What is a Commercial Solar Panel System?

Commercial and industrial (C&I) solar installation involves equipping properties with photovoltaic (PV) systems to produce clean, cost-effective electricity. This sector spans a broad range of system designs, customer types, and project sizes, serving not only businesses but also government entities, schools, universities, nonprofits, and religious organizations.

Like residential systems, commercial solar setups use panels and inverters to produce and convert energy, often with optional add-ons like solar batteries or EV chargers.  While savings vary by project, rising energy costs and strong incentives make commercial solar a smart investment for most organizations.

How does a commercial solar system work?

A commercial solar system works the same way a residential solar system works, just on a larger scale. The solar panels, mounted on the roof, ground, or on a carport, capture sunlight, which generates direct current (DC) electricity which is then converted into usable alternating current (AC) by inverters.  

If a solar system produces more energy than is being used, the excess is either sent back to the grid or stored in a battery, depending on the system setup. In most areas, surplus energy sent to the grid will earn energy bill credits.

How much does a commercial system cost?

Commercial solar system costs vary more widely than residential installations because there is significantly more variability in system size and use for commercial systems.  

Four of the largest factors influencing commercial solar prices are:  

System size: System size has the largest influence on the price of a commercial solar system – the more panels you need, the higher your material and labor costs will be.  

Installation location: Roof-mounted systems will generally be cheaper than ground mounted or carport systems because they require fewer materials and take less labor to install. Within roof-mounted systems there can still be significant variation in price depending on the type of roof, the slope of the roof, and the attachment style used.

Add-ons: Adding batteries, EV chargers, and custom carports to a commercial solar system can be expensive but may be worthwhile or even required depending on the type of business, building code requirements, or location.  

Available incentives: There are a variety of federal, state, and local solar incentives available to make commercial solar systems more affordable, depending on location, type of organization, types of materials used, etc.  Incentives are a super important part of the cost assessment of a commercial system as they can help offset up to 50% of the cost of a new system.

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Interested in a personal cost assessment? Contact TENCO SOLAR and we will generate a cost estimate in 72 hours.

Advantages of commercial solar systems

Reduced operating costs

Switching to solar energy is a smart financial move for building owners, because a commercial solar system can offset most or all a business’s energy use, leading to lower operating costs and freeing up capital for growth. Solar also provides long-term financial stability by shielding businesses from rising and unpredictable utility rates. After the initial investment is paid off, companies benefit from virtually free energy for the lifespan of the system.

Environmental Benefits and Improving Consumer Opinion

Switching to solar is a powerful way to reduce your company’s carbon footprint and show that your business is environmentally responsible. It helps cut emissions and pollution while aligning with growing consumer expectations and sustainability standards. Installing a commercial solar system also sends a strong message to current and potential employees, fostering pride and increasing job satisfaction. More and more people want to work for companies whose values reflect their own, and going solar is a clear step in that direction. Even a small system can make a meaningful impact—and you can proudly share those efforts to strengthen your brand’s sustainability message.

Incentives and Tax Benefits

While installing a commercial solar system requires an upfront investment, federal, state, and local governments and even utility companies are offering incentives for solar conversion that can boost long-term savings. By far, the most lucrative incentive is the federal Investment Tax Credit (ITC) which offers organizations a 30-60% tax credit for installing a commercial solar system.  Businesses can take advantage of additional tax savings through the Modified Accelerated Cost Recovery System (MACRS), which allows for accelerated depreciation of commercial solar systems over the first five years. This helps further reduce taxable income and overall tax liability. Depending on a project’s location and the materials used, an organization may also qualify for even more incentives or savings.