Commercial solar panels cost $2.50 to $3.50 per watt installed before incentives. With tax credits and other incentives, solar panels for commercial buildings cost $1.20 to $1.75 per watt, depending on the location, size, and complexity. Saving up to 75% on electricity helps offset the commercial solar installation costs.
The commercial solar sector includes most non-residential properties, including office buildings, retail businesses, factories, warehouses, schools, hospitals, clinics, government organizations, non-profits, religious organizations, agricultural businesses, and parking garages and lots.
The table below details a typical cost breakdown for a commercial solar system installation. Keep in mind these are averages and the specific costs for each business vary depending on many factors.
Balance of system (All other components making up the solar array—mounting structures, inverter, cables, wiring, electrical panel, etc.)
Several factors influence the cost of a commercial solar panel system including:
Electricity usage – The more energy you consume the bigger the more solar panels you'll need to offset the costs.
Off-grid vs. grid-tied – For total energy independence, you'll need to factor in the extra costs for battery storage and generators. A 30kW off-grid solar system costs $120,000 to $150,000 to power a small business. Check local laws before investing, as some areas may require maintaining connection to the grid.
Location & market – The number of sunny days impacts the size and number of panels needed. Location also affects labor rates, regulations, requirements, permitting fees, interconnection fees, and available incentives.
Interconnection point – The distance from the solar panel system to the point of interconnection affects the cost. The farther away the system is, the higher the installation cost.
Solar panel type – Monocrystalline is more expensive but is the most efficient option, best for businesses working with limited space. Polycrystalline is cheaper but less efficient. Thin-film is cheapest but needs the most space. Most commercial panels are large—72-cell or 96-cell panels—and use larger inverters.
Assembly – Pre-assembled solar energy systems typically cost less than buying all the components separately.
Brand & quality – Higher quality components from well-established brands cost more but tend to last longer and often come with longer warranties.
Insurance – Adding a solar system to your business means increasing your property and liability insurance.
Maintenance – Solar panel cleaning costs $10 to $20 per panel on average. Ongoing maintenance includes inspection, cleaning, and periodic repairs to keep the system performing efficiently and maximize its lifespan. Some systems come with annual inspection and cleaning rolled into the installation contract.
Removal – If you have existing panels that have reached the end of their lifespan and need replacing, solar panel removal costs $200 to $500+ per panel, depending on the system size and job complexity.
You can install commercial solar panels on a roof like most residential solar panel systems. However, you may have several other options as well, depending on the property. In general, fixed panel installations cost less than responsive tracking systems requiring advanced equipment and technical expertise to install.
Installation possibilities to consider:
Rooftop – Rooftop installation is the most common choice for commercial solar panels.
Flat roof – Ballasted solar racking uses gravity—instead of traditional roof-penetrating methods that increase the risk of leaks and roof damage—to hold the solar panels in place. Single-tilt mounting is popular for large warehouses and factories. Dual-tilt panels are the best use of space for smaller flat roofs.
Sloped roof – Rail mounting systems secure the solar panels in place via a line of rails attached to the roof with roof-mounted assemblies. Rail-less mounting systems attach the solar panels directly to the roof instead of to a line of rails.
Parking lot – Solar carports or solar canopies take advantage of parking lot space by using solar panel arrays angled to provide shade to the cars underneath while simultaneously generating solar energy.
Vacant land – Ground-mounted and pole-mounted systems are viable options for a business with a lot of unused land space, or when roof-top installation is not structurally feasible. Additionally, agrivoltaics, or solar sharing, uses shade-loving crops to help reduce the cost of a solar farm on the same land space.
There are many incentives to help offset the prohibitive cost of a commercial solar system. While the federal tax credits are available in all states, the other available incentives and requirements for commercial solar vary by state, utility, and local governments. The table below details some of these incentives.
Research your incentive options thoroughly and speak with a qualified tax professional before moving forward with a commercial solar system installation. Some incentives have strict installation and labor requirements.
While paying cash up front for the entire installation yields the most financial benefit, businesses that don't have the capital have several financing options to go solar with little to no money up front.
"Solar branding" is a relatively new trend that allows businesses to utilize their marketing budget funds to get the benefits of both solar energy and advertising with a custom-designed solar panel system.
Commercial solar panel systems are typically larger than residential systems as the property size and electricity needs are larger than most single-family homes. As such, most commercial systems cost more overall, though they may cost less per watt due to the economies of scale.
Before tax credits or incentives, residential solar panels cost $3.00 to $4.50 per watt installed on average.
Both commercial and residential solar energy systems are eligible for the federal tax credit.
Commercial solar panel installations often take longer to complete due to the extensive research, planning, design, and permitting processes.
The table below shows Solar Power World's top 10 commercial solar contractors of 2023. These companies installed the most kW for commercial solar energy systems in 2022.
"EPC" service means engineering, procurement, and construction and refers to companies that provide complete end-to-end service—research, planning, high-tech system design, installation, and often ongoing monitoring after installation.
Installing a commercial solar panel system offers many benefits and few drawbacks. While solar energy is sun-dependent and installation often requires roofing and system upgrades which add to an already expensive upfront cost, the positives tend to outweigh the negatives in many cases.
Improved company image – Many people prefer working with companies who are committed to eco-friendly business practices.
Reduced carbon footprint – Solar panel systems contribute to a company's corporate social responsibility (CSR) and sustainability goals.
About Commercial solar rooftop cost
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