10 Thing Your Business Needs to Consider Before Going Solar

Commercial solar installations are everywhere. In parking lots at schools and bus depots. Ground-mounted in farm fields, community solar open spaces, and at water treatment plants.

Understanding the variables that make every commercial solar site or project unique before beginning construction is indisputably important to the success of any solar PV project. With many years of experience developing commercial, industrial, and municipal projects, we’ve learned what needs to be considered — from energy demand, site conditions, financial options, and more — before jumping into onsite solar PV generation.

Here are 10 common variables and client needs to keep in mind.

1. What are your energy use habits today (and are they changing)?

To determine how large your solar PV system needs to be, it’s critical to understand your energy use. A detailed analysis of your energy bill for 12 to 18 months provides the data necessary to help understand current and projected utilization, including:

Use: Track and understand the impacts, such as seasonal cooling, that alter your energy bill. Also look at potential facility changes that may alter usage – for example, if you plan to add EV charging stations in the future, your use will probably increase.

Demand: Surges in use may include spikes in energy charges, based on your facility’s location, electricity rate, climate, and more.

Programs: Are you taking advantage of demand response or other utility incentives that could lower your energy rates?

Time of Use: Many utilities are moving to a time of use rates, charging more when there is more demand for grid energy. On-site solar generation plus battery power storage is a big consideration under TOU.

2. Consider energy resiliency and the cost of grid downtime

Energy resilience is the ability to resist, respond to, and recover from disruptions to utility power. How much resilience your business needs will depend on your operations, the critical services you provide, or processes that need to be powered regardless of what affects the utility grid.

A solar solution alone will not effectively keep the lights on in the event of a power grid blackout. If resiliency is essential, then storage, “islanding” software, specialized inverters, and/or other technologies are needed to enable your onsite generation to operate independently from the grid.

3. Is the site right for commercial solar? Will a utility-scale project work?

Carports and ground mounts are the basic solar installation options. Which option is best for your company will depend on a host of factors:

Terrain matters for ground-mount systems. It is important to understand your soil conditions if this is the option that you think will work best. This can be handled relatively quickly with a competent third party geotechnical analysis.

Carports and canopy systems offering a rigid structure over a parking lot or other land can be effectively used for a solar array. Obtaining a handle on clearance dimensions is an important variable for computing the cost of the system.

4. What about the weather?

Solar plants must withstand local weather conditions, including hail, wind, rain, ice, and snow. It’s not unusual for PV panels to be damaged by weather events. Lightning protection may also need to be factored in for canopy systems. Fortunately, systems can be designed to minimize the impact of weather-related damage. Appropriate insurance coverage and plans for operations and maintenance should also be given to start-of-project considerations. More importantly, if you live in a region where it is overcast 40% of the year, that will reduce production from a solar array.

5. Comply with building codes and local utility regulations

It is crucial to work with a developer who understands all code requirements, including local, utility, and national codes. For example, while the National Electrical Code already has a 2020 edition, most of the country is still following the 2017 NEC requirements. The NEC version can vary by location, affecting local hardware, equipment, and operations. A great example is the NEC’s Rapid Shutdown requirements that enable emergency personnel to de-energize a system quickly and easily in the event of a fire. Ensure that your developer has adequate experience and staffing to keep up with various codes and changes.

6. Transmission type and distance

Determine the infrastructure needed to move energy from where it is generated to where it will be used and cost-calculating. If you need to move the generated power from a PV array more than a quarter mile, there may be substantial costs. For example, if an array is built to power an agricultural operation with multiple irrigation pumps — where operations are typically spread out over a large expanse of land – then moving power from the array to where it is used may involve substantial infrastructure, building power lines, and working with the Authority Having Jurisdiction (AHJ) to understand local requirements.

7. Factor in local labor rates

From construction to electricians to equipment operators, labor rates vary widely based on location. It is important to work with a project developer who has extensive knowledge of commercial and utility-scale solar. These leaders will insulate you from variable risks such as fluctuating labor, compensation, and insurance.

8. What are the ROI implications?

This one may sound self-explanatory, yet it often trips up long-term project returns on investment (ROI) if not factored adequately before projects begin. Investment in commercial solar and solar plus storage is a distinct property improvement with considerable long-term value. Sales taxes at the point of purchase shall also be factored in as well as any additional property appraisals, such as parcel taxes. Importantly, some jurisdictions may exempt select business types from sales tax on solar. In addition there are several tax incentives offered on both the federal and state level for installing a solar system. Some Utility providers even have a credit available. When planning a project be sure to take advantage of all available incentives and factor that into the ROI.

9. Explore financing, local exemptions, and applicable incentives

If you’re investing in on-site solar, there are a lot of factors to consider. From the U.S. Federal Investment Tax Credit (ITC), which currently offers a 24% tax credit this year, to state and local incentives, incentives vary and change. If dealing with third party financing, assure that your finance partner has the wherewithal to understand the options and simplify the process of financing. In addition, Utility Providers will often have credits that pay for a portion of the installment if it is tied to the grid and oversized for your usage needs.

10. Don’t forget operations and maintenance

Do it yourself or pay experts. That’s the decision when it comes to operations and maintenance (O&M) to keep your solar energy generation at peak performance. Before deciding, remember that reputable solar EPCs will guarantee solar panels for 25 years. However, the panels themselves will often work 35, 40, or more years. Effective O&M strategies will make a significant impact on your bottom line and return on investment.