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Commercial and industrial solar panel installations: an overview

Commercial and industrial (C&I) property owners can benefit from installing solar energy on business or factory roofs or as ground-mounted systems on a campus. Many corporations have massive manufacturing facilities and commercial buildings with expansive, flat roof space – the perfect place to generate clean, inexpensive solar power while reducing their carbon footprint.


Key takeaways

  1. Large facilities with plenty of roof space make commercial and industrial buildings the perfect application for solar panel installations.

  2. Commercial installations will range from $100,000 for a small business up to $1 million or more for larger businesses with high energy needs.

  3. A typical large scale solar installation may have many 96-cell solar panels.

  4. Installing solar panels can be a great way to save money for commercial business owners.

What’s in this article?

What is a commercial solar panel system?

Most commercial and industrial solar installations are substantially larger than a typical residential solar power system. For perspective, the average size of a residential solar panel system is around 8 kilowatts (kW), while a commercial solar energy system can be up to several megawatts (MW), depending on the electricity needs of the facility. 

Commercial solar power is considered “distributed generation,” meaning that the energy produced by the system is used at or near the point of generation. Distributed generation projects, such as rooftop or ground-mounted residential solar, are usually connected to the local electric grid. This allows commercial property owners to take advantage of net metering, a policy enabling distributed generation customers to send unused electricity back to the grid in exchange for electricity bill credits.

What does a commercial or industrial solar installation look like?

The solar panels used in commercial and industrial-scale installations are often larger than residential panels for homeowners. Large-scale commercial solar installations usually use 96-cell or greater solar panels, meaning each panel is comprised of 96 or more individual solar photovoltaic cells. Comparatively, a typical residential solar panel will have 60 or 72 cells. C&I installations also use larger and more advanced grid-tied inverters.

There are often many installation options for C&I projects, including factory roofs, solar carports in parking lots or large ground-mounted arrays. Unlike most rooftop solar arrays, commercial and industrial solar systems often include intricate racking systems to elevate and tilt the panels. Some commercial panel arrays even use racking with tracking capabilities, allowing the panels to face different directions throughout the day – this helps increase the amount of direct sunlight that hits the panels (and maximizes electricity production!).


Incentives for commercial solar installations

There are multiple rebates and incentives available for commercial solar installations. In addition to the investment tax credit (ITC or solar tax credit) that allows for the deduction of 30 26 percent of the cost of the solar energy system from federal tax credits , commercial business owners can write off the value of their solar installation through either Bonus Depreciation or the Modified Accelerated Cost Recovery System (MACRS). This incentive reduces businesses’ tax burden to speed up return on investment for going solar. 

How much does a solar system cost?

Because each commercial solar project is highly unique, it’s difficult to accurately determine how much commercial installations typically cost. However, there are a few trends to be aware of when it comes to commercial solar pricing.

While there are some high upfront costs, compared to residential solar, cost per watt ($/W) is almost always a good deal lower for commercial installations. This is due to economies of scale – as the system size increases, the additional cost of each panel is lower, so overall, the average cost to install each panel is lowered.

When it comes to the average total cost of a commercial solar panel installation process, the best we can do is a broad range. Typically, commercial installations will range from $100,000 for a small business to $1 million or more for larger businesses with high energy needs. The more electricity you use, the higher the upfront cost will be, but the larger your savings may be over time — benefitting your bottom line!

There are also different financing options, including power purchase agreements (PPAs). Instead of directly purchasing with cash, this option lets you buy the energy generated from the system in your facility, even if it is owned by a separate entity. It is important to note that you will not be eligible for the ITC if you sign a solar lease or PPA for your C&I installation.

Advantages of going solar for businesses

There are many good reasons for businesses to generate their own electricity with solar panels:

Solar is cost-effective and saves money

One of the best reasons to install a commercial or industrial solar panel system is the financial benefit. Offsetting some or all of your electricity use at a factory or small business with solar reduces electric bills and energy costs from day one. Plus, solar panel systems can operate effectively for over 30 years, and once your business makes back the upfront investment for their system, you can generate free electricity from their panel system for many years after. Solar panels also usually come with warranties of around 25 years, so you can count on them lasting for a long time.

Solar helps foster a sustainable brand image

Solar panels are a visible signal that your company is committed to sustainability and a clean energy future. How companies and corporations are responding to environmental responsibility is an increasingly important issue; by taking action to support clean, renewable energy, companies can signal to potential customers that they care about more than just turning a profit. Installing commercial- grade solar is a great way to generate positive buzz with stakeholders and the local community, whether you are a nonprofit or a commercial business.

Installing solar supports the local economy

Many of the highest quality solar panel installation companies are local businesses, and contracting with them for a large commercial installation increases demand for high-quality, local labor. Additionally, the money spent on installation goes right into your local economy.

Start your solar journey today with EnergySage

EnergySage is the nation’s online solar marketplace: when you sign up for a free account, we connect you with solar companies and solar farms in your area, who compete for your business with custom solar quotes tailored to fit your needs. Over 10 million people come to EnergySage each year to learn about, shop for, and invest in solar. Sign up today to see how much solar can save you.


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