Solar for Commercial Buildings: What are Your Options?

  • July 16, 2019

Has your business decided to transition to solar for renewable energy? Are you wondering what options are available to you now that you’re interested in making the switch? Do you know any companies that can help you with financing if you don’t want to purchase a solar system outright? Transitioning can seem like a daunting task at the onset, but there are plenty of options available to you when you want to add solar panels to your commercial building. You are probably wondering if the investment is worth it. Let’s take a look at a few statistics from EnergySage. According to their marketplace data, commercial property owners pay around $1,950 in monthly electricity bills before transitioning to solar. After commercial businesses went solar, their bill was reduced by 75%, which results in about a $500 reduction. What is great about solar nowadays is that the price of buying and installing solar panels has decreased. This has allowed more businesses to go green and adopt a solar system at a more attractive price. Before we discuss the financing options that are available, let’s explore the different system sizes for solar for commercial buildings.

System Sizes for Commercial Buildings

It is important to note that when you are looking for the right system, you have to make sure you get the right size. It’s pretty simple–all you need to know is how much electricity your business needs to operate. Once you have that number you can measure it using watts and you will know how large of a system you should install. For reference, an average homeowner will install a 6-kilowatt system. Here is a breakdown of the different sizes you can choose from:

  • 25 kW
  • 50kW
  • 100kW
  • 250kW

Each size is priced differently and the more kW you would like, the more expensive the system. Also, most businesses tend to pay off their solar system within 5-7 years, so the ROI may be worth it. Not only do you improve the environment, but you can also enjoy federal tax incentives, customer support, new business from people who are looking to support companies that are working towards a greener future, and performance-based incentives.

Solar for Commercial Buildings Financing Options

Paying upfront for a system, agreeing to a solar PPA, or taking advantage of an operating lease is among the most popular financing options. There are a total of five financing opportunities that you can choose from, but in this article, we will discuss the three most popular options. For more information about the other two options, check out our article that goes into more detail about how solar financing works.


For organizations interested in owning a solar system, a cash option has the highest ROI. Your business owns the system, which is not the case when you want to lease or take advantage of a solar PPA. You are also able to directly benefit from the federal tax credits. If you lease through a third-party, the third-party reaps the benefits of the tax credits. Additionally, you choose who maintains and operates your system and you are not locked into any long term contracts.

Solar PPA

A solar PPA is an arrangement where a developer plans the design, permitting, financing, and installation of a solar energy system on a customer’s property at little to no cost. You can expect to be locked into a contract for 10 to 25 years. The developer is responsible for maintaining and operating your solar system as well as collecting federal tax incentives. Once your term has ended you can choose to buy the system from the developer or extend your terms, With a solar PPA, you will have no upfront costs.

Operating Lease

An operating lease is perfect for those who cannot pay upfront costs and they don’t mind someone else owning the system. With an operating lease, the developer owns the system while the customer pays monthly fees. The customer will enjoy the benefits of the Solar Renewable Energy Certificate incentives while the developer enjoys the tax incentives. The terms for this financing option are typically shorter with 7- to 10-year contracts.

What is the Best Option for You?

Now that you know a little more about solar for commercial buildings, it is up to you to make the switch. With the help of solar financing specialists at AVANA Capital, you should be happy to know that they will work with you to understand exactly what your business needs in order to support your operations. Their commitment to renewable energy has allowed them to become one of the most competitive solar financers on the market. For more information about how they can help you today, contact AVANA Capital and one of their solar specialists will be with you shortly.