Solar Energy for Commercial Buildings: Pros and Cons Explained
All around the world, commercial and industrial companies are exploring the benefits of solar power for businesses to improve energy efficiency and reduce their carbon footprint. So, what are the pros and cons of solar energy for commercial buildings?
Transitioning your business to a solar power system is an important decision. Understanding the benefits of commercial solar power can help you evaluate your options.
Solar Systems Allow You to Do Your Bit for the Environment…
Unlike traditional methods of generating electricity, solar energy doesn’t cause pollution. Traditional electricity production results in an estimated 25% of total greenhouse gas emissions in the United States. However, each kilowatt-hour of solar power decreases CO2 and other hazardous toxins. By converting to renewable energy, your business can reduce its carbon footprint and help slow climate change.
…But Solar Panels Aren’t Just for the Environmentally Conscious
It’s simple: solar power is cost-effective. A solar panel system is a low-risk investment. Instead of paying monthly energy bills for a consumable, you can invest it in solar panels that can slash your energy costs and even earn energy credits.
How quickly your business recoups its investment depends on a few factors:
- Electricity usage
- The size of your solar energy system
- Local utility rates
- The total amount of energy your solar panels generate
You Could Be Saving Thousands…
Find out how much you should be saving right now with a solar system.
Commercial Solar Benefits Include Tax Credits
To encourage solar for commercial buildings, the government offers several (state and federal) tax benefits and incentives. When your business installs solar panels, you qualify for the Solar Investment Tax Credit (ITC). This program grants a 26% federal tax credit for solar panels installed by the end of 2022.
In addition to the ITC, businesses that install solar panel systems are entitled to accelerated depreciation and the depreciation bonus. Equipment depreciation deductions for businesses are typically spread out over the product’s lifespan. However, business owners can recover the costs of installing solar panel systems at an accelerated pace.
With the push to go green, many states and counties offer incentives as well. These include tax breaks and rebates for commercial solar installations. Such incentives assist in offsetting your company’s expenses and recovering your investment at a faster rate. Talk to an experienced commercial solar provider today to find out what benefits your state is offering.
Going Solar Eliminates the Uncertainty of Electricity Prices
Fluctuating electric bills can make judging cash flow and operating expenses very difficult, can be hard to predict. Instead of working in uncertainty every month, solar power systems can give your business stability.
Since most monthly solar bills are fixed, your company will be locked into the same rate. Solar power is an investment that will help your business meet its bottom line.
Solar Panels Reduce Dependency on the Power Grid
weather event, your company will still have a reliable electric supply. Unlike your competitors, you’ll be able to keep your business operating throughout power interruptions.
Commercial power failure is a relatively common incident. For many industries, these lapses are detrimental. A solar panel system alleviates these disturbances. Going solar gives your energy sources independence from your local provider.
A Big Benefit of Commercial Solar Energy: Improving Corporate Image
Solar energy is a sustainable renewable energy source. When your business commits to going green, you publicly demonstrate your concern for the environment. Doing so distinguishes your brand from your competitors. Switching to solar energy for your commercial building makes a positive impression on your employees, shareholders, client base, and potential customers.
Additionally, switching to solar gives your business the ability to set an example for other companies that have yet to invest in sustainability. Joining this global movement showcases your business as an industry leader, paving the way for the future.
A Commercial Solar Panel System Can Benefit All Businesses
Are There Any Downsides to Solar for Commercial Buildings?
Like any major decision, there are some downsides to going solar that deserve consideration. For one thing, solar energy systems come with an upfront expense. However, this is mitigated by lucrative financing terms (which we’ll find for you) and significant tax incentives.
Another consideration is that solar panels require some maintenance, but it’s typically minimal. Solar panels contain no moving parts, making it unlikely your equipment will need replacement during its lifetime. At Airis Energy, we provide comprehensive maintenance, both preventative and corrective for 20 years, so you never have to worry about your solar power system.
What This Article Covers
For a variety of reasons we’ll touch upon in this article, commercial solar has been slow to take off, but there are signs that this sector is poised for significant growth. And, for those who learn to navigate the complexity of these projects, the rewards can be big.
This article is part of a series, in which we delve into a variety of aspects of commercial solar to help solar professionals understand the dynamics of this unique sector.
In today’s article, we offer a brief intro on what commercial solar is, the scale of this sector, and some of the factors that have constrained its expansion, as well as forecasts for future growth.
In other articles, we discuss the different players involved in commercial solar projects. how to sell a commercial solar project. and what financing for these projects may look like.
What Is Commercial Solar?
Commercial solar may seem straightforward — solar for businesses as opposed to residential solar for homes. However, commercial solar encompasses a variety of different types of customers and projects. In addition to businesses of different sizes, from large corporations to local small businesses, “commercial” solar customers can also include governments, schools and universities, and even nonprofits.
Commercial solar projects may take the form of rooftop arrays on buildings or ground mounts, and can range widely in size from kilowatts to megawatts. According to Joe Naroditsky, Director, Solar Operations at the Community Purchasing Alliance (CPA). an organization that connects nonprofits with solar bids, the CI solar projects his organization facilitates can range in size from 50 kilowatts (kW) for small churches and synagogues to 300-400 kW for large schools.
And that’s just the tip of the iceberg.
Commercial Solar Opportunity
With the help of Aurora solar software. researchers at UC Davis have examined the real-world solar potential of some of the largest commercial buildings in the United States.
Their review of the largest commercial building in the U.S., a Texas-based aerospace company with 770,000 square meters of rooftop, found that it could generate 88 million kilowatt hours (kWh) of clean energy! As explained in the Washington Post, “That’s enough to power nearly 5,200 homes for a year, offset 47,800 metric tons of CO2, and spare up to 388 acres of land.”
Obviously, this is the extreme end of the spectrum, where building rooftops rival the scale of utility-scale projects, and this site has not been developed with solar. However, it serves to illustrate the variation in potential project sizes in a sector where the buildings and customers differ widely.
Potential Downsides
While commercial building solar panels have many benefits, they carry some disadvantages, too. It’s important to understand these downsides to make the most informed decision.
High Upfront Costs
The biggest issue many companies face with solar panels is their high upfront price. While this infrastructure pays off for itself over time, installing it is an expensive process. Consequently, not every installation is economically viable for every building.
The cost of solar panels themselves isn’t the only economic issue, either. Some commercial buildings may not have a strong or flat enough roof to support the installation. In those cases, maintenance, upgrades or even replacements may be necessary, which will raise the upfront expenses even more.
Energy savings and tax credits will help make up for these, but these are limited and may take time. Smaller businesses or those that need more extensive roof upgrades may not be able to afford large solar installations as a result.
Reliability Concerns
Another potential downside to commercial building solar panels is their reliability. Solar power is highly intermittent, producing more energy at some times of day than others and varying year to year. How much power it generates depends on the elements, which isn’t ideal for businesses.
Peak power production likely won’t align with businesses’ highest demand periods. Buildings may need more energy to keep lights on after the sun sets, but solar panels won’t generate any electricity then. This lack of consistent power means most businesses can’t rely entirely on solar power.
Buying energy from the grid to make up for solar’s peaks and valleys will slow its economic returns. Alternatively, commercial property owners may install battery storage systems to let them rely more on solar power, but these are expensive.
Implementing Commercial Building Solar Panels Effectively
Commercial building solar panels can still be an excellent investment, but they require a careful approach. Property owners who want to make the most of them should consider these advantages and disadvantages to determine the best path forward.
Start by looking at how effective solar panels would be on your property. Generally speaking, areas in lower latitudes and drier climates will generate more solar power than others. Similarly, roofs free from shade and dramatic seasonal changes will produce the most reliable energy. An audit may be necessary to determine these conditions in specificity.
With this information in mind, you can then look at the expected costs. Compare various panel types from multiple vendors, being sure to note their efficiency, as more efficient panels may produce a faster ROI. Check for applicable state or federal tax incentives to help offset these costs, too.
Finally, remember that it’s best to start small before expanding. Begin with just a few solar panels, then slowly grow from there, noting what works the best and what falls short of expectations. This approach will help account for high costs and boost ROIs.
Commercial Buildings Can Gain a Lot from Solar Panels
With the right approach, commercial building solar panels can bring many benefits. Moving away from fossil fuels is crucial, and these installations are a great step toward that goal for many commercial properties. While the technology still isn’t perfect, some businesses can expect to see considerable improvements from these systems.
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) The Roof Structural Design Should Consider the Solar PV Array
A 72-cell commercial solar panel can weigh over 60 lb, and large commercial arrays can have hundreds of them. According to the National Renewable Energy Laboratory (NREL), a PV system increases the load on a roof by up to 6 lb per sq.ft., when you consider racking systems and other components.
To design the roof properly, the structural engineer in charge of your project must know the load distribution of your solar array. Keep in mind that ballasted mounted systems are heavier, since they use concrete weights to hold solar panels in place.
) Optimize the Orientation of Solar Panels and Avoid Shading
Since the sun’s position in the sky is always changing, the angle from which solar panels receive sunlight also varies. Ideally, solar panels should have an orientation and tilt angle that will maximize the amount of sunlight received during the year. On a flat commercial roof, this can be easily accomplished with a ballasted system with the optimal tilt angle. There are also tracking systems that keep solar panels pointed towards the sun, but these are better suited for ground installations.
Solar panels become more productive when they have optimal placement, but only if the area is not covered by shadows. Compared with homes, commercial buildings are less likely to be shaded by trees or other buildings. However, keep in mind that shadows move during the day, and a roof area that is clear during the morning may be completely shaded in the afternoon. Solar designers use special software that simulates the sun’s movement during the entire year, to determine the optimal layout for a PV system.
) Make Sure Your Commercial PV System Is Properly Sized
Your roof design can be optimized if the size and layout of your solar array is known in advance. However, an undersized system will achieve minimal savings with respect to your power bills, while an oversized system brings unnecessary costs. To find the ideal size of a commercial solar array. there are two important factors to consider:
- The energy consumption profile of your building.
- Local net metering regulations: How are you paid for surplus power?
Solar panels reach their peak productivity around noon, and a large array will probably exceed your building consumption at that time. Surplus production is not a problem if your electricity provider offers net metering, but keep in mind this benefit is not available in some place.
If net metering is not available, your solar array should be sized according to your consumption, avoiding surplus production as much as possible. With net metering you can use a larger array, since surplus production is also subtracted from your consumption.
Just keep in mind that net metering conditions vary depending on the electricity provider, and there is normally a maximum credit you can get. There are cases where you can reduce your power bill to zero with net metering, and unused credit is often rolled over to the next month. However, net metering programs that pay you in cash for credits are extremely rare. This means you cannot increase the size of a commercial solar array indefinitely with the intention of billing your power company.