The Challenges to Commercial Solar Energy Deployment

February 26, 2021

Solar energy has many benefits for non-profits, businesses, and schools. It can boost cash flow and increase the enterprise’s operating income, amongst other benefits. But as a form of renewable energy, it has several obstacles, especially for commercial establishments. Here are some of the challenges and how stakeholders are addressing them.

The Broad Scale of the Non-Residential Solar Market

There is a wide range of project sizes and models under the non-residential solar market. They range from customers that include non-profits and schools, as well as small businesses and large brands. In states like New York, industrial and commercial establishments represent 84% of the installations. In other states like Arizona, the majority of PV (photovoltaic) deployments were solar energy install for schools and non-profit organizations.

Challenges of Solar Energy for Commercial Enterprises

In recent years, lenders have been warming up with the idea of financing solar for businesses. Entrepreneurs can come up with financial structures that can demonstrate the benefits against the cost, thanks to net metering and tax incentives that can support projects such as a solar energy install for schools.

Mismatch Challenges Between Businesses and Landlords

Another challenge is a mismatch in the contract between the building lease and the terms for solar panel installations. Offices and warehouses can develop power purchase agreements, including multiple tenants to reduce transaction costs.

Solar energy installation for schools has great potential due to the land availability and capacity to develop the technology. However, the biggest obstacle is educating management on the benefits of PV electricity.

The Value of Smart and Net Metering

Regulations require smart metering to connect the system to the power grid. It is a way for organizations to recoup the monthly electricity bill.

A solar energy install for schools may generate more energy than it can consume, depending on the season. Net metering enables these establishments to receive a credit for every kilowatt-hour it sends to the grid. The net metering system has made solar energy more viable by addressing overconsumption by electrical power consumers.

The Growth of Commercial Solar Energy

Since the beginning of 2014, the price of solar panels has dropped by 50%. At the same time, research and development have led to growth in solar panel efficiency. In the next decade, it is expected that investment in photovoltaic cells will continue to grow, leading to better efficiency.

There will be challenges for any project that involves a solar energy install for schools or businesses. Financing and accessibility have been a challenge for most businesses, but new models for managing transactions and the falling price of photovoltaic panels indicate positive growth in the future.