You have a business and you’re getting tired of paying high utility bills. Who isn’t? You’ve noticed several businesses in your area have had solar panels installed. You haven’t had a chance to talk to the business owners, but since they installed their systems, you’ve been wondering how much commercial solar panels cost. It’s a valid question. Solar panels are a major investment, and you want to get the best system for your business at the best possible price. You’re thinking “Value”.
Do Solar Panels Make Sense for My Business?
Absolutely. More and more small, medium, and large businesses in California are installing solar panels. They range from your local mom and pop store to the largest corporations, such as Apple, Target, Agilent Technologies, and more have installed them and are saving large amounts of money on their energy costs. Another plus is that the cost of solar panels has continued to drop over the years. Prices have dropped over the last few years and will continue to drop in the future. But then, why would you wait, if you could save utility costs now?
What Are the Benefits?
Good question. Since installing a solar energy system is a major investment, knowing the benefits of a solar energy system for your business is a good idea. Here are some of the benefits of a solar energy system for your business:
- Reduced or possibly negative energy bills – No one likes to send piles of money to PG&E. Energy can be a significant cost of doing business, so anything that reduces those costs is a good idea. A solar energy system can reduce or possibly eliminate your monthly energy bills. With a properly designed system, you can generate most or all of your daily energy needs. With “net metering”, any excess power you generate gets sent back into the grid and you receive credits toward your monthly bill. The power company pays you. Nice idea, isn’t it? You’ll also avoid spikes in demand and be able to continue to function during a power outage if you have a solar energy battery backup system.
- Increased Property Value – Solar energy systems add value to your business. Just as solar energy systems add value to your home, they add value to your business property. If you decide to move or sell your business, the solar energy system will increase the appeal of the property and add dollars to the sale price.
- Improve Your Company’s Image – By getting a solar energy system, you could improve your company’s image. By investing in a renewable energy system, you’ll show your customers, potential customers, your employees, and the public that you care about the environment and the future of the planet.
- Supporting Local Businesses – When you purchase a solar energy system, not only will you enhance your bottom line, you’ll also be helping the bottom line of local businesses. Workers from your local solar energy system company will do the installation, which supports good paying jobs, and depending on what your business is, they may also become future customers or clients, so your solar energy system installation benefits your entire community.
How Much Does a System Cost?
That’s the big question. The short answer is that there’s no one answer. There are a number of factors that will determine the final cost of your system. Here are 3 considerations:
- Size – Estimating how big your business’ installation is – – will be a big factor in the overall cost of your system. Most commercial installations tend to be large, so costs will be proportional to the size of the system.
- Tax Incentives – Currently, there are tax incentives for commercial solar energy system installations. To help defray the costs, the federal government offers a tax credit of 26% on systems that start construction between Jan.1, 2020 and Dec. 31, 2023. The tax incentives will continue until 2026. Click here for a downloadable PDF guide to the federal commercial solar energy system tax incentives and other information. By talking to your tax professional, or your solar energy system provider you learn the tax incentives that the federal government offers.
- Accelerated Depreciation – Businesses may be able to deduct up to 85% of the value of a solar energy asset from your company’s taxes. This provides a significant offset to the installation costs of a solar energy system. (See your tax professional for your specific situation.)
While your installation costs will vary, depending on your state, budget, size of your system, tax incentives, and so on, here are some figures to give you an idea of what a solar energy system could cost.
NOTE: These are national averages and include the older 30% tax credit. These are included ONLY as examples. Your solar energy system provider will provide you with figures that reflect the actual cost of your individual system.
- Small Commercial Solar Panel System (25kW) – Average: $50,211
- Small to Medium Commercial Solar Panel System (50kW) – Average: $100,423
- Medium Commercial Solar Panel System (100kW) – Average: $200,846
- Large Commercial Solar Panel System (250 kW) – Average: $502,113
As stated above, these are averages after the older 30% tax credit and are for illustration purposes only. Your solar energy system provider can give you up-to-date tax credit information and an accurate estimate for the installation cost of your solar energy system.