When you start considering something totally new and different for your business, like purchasing a commercial solar system and panels, you might not be sure where to start. What questions should you be asking? Who should you ask? How do you know if the answers you get are accurate, complete and unbiased? As with many new endeavors, it’s likely that you don’t know what you don’t know.
Once you start getting serious about going solar, it’s a good idea to hire an unbiased solar energy consultant to help you make decisions about your solar project—understanding and choosing solar technologies, deciding where your solar installation will go, exploring the different ways to pay for it, knowing how it’ll be maintained and so on. But if you’re just in the initial discovery stages, here are 9 questions you can ask solar panel installation companies (who might be commercial solar dealers, installers, distributors or manufacturers) to get an idea about whether solar is right for your business:
1. How much money can my organization expect to save with a commercial solar power system?
The key to getting a useful answer to this question is to specify that you want a long-term cost savings estimate—such as how much you’re likely to save over 20 years’ time. This is important because solar is meant to last for decades, and one of its main advantages is that it can protect your business from volatile and generally-rising fossil fuel-based energy price changes. If you purchase your solar system, it can take a few years to break even, but then you’ll really start to see the savings. If you lease a solar system or enter into a power purchase agreement (PPA), there’s usually no money required up front, so you can start to see savings in your energy bills from day one.
Also ask your solar provider to run estimates on different solar technologies. Higher-quality solar panels, which cost more and might mean a slightly more expensive lease or PPA, will yield better savings over time than lower-quality panels. When you evaluate commercial solar panels, things like efficiency, durability, useful life and performance levels can make a tremendous difference in the return you can expect to get on your investment.
2. How much upfront capital will my organization need to go solar?
You might think “How much do solar panels cost?” is the right question to ask, but it’s really not. Here’s why: The price of solar panels, as well as the amount of energy they produce, varies widely—and it depends on many factors. The more useful question for businesses is “How much upfront capital will my organization need to go solar?” The answer to that depends on how you decide to pay for your solar project. If you purchase the system outright, the amount of capital you’ll need may depend on how much you plan to finance and your lender’s requirements. But if you choose to lease a solar system or enter into a PPA, you may be able to get solar without any upfront costs. Ask about your options and explore them thoroughly with a solar financing expert to see which model is right for you.
3. What other financial options are available besides purchasing a system outright?
You can also lease a solar system or buy the energy from a solar installation owned by a third party through a PPA. Though the long-term payoff is usually greater when you purchase a solar system, leasing does make sense for many organizations. There’s usually an option to purchase the system at the end of the lease term, so the ability to enter into the lease with little or no money down—plus the option to purchase the system later—may be a win-win for your company. However, be wary of solar companies that only offer leases as an option and push them hard. That may mean that they make their money off of leases and may not be as concerned about finding the right solar solution for your business as they should be.
With a PPA, you buy the energy, not the solar equipment. You get the benefit of a set electricity rate over an extended period of time (usually 20 to 30 years). And similar to leases, you usually have the option to purchase the system outright after some period of time has passed, or you can negotiate a new agreement when your term is over. Entering into a PPA may make the most sense if you have little or no capital with which to purchase a system, or you don’t want to operate and maintain a system but still want the benefits of renewable energy.
4. Is my building or site appropriate for solar?
A commercial solar project site expert or designer can probably give you a preliminary evaluation of your site’s suitability for solar over the phone, but they will have to visit your site(s) to make a final determination. They’ll be looking at available roof and parking lot space, nearby land appropriate for a ground-mounted solar panel array, the angle of the sun and shading, building integrity, soil quality, permitting concerns, grid interconnection requirements and more. They’ll also need to know or look into factors such as building ownership, historical structure status, local ordinances, etc.
5. What size and type of system should I choose for my business?
You can choose rooftop (the most common choice for commercial solar users), carport or ground arrays—or a combination of these. You can have the solar installation on your own site or offsite. You can build just enough solar to meet your energy needs or build more than you need and potentially get credited for any excess energy that you produce (depending on what public policy and utility company practices allow in your state’s energy market). You can also consider implementing a commercial solar energy storage system.
This is a question the solar energy consultant, manufacturer or dealer you choose to work with can answer. They’ll need to analyze your past and current energy needs and evaluate whether or not they can fit enough panels on your site to meet those needs. If your building or site can’t accommodate enough panels, you may need to consider higher-efficiency panels or an offsite solution. But there are many ways to take advantage of solar power, so it’s often just a matter of finding the right solar solution.
6. What types of products do you carry and how do they differ?
If you end up working directly with a solar panel manufacturer, as some companies prefer, they will of course tell you why their products are the best choice. If you start with a dealer or installer, they will make recommendations based on the brands they sell. And while most solar companies will honestly try to find the right solution for your budget, values and energy needs—a third-party solar consultant can help you compare solar products (like panels, inverters, mounting hardware, monitoring software and other system components) in an unbiased way.
Depending on your priorities—saving money long term, contributing to a cleaner environment, improving the value of your commercial property, etc.—you should explore qualities of solar technology like efficiency, reliability, performance, durability, scalability and warranties to determine which solar manufacturers’ products are your best choices. Then you can look for a dealer with a good reputation who provides that technology in your area.
7. Who will be responsible for ongoing operation and maintenance (O&M) of my commercial solar system?
As mentioned previously, solar is a long-term investment that is meant to last for decades. Though quality solar installations are generally very low-maintenance and trouble-free, they do require occasional cleaning, ongoing monitoring and possible repairs to continue performing optimally over time. It’s important to know who will maintain the system, monitor its performance and keep it operating at maximum efficiency. You can do that yourself or enter into a contract with another company. Your O&M needs will be highly contingent upon the size and complexity of your system, but most established solar O&M providers can offer robotic or human panel-cleaning services. They can also offer performance monitoring, reporting, as-needed repair and parts replacement so you don’t have to worry about your solar system at all.
8. What policies and incentives are available for my organization if we decide to go solar?
The biggest incentive currently available is the federal commercial renewable energy Investment Tax Credit (ITC), which might influence your decision to go solar sooner rather than later. It constitutes a significant tax credit of 30% of the value of projects completed through the end of 2019, but that credit begins to decrease year by year after that: 26% in 2020, 22% in 2021 and just 10% thereafter.
In addition to the federal ITC, there may be a variety of other state and local policies and incentives that reward businesses for going solar. Start with a search of the Database of State Incentives for Renewables & Efficiency® (DSIRE®) to see what’s out there for you. Note that commercial solar systems take some time—typically nine months or more—to get installed after the project is initiated. So factor that into your decision-making regarding the ITC and other time-sensitive incentives.
9. Which panels would you (or did you) choose for your own business and why?
A solar dealer’s answer to this question can be the most revealing of all. If their answer is honest and straightforward, it will give you the best idea of what someone who lives and breathes solar all day, every day, really thinks of the panels on the market—including pricing, quality and long-term payoff potential.
There’s a lot to learn and understand about commercial solar power systems when you’re in the beginning stages of exploring solar as an option for your business. If you ask the right questions and push for unbiased answers, you’ll be able to go into the process armed with a strong understanding of what you need and who can provide it—the foundation of good business decision-making.