hereas residential and utility-scale solar sectors grab the spotlight, commercial solar energy gets far less public attention and is often overlooked by business owners. The International Energy Agency (IEA) reports that the commercial and industrial segment was responsible for only 19% of global solar PV capacity additions in 2021, while utility-scale plants accounted for 52% and residential accounted for 28%.
Solar panels offer an excellent solution for commercial buildings, yet some still doubt they are worth it. We've put together a list of pros and cons to help you determine if a solar installation should be part of your business strategy.
Pros of PV modules for commercial premises
Gone are the days when tapping into solar power was just about environmental impact. Today, solar panels can actually help your business grow by permanently cutting your expenses.
First, they lower operating costs by drastically reducing energy bills. According to EnergySage market research, an average commercial property owner in the United States can decrease overall electricity costs by 75% with solar panels.
Solar panels also increase your commercial property value. If you decide to sell your business premises, a PV installation will allow you to set a higher price and attract more potential buyers. They will be lured not only by substantially lower energy bills but also by independence from the utility grid.
Reduced carbon footprint
Low carbon dioxide emissions are also a key point. The environmental benefits of solar energy are immense: a single panel installed on a commercial building offsets the same amount of carbon emissions as ten mature trees! A 20kW solar system (the most common size for small and medium-sized businesses) usually has 55 to 60 panels, meaning you can offset the emissions equivalent of up to 600 trees.
Positive brand image
Since consumers are becoming increasingly aware of climate change and concerned about its impacts, they are willing to vote with their wallets for brands that share their values.
A survey by Stifel Financial on consumer expectations shows that 83% of U.S. shoppers believe it is important for businesses to focus on operating sustainably. Installing solar panels is an excellent way to show your business’s strong commitment to environmental and sustainability issues.
Boost for the local economy
Setting up solar panels on commercial buildings is a great way to spur the local economy by using the services of local providers. The solar industry provides high-wage jobs and employs manufacturers, installers, and maintenance technicians. This, in turn, significantly contributes to the success of other businesses as more customers are showing up.
Looking for a solar energy equipment supplier? Check out industry leaders like SolarEdge, Enphase, and SMA Solar Technology for top-notch products.
Cons of PV modules for commercial property
Large upfront investment
The high upfront cost is probably the most significant obstacle to installing solar panels on commercial buildings. The price of a 20 kW system is $55,400 on average, which is a fairly large amount for a small business.
However, this figure does not take into account any incentives. You can cut the cost by 30% with the solar Investment Tax Credit (ITC) and apply for local incentives and rebates to further reduce the price tag.
The intermittency of solar energy still raises concerns over potential supply shortages. PV panels don’t generate electricity at night and produce less on overcast days, which is why some business owners consider solar power unreliable. Yet there are several ways of solving this problem. If you have the net metering program in your area, you can send any surplus energy your PV system generates to the utility grid and draw it from the grid when your panels underperform. You also can pair your modules with a battery to store energy for later use.