When considering installing solar technology, it is common to wonder just how much commercial solar panels cost. The answer to this question will vary based on the size and scope of the project. Determining how much commercial solar panels cost can also be an easier task with an understanding of commercial solar pricing and financing options.
Commercial solar pricing
Solar pricing is measured in dollar per watts. Watts are used to measure solar system size depending on how much energy the business or entity that owns the system requires it to produce. On average, commercial solar systems are priced at $2.87/Watt before rebates or tax incentives. As solar market grows, solar technology and companies that install it are becoming more readily available. This has lead to an almost 90% decrease in solar panel prices since 2010.
Solar panel and system prices are not the only costs associated with solar panel installation. It is also important to factor in labor, engineering and design, permitting, and interconnection application costs that come with any project installation.
How to finance commercial solar
How much commercial solar panels cost can depend on how your company chooses to finance its project. There are many different options available for solar project financing. It can be important to familiarize yourself with what options are available so that when it comes time to finance your project you select the option that works best for your company. Some of the most common options are outlined below.
Power Purchase Agreements (PPAs)
PPAs are long-term electricity supply contracts that involve three parties: developer, investor, customer. As the customer, you would provide the roof or land space to house the solar system and it would be installed with no upfront costs to you. The developer would be responsible for the designing, building and acquiring funding aspects of the project and the capital would come via the investor. The customer would pay a fixed rate, that is typically lower than the local utility’s, for use of the system after the project is installed.
Third Party Ownership
Third-party ownership is another way to reduce commercial solar panel’s cost. For the most part, it occurs in two forms: PPAs and solar leases. The PPA model is outlined above. A solar lease involves a contractual agreement between two parties: developer and customer. The customer pays for the solar system over time as opposed to paying for the power generated by the system as one would in a PPA agreement.
Commercial Property Assessed Clean Energy (C-PACE)
A C-PACE model is an alternative renewable energy funding options reserved for commercial properties larger than 25,000 square feet. This type of agreement structures repayment for the project with use of part of the energy savings derived from the project each month. Renewable and energy efficiency upgrades are tied to the project and require no upfront capital from the customer to get off the ground.
Solar Investment Tax Credit
The Solar Investment Tax Credit is a federal tax incentive that guarantees a faster return on investment for solar projects. This incentive is easy to quality for, offers a 30% subsidy for the cost of installing solar panels, and leaves your business with more cash to spend on other endeavors.
Accelerated depreciation allows businesses to deduct 85 percent of the value of the solar asset from their taxes. This will significantly offset the upfront cost of solar technology and allow businesses to receive a quicker return on their investment.
Solar Renewable Energy Credits
Performance based incentives like Solar Renewable Energy Credits (SRECs) that allow solar asset owners to earn additional income from solar electricity generation. Every MWh or 1,000 kWh or solar electricity generated by a solar panel system earns the owner one SREC.
Energy Efficiency Rebates
States or local utility provider often offer rebate programs that provide cash to subsidize solar panels and other renewable energy technology. Rebates can reduce system costs by 10-20 percent. This is another great way to offset how much commercial solar panels cost.
Interested in learning more about how much commercial solar panels cost?
If your organization is interested in learning more about how much commercial solar panels cost, EnergyLink’s team of experts is prepared to answer that question for you. Our team can offer a free energy audit and walk you through financing options that will work best for your company or organization. To get started on your next solar project click the link below for a free quote or speak to a team member by calling (866) 218-0380.