Commercial and industrial (C&I) solar is becoming increasingly more accessible across the United States, as businesses and organizations look for ways to save on rising energy costs and improve their environmental sustainability efforts. Compared to residential solar, there is much more to consider with C&I solar, such as varying energy demands, regulatory frameworks, and financing options available for higher-cost, commercial-scale solar installations. In this article, we will answer some of the most common questions about C&I solar to shed light on some of these complexities. Whether you are a business owner, a facility manager, or simply curious about C&I solar power, this article will provide you with the essential information you need to know about this rapidly evolving market.
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What is C&I solar?
C&I solar stands for commercial and industrial solar. It refers to the use of solar energy systems to power commercial and industrial facilities, such as shopping centers, office buildings, and industrial complexes. C&I solar is a rapidly growing sector of the solar industry, as businesses and organizations seek to reduce their carbon footprint and energy costs. In addition to providing energy savings, it can also improve a company’s sustainability profile and contribute to achieving sustainability goals. Installations can be customized to meet the specific energy needs of a facility and may incorporate energy storage systems to increase energy independence and resilience.
Pismo Coast Plaza shopping center features a C&I solar installation.
What are the benefits of C&I solar?
There are numerous advantages to installing solar panels in commercial and industrial settings, referred to as C&I solar. One of the main benefits is the cost savings on energy bills. By generating their own power, C&I facilities can reduce their dependence on the grid, leading to lower utility expenses, particularly in areas where grid power costs fluctuate.
Moreover, C&I solar contributes to lower carbon emissions and offers various environmental benefits. Solar energy serves as a clean, renewable power source that generates electricity without emissions. Additionally, C&I solar alleviates pressure on the power grid. Expanding the number of locations where energy is produced in closer proximity to where it is consumed is vital, and C&I solar enables just that.
Also, many properties can lease their rooftops for C&I solar purposes, thereby increasing their rental income. As consumers become more eco-conscious, they prefer shopping at commercial establishments that adopt clean energy strategies, positively affecting tenant occupancy rates and ultimately boosting rental income. For multi-tenant C&I properties like neighborhood shopping centers, malls, and industrial manufacturing complexes, enhancing rental income can significantly raise property value, providing multiple advantages to property owners.
Can a C&I solar installation provide enough energy to power a facility?
A C&I solar installation can power a facility, contingent on the size of the facility, available roof space for solar installations, and the energy demands of the facility. A location with lower energy consumption may rely solely on a solar installation, while larger facilities with higher energy requirements may need to supplement solar energy with other power sources. Another critical factor is the roof size in comparison to the usable space within the property. Single-story buildings typically have a more favorable roof-to-tenant square footage ratio, enhancing the likelihood of supporting their energy needs with rooftop solar. Conversely, multi-story buildings like office blocks may rely more on carport solar installations or other energy sources to fulfill their energy demands.
It’s also essential to acknowledge that solar energy is most efficient during daylight hours and may not suffice during low sunlight periods or at night. However, a well-designed solar installation can significantly cover a facility’s energy needs, minimizing grid dependence and reducing energy costs. With the integration of battery storage systems, excess solar energy generated during peak hours can be stored for use during low sunlight periods or nighttime. Consulting solar experts to evaluate energy needs and design an optimized solar solution for a specific facility is highly recommended, as factors like the facility's location can influence available options.
Can a C&I solar installation be used in conjunction with other energy sources?
Yes, a C&I solar installation can work alongside other energy sources such as grid-tied systems for a more reliable power supply. Grid-tied systems can send excess solar power back to the grid while drawing power during low sunlight hours or at night. This setup allows for a steady power supply while gaining the cost savings and environmental perks of solar energy.
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Alternatively, solar can be combined with battery storage systems to retain excess solar energy for use during low sunlight and nighttime. This approach increases the reliability of the solar installation and further reduces reliance on the grid.
In some instances, solar energy may also be paired with other renewable sources like wind or hydropower, creating a diversified energy portfolio that enhances energy security. The integration of renewable sources will depend on the unique needs and location of each facility.
How much does a C&I solar installation cost?
The expense of a C&I solar installation can fluctuate based on a variety of factors, including the installation's size, location, type of solar panels and inverters employed, and project complexity. According to the National Renewable Energy Laboratory (NREL), the average cost of a commercial solar installation is between $1.8/W and $2.9/W, with prices slightly increasing in recent years. This translates to an approximate cost of $180,000 to $300,000 for a 100 kW solar installation on a roof. Numerous financial incentives and tax credits for C&I solar installations can help alleviate costs. For example, the Inflation Reduction Act (IRA) offers valuable tax incentives which differ by jurisdiction, making the location of a C&I property an essential factor in determining solar program costs.
Securing a C&I solar loan presents more challenges than in the residential sector. To help address this, programs like those offered by King Energy allow property owners to benefit from a C&I solar installation with no upfront costs, hence requiring no loan. In these arrangements, rooftops are rented to accommodate solar installations, enabling facilities to reap the benefits of solar without financial burdens.
How long does it take to pay off a C&I solar installation?
The time needed to repay a C&I solar installation through energy savings—referred to as the payback period—can vary based on installation size, electricity costs, and availability of financial incentives. Typically, the payback period for a commercial solar installation ranges from 5 to 7 years, which is reasonable given a system lifespan of over 25 years. This timeframe can be shorter or longer based on project specifics, capacity, energy generation potential, and the financial incentives in place, such as those afforded by the IRA allowing businesses to deduct 30% of installation costs from federal taxes, effectively shortening the payback period.
What are the maintenance requirements for a C&I solar installation?
Though routine maintenance is essential for achieving peak energy output, C&I solar systems are relatively self-sufficient after installation. Solar panels, lacking moving parts, typically need little other than occasional cleaning. Most C&I systems are equipped with monitoring technologies to assess performance and notify maintenance crews of arising issues.
Continue the conversation
If you have additional questions not covered here, please don’t hesitate to reach out to us for a discussion with one of our specialists, who will be happy to provide answers.
The C&I Custom Program incentivizes tailored energy efficiency and distributed generation projects that require site-specific engineering analyses or projects with energy conservation measures not covered by the C&I Prescriptive Program. Funding levels range from a minimum of $10,000 to a maximum of $1 million per customer, with additional restrictions applying. For more information, refer to the C&I Custom Program’s project descriptions below and check out our program overview video.
Customers who have participated in the C&I Custom Program include hospitals, manufacturers, universities, commercial bakeries, food processors, office complexes, and data centers. To learn more about past custom projects, click here.
Efficiency Maine’s C&I Custom Program is accepting applications for custom efficiency projects that reduce consumption of grid-supplied electricity, natural gas, oil, and other fuels. Learn more here.
Efficiency Maine’s C&I Custom Program also welcomes applications for cost-effective behind-the-meter distributed generation projects like combined heat and power (CHP). Learn more here.
Applications are currently open for behind-the-meter energy storage projects that can help reduce facility demand during summer peak hours. Learn more here.
Additionally, the C&I Custom Program accepts applications for beneficial electrification and heat recovery projects at manufacturing facilities. Learn more here.
The Lead by Example Initiative provides funding for state agency-owned or leased buildings that currently utilize oil or propane heating to convert to high-efficiency heat pumps. Learn more here.
Efficiency Maine offers complimentary scoping audits to eligible businesses with the potential for qualifying projects under the C&I Custom Program. These audits give businesses the chance to receive professional consultations regarding specific energy use and identify cost-efficient energy efficiency projects that can reduce operating expenses. Click here to determine if you qualify for a scoping audit.
Moreover, Efficiency Maine offers incentives for Technical Assistance Studies to customers who have already pinpointed a project but need external assistance to advance it. Learn more here.
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