Project financing is a critical factor of commercial solar, and it is important to understand the hidden costs that can significantly impact the project’s budget. As solar energy is becoming increasingly popular among businesses and organizations looking to reduce their carbon footprint and save on energy costs, commercial solar projects are growing in prominence. With this in mind, there are many costs associated with commercial solar projects in the project financing. In this article, we will discuss eight significant hidden costs of commercial solar projects.
Read: How to Plan a Commercial Solar Project with 8 Simple Steps
1. Interconnection Application Costs
One of the most significant hidden costs in the project financing of commercial solar projects is interconnection application fees. The cost of interconnection application fees can range from $100 to $3,500, depending on the state and utility provider. These fees cover the cost of reviewing the interconnection application and ensuring that the solar system is connected safely and efficiently to the grid.
2. National Electric Code Compliance
Another hidden cost in project financing of commercial solar projects is compliance with the National Electric Code (NEC). Rooftop or occupied structures require modular-level rapid shutdown units for 2017 NEC or higher. These devices ensure that the system can be safely shut down in case of an emergency or maintenance. Compliance with the NEC can significantly increase the cost of the project, particularly for older buildings that may require electrical upgrades to meet the NEC requirements.
3. Phase and Voltage of the Electrical Point of Interconnection
The phase and voltage of the electrical point of interconnection can significantly impact the cost of a commercial solar project. The electrical point of interconnection determines the number of inverters, the quantity of wire and conduit, and the size of wire and conduit required for the project. Understanding the electrical point of interconnection can help to reduce the overall cost of the project.
4. Networking and/or Communications of the System to the Local Network
Networking and communications of the system to the local network are essential for monitoring the performance of the solar system. This requires hardwiring CAT5/6 or Fiber network connections to the facility and local network access. The cost of networking and communication equipment can add up quickly, particularly for larger commercial solar projects.
Read: Understanding Renewable Energy Credits (RECs)
5. Racking Mounts
The type of racking mounts used in a commercial solar project can significantly impact the project financing. Flat TPO/EPDM Roofs, Metal Seamed Roofs, and Ground Mount Systems are the most cost-effective to install. Carport Canopies can be 2-3x more expensive. Understanding the type of racking mounts required for the project can help reduce the project’s overall cost.
6. Size of PV Modules
The size of PV modules can also impact the cost of a commercial solar project. Larger wattage modules can help to reduce labor costs and the amount of wire and conduit required for the project. Understanding the size of PV modules required for the project can help to reduce the overall cost of the project.
7. Total PV System Size
The total size of the PV system can significantly impact the cost of the project. Systems over ~250 kW AC sizing start to require interconnection studies from the utility and potential electrical upgrades from the utility on the primary power service. These interconnection studies can be $10,000 – $20,000+. Understanding the total size of the PV system required for the project can help to reduce the overall cost of the project.
8. Distance from Solar Array to Point of Interconnection
The distance from the solar array to the point of interconnection can also impact the cost of a commercial solar project. Ideally, the solar array is within a few hundred feet of the point of interconnection to make a seamless hook-up. Systems that require 1,000+ feet for wire runs get costly with step-up/step-down transformers, additional wire, upsizing wires/conduits and additional labor, making the investment less attractive.
Read: 8 Hidden Costs of Commercial Solar Projects: Simplifying Project Financing
Interested in commercial solar project financing?
If you’re considering investing in a commercial solar project, it’s essential to understand the hidden costs that could significantly affect your budget. To help you navigate these costs, EnergyLink, an ESCO with expertise in large-scale energy projects, offers a team of experts to guide you through every stage of the planning process. With over five years of experience in the middle-market energy space, EnergyLink’s knowledge can help you make informed decisions. Click the link to get started on planning your commercial solar project, or call (866) 218-0380 to speak directly to a member of the EnergyLink team.
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