Commercial solar power offers a great return on investment. According to the U.S. Energy Information Administration (EIA), the average commercial building spent $650.04 on electricity in 2021 (likely on par with most small businesses). This equates to $7,800 in operating costs per year. Over a 20-year period, a business would spend approximately $156,010 on energy costs.
Based on the same EIA dataset, the average commercial building consumed approximately 69,540 kWh of electricity in 2021. Let's assume your business installs a solar panel system that offsets 90% of this electricity consumption, and let's also assume that the system's production rate (the ratio of estimated energy output over time (kWh) to its actual size (W)) is 1.4 (in the US, this typically ranges from 1.1 to 1.7 depending on location).
How big a system does your business need? Using the numbers above, you get:
System Size (W) = Annual Consumption (569,540 kWh) * System Offset (0.9) / Production Rate (1.4)
This results in a system size of 44,704 W, or approximately 45 kW. According to the table above, the cost of a 45 kW system would be approximately $39,150, including ITC and MACRS depreciation over 5 years.
Over 20 years, solar power can save you approximately $101,259 on your electricity bill.
20 year savings = 20 year electricity bill ($156,010) * system offset (0.9) – initial cost of solar system including incentives ($39,150)
Beyond the direct financial benefits, installing solar panels can also insulate your business from electricity price fluctuations and inflation. In many states, electricity prices can fluctuate dramatically depending on demand, creating headaches for business owners who tightly control their cash flow. Installing solar panels allows your business to lock in your electricity rates and reduce your reliance on unpredictable electricity markets, making it easier to budget and plan for the future.