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What is the Difference Between Commercial and Industrial Solar?

By February 27, 2023Blog, News
Looking across the roof of a commercial building with solar panels and trees and brown hills in the background.

With all the buzz about solar power, you may want to learn more about it and its benefits for businesses. Solar power is a great alternative to grid electricity. It is a renewable energy and is available in abundance without severe impacts on the environment.

With solar power, companies do not have to worry about contributing to carbon emissions or global warming. Solar power is the solution for all sorts of operations, big and small. Therefore, as a business owner, switching to solar power will both save you money and protect the environment.

Before the solar installation process, one of the important things to learn is the difference between commercial and industrial solar. There are some key differences between commercial and industrial solar systems. It is essential to learn about both before contacting a solar provider to install them.

What is Solar Power?

Closeup view of the squares on a blue polycrystalline commercial solar panel against a blue sky with a few clouds.

Solar power is generated using the energy from the sun. The sun’s radiation is converted into electrical energy and can be used for all sorts of commercial businesses and industries. The solar system consists of photovoltaic panels that convert solar energy.

Sunlight has photons, and these photons are energy packets that come into contact with solar panels to generate electricity. The panels are made of silicon and are semiconductors meaning that they can create an electrical field using the negative and positive layers, boron and phosphorus, respectively.

When the sunlight with photons meets the plate, they release free electrons that produce electricity. The AC current generated is then converted into DC current with the help of an inverter.

Commercial Solar Systems

Aerial view of rows of solar panels on the roof of an industrial plant with smaller buildings and cars parked around it.

Commercial solar systems are used for commercial businesses. These businesses need high-power energy to run their machinery, shops, and more. Commercial solar energy systems are utilized by many types of buildings, including schools, offices, and even retail stores.

Commercial solar systems can be all sizes. For instance, if you own a small shop and need energy, you can get a smaller solar panel system. However, commercial solar installations can also be implemented at a larger scale for malls and even healthcare organizations.

There are several benefits for commercial businesses that want to switch to commercial solar systems, including:

Financing Possibilities

Many solar providers look keenly at commercial owners and offer convenient financing possibilities that will help businesses to benefit from solar power as quickly as possible. There are multiple financing options, such as:

  • Solar Lease: This is called the solar rent and here you have to pay a fixed fee monthly for using the solar panels leased by a solar provider.
  • Solar Loan: The solar loan is when you have to get a loan to be able to pay for the solar panels, and you get a time frame to pay the money back.
  • Power Purchase Agreement: The Power Purchase Agreement requires you to pay a certain price for every kilowatt-hour (kWh) for any electricity the solar panels generate.

If you opt for a solar lease or power purchase agreement, they will not qualify for any tax credit, but solar loans do. If you want to get the best return on your investment, then you should consider investing in solar loans.

Green Credentials

Consumers today are very environmentally conscious, and they want to invest their time and money in a company that is good for the environment. Many customers expect commercial businesses to play their role in protecting the environment, and by installing solar panels, you will be able to exceed that expectation. Installing solar panels will help you get green credits, and more and more customers will prefer your business over your competitors that are not invested in solar systems.

MACRS Depreciation  

A modified accelerated cost recovery system is a concept that helps businesses benefit from a reduction in their tax obligations during the first five years.

The MACRS and solar tax credit can be combined, and half of its credit value can be taken away from the cost base of the entire project. That would bring down the cost basis down significantly to 85% if you were to go for a 30% tax credit application.

Quick Payback

Tax reductions and saving money on utility bills direct you to easily pay back the investment, and you will be able to use the solar panels for the a large length of time. The average life of a solar panel is between 20 and 30 years.

Tax Credits

Tax credits are one of the most lucrative factors in installing solar systems for your commercial business. The Solar Tax Credit ‘Clean Energy Credit’ will subsidize 30% of your solar panel system installation.

Utility Bills  

When running a commercial business, business owners will try to cut down costs as much possible to ensure profitability. Solar power is great to help you save up money and use it for other things that can help your business significantly.

Moreover, you will not have to worry about any increases in power costs. Electrical power is subject to increase and decrease, but with solar power, you don’t have to worry about the sun raising its fee! A solar system is a one-time investment and the kind of gift that keeps on giving.

Industrial Solar Systems

Rows of solar panels on the roof of an industrial plant with industrial smokestacks in the background.

Industrial solar systems are large solar plants that cover a lot of space and generate a lot of electricity. They are designed for factories, warehouses, and large corporations.

As an industry leader, these types of businesses may contribute greatly to climate change because of greenhouse gas emissions. Therefore, it is very important for the industrial sector to realize its impact on the environment and take the right steps to decrease emissions.

Solar power is not just good for the environment, but it is also a very good business. Here are all the benefits companies may experience with an industrial solar system:

Self Sufficiency

One of the biggest problems for large companies is the dependence on grid electricity for power. There are many reasons why grid electricity is not the most preferable option. These types of companies need a lot of electricity, and grid power is subject to many factors. For instance, if there is any economic instability in the country, then that may affect prices for grid electricity.

In this case, it can become very difficult to adjust to changing energy costs. The best way out is to have an energy source that is independent of grid electricity. If your business has a lot of space, you can use it effectively to generate the electricity for operations.

Overhead Costs  

Overhead costs can be a great setback for businesses. If you want to reduce your overhead costs, investing in solar power will benefit you. Electricity bills can be very draining, and it is best to avoid these overhead costs as best as they can. Once your company starts producing its own power, you will not have to worry about any extra costs.


When you have money to spare and an abundance of solar power, you can start thinking about expansion. Industrial solar systems are a great way for you to ensure that you are covered when it comes to electricity and you can focus your attention elsewhere. Therefore, by installing solar panels, the chances of expanding and taking your business to the next level greatly increase.

Uninterrupted Production

Large companies suffer greatly when it comes to grid electricity. A power outage can mean a loss of time and money. As one of these larger businesses, you need to ensure that your production continues, regardless of power outages. With solar power, you will have the resources to not just keep your production levels up, but also maintain them consistently.

Contact Coldwell Solar For Your Commercial And Industrial Solar Needs

Are you looking for the best company to cater to your commercial and industrial solar needs? Contact us today to get started on your next commercial or industrial solar project!


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