As the cost of energy continues to rise, more commercial property owners are turning to solar panels as a way to reduce operating expenses and enhance sustainability. Solar energy not only helps businesses cut energy costs but also supports environmental goals, boosts property value, and can even create new revenue streams. In 2024, the savings and benefits of commercial solar installations are more significant than ever. This blog explores how much commercial properties can save by investing in solar panels and the key factors influencing these savings.
1. Substantial Energy Cost Savings through solar panels
Commercial solar panels offer significant reductions in energy bills, allowing businesses to save between 10% and 75% on their annual electricity costs. The amount saved depends on various factors, including the size of the solar panel system, local energy rates, and the amount of sunlight the property receives. According to the Solar Energy Industries Association (SEIA), businesses with large-scale solar installations can save thousands of dollars each year by generating their own power instead of purchasing electricity from the grid​ (King Energy).
For example, a 100 kW solar panel system, commonly installed on medium-sized commercial properties, can save up to $20,000 annually in energy costs, depending on the location and energy consumption. Over a 25-year period, this translates into savings of up to $500,000, making solar an attractive long-term investment.
2. Long-Term Financial Returns and Payback Periods
Commercial solar systems offer excellent financial returns, often exceeding the initial investment within a few years. The typical payback period for commercial solar installations ranges from 5 to 7 years, after which businesses can enjoy free electricity for the remaining lifespan of the system—usually 20 to 25 years. This results in a high return on investment (ROI) that strengthens the company’s financial position.
According to Pyron Solar, the average cost for commercial solar panels ranges between $2 to $3 per watt, with total installation costs for systems ranging from 100 kW to 500 kW falling between $200,000 and $1,500,000​ (Pyron Solar). While the upfront costs may seem high, the significant savings on energy bills combined with financial incentives make solar a smart investment for commercial properties.
3. Protection Against Rising Energy Costs with solar panels
One of the most compelling reasons to invest in solar panels is the protection they offer against volatile energy prices. Electricity costs have been steadily increasing, and businesses that rely on traditional energy sources are vulnerable to sudden rate hikes. By generating their own power, commercial properties can lock in lower energy costs, providing stability and predictability for future financial planning.
Solar energy allows businesses to hedge against future increases in utility rates, which can result in substantial long-term savings. According to the U.S. Department of Energy, electricity prices are expected to continue rising due to increased demand and aging infrastructure, making solar energy a valuable tool for cost control ​(King Energy).
4. Access to Financial Incentives and Rebates
In 2024, commercial properties have access to various financial incentives that make solar installations even more attractive. Federal tax credits, state rebates, and accelerated depreciation benefits such as the Modified Accelerated Cost Recovery System (MACRS) can significantly reduce the upfront cost of installing solar panels. The Investment Tax Credit (ITC) allows businesses to deduct up to 30% of the cost of solar installations from their federal taxes, directly lowering the investment required.
Some states and municipalities also offer additional incentives, including grants, low-interest loans, and net metering policies that provide credits for excess solar energy fed back into the grid. These incentives make solar installations more affordable and boost the overall financial returns of the project.
5. Enhanced Property Value and Sustainability Credentials
Solar panels not only reduce operating costs but also increase the value of commercial properties. Properties with solar installations are often seen as more sustainable and forward-thinking, attracting tenants and buyers who prioritize environmental responsibility. According to the National Renewable Energy Laboratory (NREL), properties with solar panels typically sell at a premium compared to those without, due to the added value of lower energy costs and the green credentials they provide ​(Pyron Solar).
Additionally, having solar panels can improve a company’s brand image by demonstrating a commitment to sustainability. This can be a critical factor for businesses looking to enhance their corporate social responsibility (CSR) profile and appeal to eco-conscious customers.
6. Potential New Revenue Streams
Commercial properties can also generate revenue by participating in community solar programs or entering into power purchase agreements (PPAs). These programs allow property owners to sell excess energy generated by their solar panels back to the grid, providing an additional income stream. As community solar programs grow, more commercial property owners will have the opportunity to monetize their solar energy production, benefiting both their business and the local community.
Conclusion
Investing in solar panels is a smart financial decision for commercial property owners in 2024. With substantial energy savings, attractive financial incentives, and the added benefits of increased property value and sustainability, solar energy offers a clear path to reducing costs and enhancing brand reputation. As solar technology continues to advance and the market for renewable energy grows, now is the perfect time for businesses to harness the power of the sun and secure their energy future.
For more information on commercial solar savings, incentives, and installation options, visit the U.S. Department of Energy’s website and explore the latest industry insights from Solar Energy Industries Association (SEIA).
By understanding the financial and operational benefits of solar energy, commercial property owners can make informed decisions that drive long-term success and sustainability.
Have Questions about solar panels, ways to save with green energy, or use the financial initiatives and rabats? Give us a call, we are here to help you and guide you: InBalance: +312 907 1820
Alex Weiner RA, LEED, AP
Alex is the founder and Managing Director of InBalance. He is a performance minded leader with diversified 25-year record of success in Architecture, Construction/Project Management, Real Estate Development and Multi-Site Program Management.Â