. These new capabilities come with additional benefits for system owners and hosts, making the value proposition even more attractive to potential customers.
Types of Solar Available
There are many different options available when considering solar power for your business. Here are some of the most common types available today.
Photovoltaic Panels: Probably the first thing we all think of when someone says solar power. First pioneered in the 1880s, solar panels can be made from a wide range of materials that are able to convert energy from the sun into usable electricity, though silicon-based technology currently dominates the marketplace.
Different kinds of photovoltaic (PV) panels (including monocrystalline, polycrystalline, and thin film) have cost and performance differences that may make one better suited than another for particular installations. PV panels will typically last 25-30 years before being recycled and require little maintenance over their lifetime aside from the occasional cleaning and checkup. Solar panels are also modular, and individual sections can be replaced if damaged (hail, tree branches) or a system expanded should greater need arise in the future.
And no roof, no problem! Solar panels can also be pole-mounted, installed as carports or awnings, floating on a retention pond, or even integrated into building materials like Windows. Manufacturers and suppliers have developed all kinds of solutions and aesthetically pleasing options to fit customer needs.
Solar Thermal Systems: While it is a little more difficult to pin down the first time that humankind harnessed the sun to heat up water, its use in industrial applications can be traced back to at least 1910 when a steam engine was powered by sunlight in the Sahara. Water heating can make up a substantial portion of a building’s energy load, and technology improvements mean you no longer have to be in one of the hottest places on Earth to enjoy the benefits of solar thermal energy.
Industrial process heat accounts for nearly one-third of the nation’s energy use. Industries like hospitals, restaurants, hotels, and recreation properties all use substantial amounts of energy for heating water (as high as 35% of their total demand). Many agricultural and industrial processes also have high demand for hot water, and decarbonizing these sectors is a major climate challenge.
It is estimated that solar thermal systems can provide nearly half of the heat demand of industrial and agricultural food processes. Advanced solar thermal systems can easily heat water to 400°C for a wide range of industrial applications or as carbon-free pre-heating for even more intensive processes. Day-to-day warm water for facilities, showers, space heating, laundry, dishwashing, and yes, even air conditioning, can all be powered by solar thermal systems as well.
The more robust type of solar thermal system is called an ‘evacuated tube’, where the inner element is shielded from the outside air temperature by a vacuum — meaning that it can easily operate in sub-zero temperatures and still produce scalding temperatures from the sun’s radiation. basic systems are common in warmer climates, where water is passed through thin tubes of metal or black plastic exposed to the sun. Though basic solar thermal systems can’t reach the same high temperatures, they can easily meet day-to-day building needs and are a great fit for hot showers, pools, sauna heating, and other moderate temperature applications.
Technology Integration: A solar system goes far beyond the type of collector used, and includes a number of other components that each have their own capabilities and benefits.
For example, Smart inverters can assess building load and grid signals in real time to provide exact amounts of energy even as clouds pass overhead. Tracking systems can mechanically follow the sun through the sky to maximize output. Integrated heating can take advantage of solar-powered hot water on its way to hotel showers to create radiant floor heating for guests, lowering utility bills.
Additional capabilities may come with additional costs, but they also unlock additional value that may be important to your business. For example, energy storage systems, typically batteries, are of particular value to any business that appreciates keeping the lights on when the grid goes down (i.e., everyone). With the right controls in place, other capabilities can also be monetized by competing in energy markets or participating in utility incentive programs, accelerating the return on investment or even creating a new revenue stream.
There are a number of different options available for commercial and industrial facilities considering solar power. The sum total of components in a solar system can enable many different benefits and can be customized in multiple ways to meet the needs of customers of all types.
In part two of our solar series we will explore technical considerations and benefits important for commercial and industrial facilities.
What Does Commercial Solar Cost in Ohio?
If you’re considering solar for your Ohio-based business, now is a good time to make the switch.
for solar in Ohio have dropped 47% in the last year alone (as of Q2 2018). This drop in cost means you break even faster and start generating free electricity sooner.
A 50 kW to 100 kW commercial solar system typically costs between 130,000 and 250,000 before financial incentives are applied. With available incentives, you could recoup 26% to 75% of the system’s cost within the first year.
The average commercial solar system can save you 100,000 to 350,000 over the 30 years of the solar system’s life.
Average Commercial Payback and ROI in Ohio
These numbers are averages based on projects we have completed in Ohio.
Payback is the amount of time to re-coup up-front costs. ROI is the annual rate of return over a 30-year period.
Ohio Tax Incentives
A Real-World Example From Ohio
To illustrate a cost situation, we’ve highlighted nüCamp, a manufacturer of RVs and teardrop trailers based in Sugarcreek, OH.
- 1,909 solar panels and 15 inverters
- 629.7 kW system
- 643,527 kWh (First year production)
Will Solar Panels Work in Ohio?
The short answer is yes. But first, let’s explore a bit about how we estimate solar production.
Solar power estimates are based on a measurement called a Peak Sun Hour (PSH). A PSH represents the amount of solar energy available during a day. The average PSH in Ohio is 4.15 hours per day (based on fixed-tilt solar panels).
For comparison, look at Germany.
Germany is not known as a sun-drenched country. However, Germany has long been a leader in global solar output. In 2014, Germany produced 177 GW from solar power (1 GW is about equal to the output of a large natural gas or nuclear power plant.)
Peak Sun Hours (PSH) in Ohio Cities
Notable Commercial Solar Installations in Ohio
Campbell’s Soup in Napoleon. Solar installation provides 15% of the facility’s electricity.
Assurant in Springfield. Added 6,200 solar panels on rooftops and 15 new parking canopies.
Solar Resources for Ohio Businesses
Ohio Solar Statistics and PoliciesSEIA. Ohio Solar Policy
Find Out If Solar Makes Financial Sense For Your Business
The first step to making a great solar investment is to receive a no-obligation custom quote. We’ll evaluate your current energy usage, conduct a site assessment, go over financing options and incentives, and provide you with a free detailed quote that shows the cost, ROI, and a year-to-year cash flow.
What to Know About the Commercial Solar Installation Process
Making the decision to add solar to your business is a wise financial choice. After all, when you lower your electricity bills and reduce your carbon footprint by making your own clean electricity, the financial rewards and positive environmental impact are felt for decades. You’ll also be joining the ranks of successful companies, like Amazon, Apple, and Walmart, and Microsoft, who’ve made the switch to solar, along with helping make your business more attractive for current and future employees.
To help ease the transition, there are limited-time tax benefits that can make going solar more affordable for your organization. The 30% federal investment tax credit is one of the most lucrative benefits. As part of the Inflation Reduction Act of 2022, the solar tax credit was reinstated to its previous 30% and extended through the year 2032. The Act also introduced additional savings depending on what materials you use and where you choose to install your commercial solar project. We recommend speaking to a qualified commercial solar installer to learn more about the tax incentives available to your organization.
Once you’ve decided to add a commercial solar energy system to your business, it’s natural to want the process to be done as quickly as possible so that you can start reaping the numerous benefits right away. The process of going solar, however, can vary in time depending on the type and size of the system you’re installing, as well as the legal requirements of the jurisdiction in which you operate. But no matter what solar path you choose to go down, there are five basic steps that most commercial solar projects follow. Let’s take a brief look at each.
All commercial solar projects have this as their first step. The building blocks of the solar design and installation plans are based on this initial site evaluation. This step includes:
- Legal reviews to ensure you have the right to build a solar energy system on the property.
- Determining where and how your solar energy system will connect to the grid.
- Evaluation of the property including shade analysis, structural evaluations, and topographical and geological surveys.
Once the site evaluation is complete, the system design phase formalizes the plans for the solar installation. You will receive a design drawing that outlines how the panels will be arranged to capture the maximum sunlight, as well as the construction details. Depending on your preferences and requirements, the design may include rooftop-mounted, ground-mounted, or solar carports.
The process of construction can vary depending on your project type and system size. Smaller rooftop systems can be as quick as 2-3 weeks, whereas larger and more complex systems can take up to several months. While well-thought-out plans have minimal disruption to normal operations, you’ll still want to prepare for things like alternate parking spots and temporary power shutdowns, depending on the nature of your business and the size of the system. Most experienced solar installers have clever workarounds that will help to minimize disruptions to your normal operations. Picking a reputable and experienced installer is critical in this regard.
Commissioning is the next and final step once construction is complete. This is when your solar provider confirms that your solar installation was built according to plan, and the utility grants you permission to connect and operate your solar energy system with the local power grid. Congratulations, you’re now producing your own clean energy!
System Operation and Maintenance (OM)
As with anything, proper care and maintenance will give your solar energy system a longer lifespan, as well as ensure maximum efficiency and power generation throughout its lifespan. Your contract should specify your organization’s level of involvement in OM. Be sure to select a solar design and installation team with proven OM resources and a reputation for excellence in long-term support. The best OM packages generally include basic annual inspections and warranty repair, performance monitoring, and even routine cleanings in some instances.
As you can see, there’s quite a lot that goes into the commercial solar installation process. If you’re hoping to reap some of the lucrative tax benefits, time is of the essence! With an unprecedented demand for solar, installer’s schedules are already filling up for this year, so we recommend getting your project started as soon as possible to claim this benefit on your business taxes.
If you’re interested in learning how solar can help your business and about the substantial tax benefits you can claim, we invite you to start your solar project today by scheduling a consultation with a member of our commercial solar team.