Solar FAQs For Commercial and Industrial Organizations

Solar panels are increasingly popular. Businesses and non-profits of all sizes are discussing the merits of on-site solar projects. In this post, we cover a few of the most common questions and concerns regarding solar panel that organizations consider.

  • How will solar benefit my company?

Often, the first question organizations ask, when considering a solar-energy project, is how exactly they will benefit. When done right, a solar installation can reduce a business’ operating expenses. The cost of generating energy on or near the site can be cheaper than the cost of buying power from the grid. In addition to savings, organizations can use solar to reduce their exposure to utility rate hikes. Also, solar panels allow organizations to demonstrate their commitment to a sustainable and clean energy future.

  • Will solar panels work in central Pennsylvania?

Some cities in central Pennsylvania rank in the top 10 cloudiest cities in America. The general climate of the region raises questions of how effective solar panels can be in central PA. The simple answer is that solar panels work by converting light into electricity, even on cloudy or overcast days. Although central PA tends to have more cloudy days on average, solar panels still perform well and are growing in popularity around the state. In fact, several organizations and homeowners in Pennsylvania use solar panels to produce a significant portion of their energy needs.

  • Will I lose power if my solar panels do not work?  

No. Most solar installations take advantage of a regulatory framework known as net metering. Net metering allows a solar array to be interconnected to the local electric grid through a buildings local distribution system. The predominant way to achieve this interconnection is known as a behind-the-meter (BTM) connection. In a BTM connection, energy produced by the solar array will first be used by the building with any excess generation fed back to the utility grid. The excess generation is credited to the business’ account and will be applied to electric usage during times of low solar production. In Pennsylvania, if the solar array generates more electricity than what the business uses in a year, the utility will purchase the excess generation at a wholesale rate. A feature of BTM connections is that they do not interrupt your current electric distribution system. In the unlikely event that the solar panels stop operating, the building’s electric needs will continue to be met by the utility grid without interruption.

  • How much can my business save with solar?

Savings from solar depend on a variety of factors: the size of the solar array, the avoided rate of electricity, and the financing approach all determine the net savings that a solar array can deliver. We frequently see savings of 10 percent to 30 percent for third-party funded installations.  For solar arrays that are purchased directly, businesses can save as much as 70 percent when comparing the levelized cost of solar energy to the avoided rate of electricity.

  • How do I know if I qualify for tax credits and other incentives?

Currently, solar installations qualify for a federal investment tax credit (FITC). Both businesses and individuals can take advantage of this tax credit. Certain states also offer their own incentives that may apply to a solar array. The Database of State Incentives for Renewables and Efficiency (DSIRE) website is a great resource for keeping up with state-specific incentives. For more information about incentives for solar installations in Pennsylvania, see our recent blog post on the topic.

  • How can I fund a solar installation?

There are a variety of options for funding a commercial and industrial (C&I) solar installation. The options primarily fall into two categories: direct ownership or third-party funding. Direct ownership is also referred to as a cash option. The organization directly funds the purchase using a debt instrument or retained earnings. The third-party option typically requires no upfront capital from the organization. In most cases, solar developers build, own, and operate the solar array on the host organization’s property. The organization agrees to purchase the power produced from the solar array for a period. For more information on solar funding approaches, read our blog post on the topic.

Adopting solar energy is a substantial decision for many organizations. There are a variety of approaches to consider and a few pit falls to avoid. That is why we offer a free, comprehensive feasibility study for organizations that are considering solar energy. Our consultants will work with your team to evaluate the feasibility of a solar installation. Contact us for a free consultation.