Commercial Solar
Commercial solar is solar energy meant for businesses as opposed to its more conventional use in residences
What Is Commercial Solar?
Commercial solar may seem straightforward — solar for businesses as opposed to residential solar for homes. However, commercial solar encompasses a variety of different types of customers and projects. In addition to businesses of different sizes, from large corporations to local small businesses, “commercial” solar customers can also include governments, schools and universities, and even nonprofits.
Commercial solar projects may take the form of rooftop arrays on buildings or ground mounts, and can range widely in size from kilowatts to megawatts. According to Joe Naroditsky, Director, Solar & Operations at the Community Purchasing Alliance (CPA), an organization that connects nonprofits with solar bids, the C&I solar projects his organization facilitates can range in size from 50 kilowatts (kW) for small churches and synagogues to 300-400 kW for large schools.
Constraints on the Commercial Solar Market
As you begin to read up on the commercial solar sector, one of the common refrains you’ll see is that this market has not grown nearly as rapidly as residential or utility-scale solar. As noted in PV Magazine, “The commercial and industrial (C&I) solar markets have been a relative challenge for solar developers to exploit.”
Cost of Commercial Electricity vs Residential
There are a number of factors that have contributed to C&I lagging behind residential solar. For one, commercial electricity prices are historically lower, which can make the economics of solar a little trickier.
As Mark Berger explains in PV Magazine: “The C&I sector has trouble competing against an average 15% or more lower price per kilowatt-hour rate than residential electricity prices, according to the U.S. Energy Information Agency. ”
According to the U.S. Energy Information Administration, in February of 2021 the average cost of electricity for U.S. residential customers was 13.3 cents per kilowatt hour (kWh), while the cost for commercial customers was 11.9 cents per kWh.