Constantly increasing electricity prices and continuous decline in the cost of solar photovoltaic systems have popularized the solar system as an affordable energy option for businesses.
High-quality solar systems offset your overall electricity consumption. Installing solar systems demands a large up-front capital cost with a backup period of typically 5-10 years.
Stand-Alone Vs. Grid-Connected Solar PV Systems
Stand-alone PV systems are mostly used in remote areas where electricity demand and grid connectivity is low. These systems require batteries to back up the energy for supply at night and during cloudy days.
On the other hand, grid-connected solar PV systems use inverters totransform generated DC (direct current) into AC (alternating current), which is very compatible with ordinary business needs.
ROI/ Cost Analysis
The cost of single solar panel depends on many factors:
- Your location
- Number of panels required
- Type and quality of panel required
- Type and quality of inverter and battery required
- Cost of grid-connection process
- Site preparation needs
- Government rebates and support schemes
- Existing infrastructure upgrades required and more.
A high-quality solar panel comes with a higher price tag. It works more efficiently and produces more electricity using the same amount of sunlight as compared to poor quality hardware and also comes with a warranty.
If you have a trustworthy relationship with a distributor and want to buy panels in bulk for your commercial building, you can enjoy much lower rate as compared to an average buyer.
Don’t forget the cost of workforce required to install the system, installer’s fee, and filing permits. If you are a solar technologist and planning to theDIY solar system in your small commercial building, it would make ahuge difference to the total cost.
Every panel has its capacity, and the cost varies accordingly.
Consider the Following Cost Analysis for Solar System:
Average Per-watt cost of single panel: $ 0.75
Average Output of Single panel: 250 Watt
Total cost of one solar panel: $ 187.50
Let suppose; you want to install 250 panels. Then it would cost you: $ 46875
Typically, the cost of solar panels ranged between $ 0.85/watt to $ 1.25/watt for the panel capacity that ranges from 150 watts to 350 watts. Check the solar panel pricing in U.S. states here.
Components
There are four components in every solar panel system:
- Solar Panels: Captures sun’s energy and converts it to electricity. You can order photovoltaic cells online and assembles them yourself. If you lack time and skills, there are lots of brands offering first-rate solar panels well-suited for small commercial businesses.
- Batteries: Store the power generated by thesolar system for later use.
- Controller: Regulate the electricity flow and ensure that the backup batteries are not overcharged or discharge through the system.
- Inverter: It converts the solar energy to thevoltage required to run your home appliances.
Payback Time
Let’s understand it by following cost analysis:
Average Size of Solar system in the USA: 5 KW
Price per watt: $3.36
Total cost per solar system: $16,800
Deduct solar tax credit (30% of total cost): $11, 760
Assuming that you have agood relationship with the distributor, you skip auxiliary equipment; the cost of thesingle panel can be reduced by $1 per watt. It means a 5 KW system would cost around $10,000 with a payback period of 10 years excluding subsidies, which seems a great deal.
State government offers tax incentives and rebates that can reduce your overall solar system costs. You can calculate the state solar incentives and rebates policies yourself.
Cost can be reduced by using thin film panels. But only a few companies like First Solar is selling thin film panels to commercial customers.
Design and Installation
The entire process involves the following eight steps:
Finding a Solar PV Retailer
Buy solar panels from an approved retailer. Though commercial and residential panels have no physical dissimilarity, commercial installation demands more installations, batteries, and inverter requirements. An approved retailer help you choose the right solar panels for your premises.
Design and Feasibility
Plan your budget, how much electricity you expect from your solar system, and the physical properties of commercial premises.
Product Selection
When choosing the components, ask yourself following questions:
- Does the product meet quality standards?
- Check the warranties and guarantees that come with the products.
Don’t forget cost comparison.
Quotation and Agreement
Request a detailed quotation that must include the following:
- Specifications, size, quality, output and price of components.
- Warranties and guarantees.
- Service agreement.
Apply for Permits
Contact local planning authority to determine planning and building permit needed before installing the solar system in your small commercial building.
Connecting the Grid
You could DIY solar installation in your small commercial building. Or, you could hire a normal contractor or pay an installerwho’ll do the majority of the work. Remember, hiring a contractor or certified installer will increase the cost of solar system installation, thus increasing your payback time. Go for DIY solar system installation, if you are experienced and trained to do this.
Apply for Government Rebate
Government rebates include grants and RECs that hugely affects your entire cost structure. Contact the relevant entity to apply for government rebates.
Whether you’re in aremote location, or have your commercial building in uptown, whether you hire an installer or DIY solar panel installation, solar systems are always the best option to cut down the cost of your electricity consumption.
About Author
Adam Hammill – President/CEO of ALIVE SOLAR After 11 years researching alternative energy, he discovered a way of combining existing technologies to create a clean, chemical energy storage system at least twice as efficient as systems currently available. Beginning in 2008, he devoted himself full-time to renewable energy generation and energy storage development. Adam’s ideas, experience, and relationships have quickly caused Alive Solar to thrive in the alternative energy arena in Southern California. He earned a Bachelor of Science degree at the University of Southern California and a Master of Theology degree from the University of Aberdeen in Scotland.
