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Pros and Cons of Installing Commercial Solar Panels in 2023

Pros and Cons of Installing Commercial Solar Panels in 2023

Solar panels have a lot of benefits, which makes it an easy decision for commercial business owners to invest in their buildings. Commercial solar panels can help a business save money, electricity, and the environment. However, commercial solar panels have some cons too.

In this article, we will see the pros and cons of installing commercial solar panels.

Pros of Commercial Solar Panel Installation

  • Reduced Operating Cost – Commercial solar panels can save a big amount of electricity bills for a commercial business. Businesses that use local electricity have to pay a hefty amount every week or month for electricity. But solar energy helps businesses to reduce their utility bills resulting in a reduction in the operating cost by up to 75% on average.


  • Fixed Electricity Bill – The price of local electricity has been increasingly volatile and continues to increase. So, there is no fixed amount that businesses have to pay each month for electricity bills.


    With solar panels, the electricity bill stays far closer to consistent for many years to come. It is not affected by the fluctuating price of natural gas or inflation. So, commercial businesses can pay the same amount of money for electricity every year.


    Also, this helps business owners to easier and more accurately predict their cash flow as they do not have to predict what their electricity bill amount will be next month.


  • Reduced Carbon Footprint – Local electricity uses natural gas or coal to produce energy. This not only reduces natural resources but also emits carbon into the air, which negatively affects the environment.


    Solar energy on the other hand is produced using solar power – the rays of the sun. It does not emit any greenhouse gas into the air and is very environmentally friendly.


    Businesses that use commercial solar panels reduce their carbon footprint from the moment they start using solar panels.


    Solar panels also help businesses to meet their sustainability goals.


  • Green Branding Looks Good on You! – With more focus being put on saving the environment in recent years, everyone is leaning towards using eco-friendly businesses.


    When businesses become eco-friendly, customers get a good image of that businesses. This not only attracts new customers to the business, but the same goes for good employees.


    Commercial solar panels can create a good image for a business, which can enable the business to advertise they are a “green business”. This can demonstrate their commitment to the community and the environment, which can attract more customers and more loyal employees to their company.


  • Low Maintenance Cost – Solar panels have a very low maintenance cost, thanks to having no moving parts. Also, as solar panels are fixed to a surface, most commonly above the roof, there is very little chance of the parts breaking.


    This low maintenance cost is a big pro for commercial businesses as they do not have to worry about spending big money on maintaining solar panels. Keeping the solar panels clean and free of debris is the only maintenance they need to do.


    An added benefit of solar panels is the coverage and protection they provide to your roof from the damaging rays of the Arizona sunshine!


    Also, as electricity and other utility bills keep on rising due to inflation, users of commercial solar panels are not affected as they produce their own electricity. This is an excellent way to hedge against the volatility of electricity prices and inflation, which makes budgeting and future planning significantly easier, too.


    Even with the initial outlay of purchasing the commercial solar panel system outright, or financing it over time, businesses often see a positive return on their investment within only 3 to 5 years!


    Not only will you benefit from lower electricity bills and more controlled energy costs, but you can also take advantage of excellent tax credits and incentives that make going solar even more attractive.


  • Solar Tax Credits – With the Federal Investment Tax Credit, commercial businesses can claim 30% of the investment against their annual taxable income. Only commercial businesses with newly installed solar panels are eligible for this, which greatly reduces the installation cost of commercial solar panels.


    Commercial businesses can also deduct their solar panels’ depreciation expenses from their taxes for five years by using a Modified-Accelerated Cost-Recovery System (MACRS). The good news is, MACRS can be combined with ITC. As the ITC percentage will eventually be reduced, the MACRS percentage will increase helping businesses to write off more from their solar panel cost


    Commercial businesses can also claim State Investment Tax Credit for their newly installed solar panel system. This ITC percentage is given by the states, and thus, is dependent on the location of the business.


    And lastly, there’s an additional 10% tax credit available if US-made solar panels are purchased. Ideally, we keep our money within our own economy anyway, and this is a great incentive to do just that.

Cons of Installing Solar Panels on your Commercial Building

  • Upfront Cost – Commercial solar panels may save a lot of money in the long run, but they do not come at a small price. The upfront cost of commercial solar panels is high, which is one reason why commercial businesses are unsure about installing solar panels.


    Particularly businesses with smaller budgets may not want to spend a big chunk on commercial solar panel installation and would rather use the money for something else.

    BUT, it should be known that commercial solar panels often pay themselves off within the first 3 to 5 years, and financing is an option to reduce upfront costs!


  • Weather Unpredictability – Solar energy is entirely dependent on sunlight. But sunlight is different in various areas. As more sunlight equals more energy, businesses located in snowy or cloudy areas will produce a comparatively low amount of energy than businesses located in sunny areas.


    o get more energy, commercial businesses from areas with low sunlight might need to install more panels, which will cost them more money.

    BUT, the good news for Arizona businesses is that we have plenty of sunshine, more sun than nearly anywhere else! Commercial solar installation in Phoenix and cities throughout Arizona is often cheaper than other places as less panels are needed because of the abundance of sun here.


  • Building Upgrades – Sometimes, to install solar panels, commercial buildings might need some upgrades. Particularly the rooftop or the electrical system might need to be upgraded or even replaced before installing solar panels.


    The upgrade or replacement of the rooftop or the electrical system can result in higher upfront costs. This is another reason why some businesses choose not to install commercial solar panels.
  • It’s Good for Business!

    Also, as more and more businesses are trying to meet sustainability targets, solar panels are one of the easiest ways to do that.

    Plus, customers also like businesses that are eco-friendly and concerned about the environment. Solar panels produce green energy that can influence more customers to choose your commercial business over other competitors.

    Nonetheless, solar panels are free from creating any pollution. So, employees can work freely in a great work environment. Surveys have shown that employee retention is stronger with businesses that show they care about our environment through the use of solar panels and other green initiatives.

solar panel carport for apartment commercial business

Like all things that have their pros and cons, solar energy also has its beneficial points and negative reasons. However, as you can see, even some of the top cons above aren’t really that big of a deal, especially for businesses in Arizona.

Ultimately, business owners should weigh the pros and cons for themselves to decide if commercial solar panel installation is a smart investment for their company. 

Watt Masters is here to help! With over 50,000 solar panel installs throughout Arizona, we have extensive experience and wisdom to share that can greatly help you with your commercial solar decision. We look forward to meeting you!

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