Commercial Solar Installation & Power Solutions

The financial benefits of installing a commercial solar system include significant reductions in electricity bills, protection against rising energy costs, and increased property value. Businesses can also benefit from various tax incentives and rebates that mitigate the initial costs of installation. Additionally, solar power can provide a predictable energy cost, which helps in budgeting and financial planning.

The ROI for a commercial solar installation varies based on several factors including the cost of the system, financing, energy savings, and incentives. Typically, commercial solar installations have an ROI period of 3 to 7 years, with returns over the life of the system often exceeding 20%. After recovering the initial investment, the savings on utility bills translate directly into increased profits.

Several financing options are available for commercial solar projects:

• Power Purchase Agreements (PPA): You agree to purchase the electricity generated by a solar system installed on your property at a set price, which is usually lower than the utility rate.
• Roof lease: You lease your roof space to a solar provider who installs and maintains the solar system, and you benefit from the energy produced at a lower cost.
• Equipment loans: Similar to traditional loans, where you borrow money to purchase and own the solar system outright.
• Commercial Property Assessed Clean Energy (CPACE): Financing that allows property owners to finance the upfront cost of energy improvements and pay the costs back over time through a voluntary assessment on their property tax bill.

Incentives vary by location but generally include federal tax credits such as the Investment Tax Credit (ITC) which allows you to deduct a significant percentage of the installation cost from your federal taxes. Many states and local governments also offer additional incentives like rebates, property tax exemptions, and grants. Utility companies may offer incentives in the form of rebates or performance-based incentives.

Tax-exempt entities, including nonprofits, government agencies, and tribal organizations, cannot use traditional tax credits because they have no taxable income. However, the Inflation Reduction Act introduced elective pay (also called direct pay), which allows eligible tax-exempt organizations to receive the value of the ITC as a direct payment from the IRS rather than as a credit.

The base rate is 30% for systems meeting prevailing wage and apprenticeship requirements, with bonus adders that can increase that amount. Elective pay requires IRS registration prior to construction and specific filing procedures. FSG works with nonprofits and tax-exempt clients on solar projects and can connect you with advisors familiar with these requirements.

The Inflation Reduction Act enhances the benefits of the Investment Tax Credit (ITC), increasing it and extending its availability. It also introduces additional bonuses for projects that meet certain domestic production criteria or are installed in energy communities. These enhancements make solar projects more financially attractive and feasible.

The expected lifespan of solar panels is generally around 25 to 30 years, although they can continue to function beyond this period at reduced efficiency. Other components, such as inverters, may have shorter lifespans but can still carry warranty coverage up to 20 years. 

Commercial solar power systems require minimal maintenance, primarily involving routine cleaning and periodic checks to ensure that all components are functioning correctly. Certain regions require cleaning due to environmental factors.

Cleanings are not a part of FSG's annual system check.

The size of the solar system needed depends on several factors, including the energy consumption of the business, the available space for installing panels, and the geographic location. A detailed energy audit and site analysis will be conducted to determine the optimal system size that will meet the energy needs.

The environmental benefits of installing commercial solar panels include reductions in greenhouse gas emissions, decreased dependency on fossil fuels, and a smaller carbon footprint. Solar power is a clean and renewable energy source that contributes to sustainable business practices.

The majority of our process is offsite work. Working with local permitting officials, procurement, and incentive paperwork takes the most time.

Depending on the project size we are physically on site for a few weeks to a few months. The entire process from contract signing to an operating system takes 8 to 14 months.