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How Much Do Commercial Solar Panels Cost?

Solar power is an ideal choice for businesses aiming to cut down on operating costs and enhance their overall profitability. In addition to minimizing the company’s environmental impact, adopting solar energy sends a clear message to customers and stakeholders about the company’s commitment to sustainability and the transition to renewable energy.

Whether you’re a business owner or a decision-maker contemplating adopting commercial solar power or simply someone interested in exploring solar electricity for your company, this blog provides comprehensive information on the costs associated with commercial solar panels.

What are Commercial Solar Systems?

How Much Do Commercial Solar Panels Cost

Commercial solar refers to solar panel installations in the commercial and industrial sectors, encompassing a wide range of solar power applications outside of residential, utility-scale (solar farms), or home-based solar panels. This category extends to businesses, nonprofits, and government entities.

Numerous businesses and organizations have embraced commercial solar energy systems, including:

  1. Vineyards, farms, and ranches
  2. Warehouses and factories
  3. Clinics and hospitals
  4. Schools and childcare facilities
  5. Parking lots and garages
  6. Commercial office buildings
  7. Retail stores and shopping centers

A diverse array of businesses can derive substantial benefits from harnessing solar energy.

Where Are Commercial Solar Installations Possible?

Monocrystalline Solar Panel

Commercial solar systems offer versatility in installation, catering to diverse structures and environments for organizational use. In contrast to utility-scale plants, mainly ground-mounted solar farms, and residential solar setups primarily located on home rooftops, the demand for commercial solar panels is high. Service providers in this sector operate from various locations.

Here are some examples of where commercial solar panels can be installed:

  1. On flat roofs or other level surfaces
  2. Sheds and barns
  3. Awnings and rooftops of commercial buildings
  4. Patio coverings, gazebos, and pergolas
  5. Parking shades and garages
  6. Mounting poles
  7. Ponds and artificial lakes, often referred to as “photovoltaics”

This demonstrates the adaptability of commercial solar panels in terms of deployment locations.

Cost of Commercial Solar Systems

solar financing

Over the recent decades, advancements in technology and market expansion have led to a notable decline in the cost of installing solar panels. According to research from the International Renewable Energy Agency (IRENA), the global cost of solar photovoltaic power witnessed an 82% decrease between 2010 and 2019, suggesting a similar trend in installation prices.

The reduction in costs comes as no surprise, given the substantial number of enterprises in the solar industry. The National Solar Database of the Solar Energy Industries Association reports the existence of over 10,000 solar enterprises in the United States alone.

As of Q4 2021, the Solar Energy Industries Association stated that the average cost of commercial solar panel systems was $1.45 per watt, slightly lower than the $3.06 cost of installing a system in a residential setting.

When considering the cost of a properly installed solar power system in the US, several factors come into play. The size of the solar system is crucial, as energy needs vary between small businesses and large enterprises. Larger companies generally require more energy, resulting in a higher overall cost.

The type of equipment is another significant factor for commercial solar use. Solar panels come in different types, including monocrystalline, polycrystalline, and thin-film panels. The choice depends on factors such as cost, efficiency, and aesthetics.

In the United States, the average cost of a solar system ranges from $2.60 to $3.20 per watt. This investment should ensure top-notch customer service throughout the entire 25-year lifespan of the solar panels.

For residential installations in 2022, the average cost is between $18,000 and $20,000. After applying for the federal solar tax credit, this cost would be reduced from $13,320 to $14,800.

For small to average-sized businesses, the investment may range from $50,000 to $100,000, with the opportunity to benefit from a 26% federal tax credit.

Determining Commercial Solar Cost Using PV Watts

The size and location of the solar system significantly influence the cost of commercial solar panels. PV Watts provides a straightforward method to calculate your building’s sunlight exposure. Developed by the National Renewable Energy Laboratory (NREL), PV Watts is a tool designed to estimate the energy output and cost of global photovoltaic (PV) energy installations.

To assess the sunlight exposure of your commercial building, PV Watts utilizes your facility’s address and weather information. By entering your building’s address into the “Input a house or business address” section on PV Watts and following the provided instructions, you can determine the cost of implementing an industrial solar power system.

Efficiency is a crucial factor in commercial solar power systems. Most solar panels have an efficiency range of 15% to 20%. When the sky is clear around noon, the sun’s energy reaches the Earth’s surface at approximately 1,000 watts per square meter. PV Watts defaults to this 1,000 watts per square meter standard.

Considering a 15-20% efficiency solar panel under ideal conditions, a 1 square meter commercial solar panel would generate 150-200 watts of electric power per square meter. The solar panel array displayed on your roof using PV Watts is measured in square meters.

PV Watts offers three types of solar panels, each with a different efficiency rating:

  1. Standard: 15% efficiency (crystalline silicon/glass)
  2. High-end (crystalline silicon with an anti-reflective coating): 19% effectiveness
  3. Thin Film: 10% efficiency (thin film/glass)

Choosing the appropriate type of solar panel depends on efficiency, cost, and specific project requirements. PV Watts provides a valuable tool for assessing these considerations and estimating the potential output and price of your commercial solar power system.

Incentives and Advantages of Commercial Solar Systems

Enterprises, governmental agencies, and nonprofit organizations have compelling reasons to adopt solar energy, with various advantages and incentives associated with commercial solar panel systems:

1. MACRS Depreciation:

 The Modified Accelerated Cost Recovery System (MACRS) allows a recovery period of five years for solar energy equipment. Given the guaranteed lifespan of solar panels (at least 25 years), businesses benefit from substantially reducing tax obligations during the initial five years of system ownership. This depreciation can be combined with the solar tax credit, enhancing financial benefits.

2. Flexible Financing Possibilities:

Commercial solar financing offers flexibility through various payment options:

Solar Lease: Businesses pay a fixed monthly fee to use solar panels from a solar company.

Solar Loan: Obtaining a loan covers the cost of solar panels, payable over five to twenty years.

Power Purchase Agreement: Companies agree to pay a predetermined price per kilowatt-hour for electricity generated by the solar panels.

Solar leases and Power Purchase Agreements may not qualify for tax credits, but solar systems purchased with a solar loan are eligible. Solar loans often provide the best return on investment.

3. Tax Credits for Solar Energy and Other Incentives:

The Solar Tax Credit, or Clean Energy Credit, subsidizes 30% of the installation cost of solar panel systems. For example, a $50,000 investment in a solar power system would result in a $15,000 tax credit. Additional utilities, states, and local government incentives may further support businesses adopting solar energy.

4. Green Credentials:

Addressing customer concerns about climate change and environmental impact is crucial for businesses. Demonstrating a commitment to sustainable development and renewable energy enhances brand loyalty. Consumer preferences increasingly align with socially responsible and environmentally conscious choices. Many successful corporations, such as Apple, Google, Amazon, Walmart, and Target, have embraced solar initiatives, reflecting the growing importance of green energy.

5. Quick Payback Period:

The combination of power bill savings, MACRS depreciation tax, and subsidies contributes to a strong return on investment for commercial solar projects. Considering solar panels’ longevity (typically 25 to 30 years), the payback period is relatively short, making it a financially viable and sustainable investment.

6. Electric Bill Offset:

A commercial solar power system can completely offset a company’s electricity costs. Grid-tied systems allow businesses to export excess power to the grid and import power when needed, facilitating a complete offset of energy expenditure. This provides protection against future utility rate increases and offers the opportunity to earn the total retail rate for exported power through net metering.

Complete electric bill offset ensures resilience against utility rate fluctuations, and the surplus energy generated results in positive cash flow. Whether through ownership or financing, businesses that transition to solar often experience reduced costs or, in the case of ownership, even free electricity once the initial investment is recouped.

Solar Earth Inc Designs and Installs Commercial Solar Systems

You must have been considering how much commercial solar installations cost for a while; we hope we have cleared some of your confusion, and now you can get started with your commercial solar project. Going solar won’t only benefit your company, but it also contributes to reducing your carbon footprint and the production of clean energy. You’ll be surprised how your consumers react to this initiative, resulting in increased brand loyalty, which is a positive sign for your business.

If you want to step forward and go green, contact Solar Earth Inc. to get detailed information about the expenses and setup process of a commercial solar power system.


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Solar Earth Inc., with expertise and certifications, empowers your home for enhanced energy generation. Contact us today to transform your home into a sustainable, long-term renewable energy source.

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