From Fortune 500 companies to local Mom & Pops, businesses across the country have cut their operating costs and saved on taxes with solar energy.
By opting for solar electricity, companies can reduce or nearly eliminate their monthly electricity bills, freeing up funds to save or invest elsewhere in the business. And by adopting renewable energy, they’re telling their customers, employees, and the community that they care about the environment and are taking visible steps to reduce their carbon footprint.
However, while it’s an investment that will pay for itself (and then some), installing solar panels for your business costs money.
In this blog, we’ll take a look at how much you can expect to invest in your solar system.
Variable that Influence a Commercial Solar System's Cost
All solar systems are uniquely designed to fit the property and goals of the particular business. But each factor that makes your system unique can also impact the upfront cost.
A few of the significant variables include:
The size of your solar system
The larger the system, the greater the cost. However, larger systems can also produce more free electricity, which can lead to fast paybacks and more money saved.
The type of equipment you choose
From top-of-the-line to budget brands, there's a wide range of solar equipment available on the market. Your budget can help dictate which type of equipment is a good investment.
The incentives available to you
Two of the most widely available solar incentives for businesses are the federal tax credit and 100% bonus depreciation. The solar investment tax credit reduces the cost of going solar by 26% through a tax credit. 100% bonus depreciation allows you to accelerate all tax savings from depreciation to the first year.
These incentives frontload your solar investment, reduce your tax burden, and make the initial installation costs more achievable. They’re available to all tax-paying businesses. These are just the two most widely available incentives. Some states and municipalities offer additional grants and tax credits to business owners.
Whether it’s a roof-mounted system or a ground-mounted system
There are two different ways your system can be installed: as a roof-mounted system or ground-mounted system.
Roof-mounted systems utilize your roof as a supporting structure. A racking system is installed on top of your building, and solar panels are then mounted to them.
A ground-mounted system requires constructing a separate structure secured to the ground to which the panels will be mounted. Constructing the supporting structure takes time and materials, which can lead to higher costs for ground-mounted systems. However, ground-mounted solar panel systems do have some benefits. One main benefit is they can be constructed in an area that is optimal for solar production.
Here's a deeper dive into roof mounts vs. ground mounts.
The Average Cost of Installing Solar Panels for Businesses
Solar panels for businesses cost anywhere from under $50,000 to upwards of $500,000, depending on system size and other factors.
We can get a little deeper than this, though. To calculate the average cost of a commercial solar panel system, we’re going to make a few assumptions regarding the variables noted above.
We’ll also include the federal solar tax credit and bonus depreciation in the final cost, as these two incentives are widely available. But know that depending on your specific business, you may qualify for even more cost-saving incentives.
Roof-Mounted Solar Costs for Businesses
Roof mounts are a great way to turn an underutilized or forgotten space into a money-making machine. Here’s an idea of what installing a roof-mounted solar system for a business would cost. The cost to install a ground-mounted system will be slightly higher.
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Keep in mind that there are various financing options available for businesses that want to invest in solar energy. Those options include outright cash purchase, solar loan, solar leases, and Power Purchase Agreements. Here's a guide that will help you select the best solar financing for your business.
Is Going Solar Worth the Cost for Businesses?
Even with incentives, installing a solar system is a significant investment. That said, a properly installed solar system with high-quality parts comes with 25 to 30-year warranties and will continue to produce energy years beyond that.
The payback period for the solar systems cost breakdowns above range from six to ten years. And depending on how much electricity you use, how suitable your site is for solar energy, and what other incentives are available, this period could be even shorter.
That leaves your business with over 20 years of 100% free electricity, protecting your bottom line and increasing your profits.
We’ve helped businesses big and small make a difference with solar energy, and we would love to help you achieve the same. Discover how solar can improve your bottom line by requesting your free custom quote with the Get A Quote button at the top of this page.