The positive impact of solar energy on commercial properties continues to expand. A growing number of landlords and property owners have been installing solar energy systems on rooftops, open land, and canopy-style carports at commercial properties of all kinds. These investments reduce operating costs, promote sustainability, and boost returns on investment.
The non-residential segment of the photovoltaic (PV) Solar market registered its largest quarter ever at the close of 2017, according to the Solar Energy Industry Association. The 2,147,000 kilowatts of power installed by the sector in 2017 represented a 28-percent increase over 2016’s figure. As technology costs have fallen and efficiencies have increased, providing more energy output per square foot, solar has become one of the primary sources of new electrical capacity installed across the United States.
Beyond asset-by-asset investment in solar, commercial real estate owners in a growing number of states can realize even greater savings and efficiency by participating in an increasingly popular program—community solar.
THE COMMUNITY SOLAR CONCEPT
Individual (privately-owned) PV system installations sometimes limit the realizable benefits from solar based upon the site’s current energy usage. However, under a community solar approach, if your commercial property can host more solar-based electricity than your property requires, the additional energy produced can be sold for the benefit of the surrounding community.
As the solar host, you’re creating a benefit from clean, renewable energy with a fresh source of revenue, while putting otherwise unused or underutilized space at your commercial property to a productive use. It’s a classic case of smart asset management.
Community solar also delivers community relations benefits by serving as a quiet, clean source of sustainable energy for the local area. Landlords benefit from lower cost energy while positively contributing to the local community by extending the opportunity for lower cost energy to nearby energy users, who become subscribers to the solar energy output. The number of subscribers who can be served varies based on the size of the system and from state to state based upon community solar qualification guidance. As host, you don’t need to be a participating subscriber although most hosts choose to subscribe to capture the benefit of lower electricity pricing.
Not every commercial property has enough suitable space to generate power to spare. The best locations for solar programs have flat or gently sloped rooftops with at least 50,000 square feet of unobstructed space. Four acres or more of unused land is ideal for ground-mounted solar farms. Land with no road frontage, former quarry sites, brownfields, and landfills can be excellent candidates for solar development. Asphalt lots can accommodate canopy-type solar arrays, with the added benefit of protecting parked vehicles from the weather.
THE INSTALLATION PROCESS
Because the size of an installation can range anywhere from 2,000 to 20,000 panels, commercial property owners often ask whether the construction process will cause a disruption to their property. Rooftop installation—which is less disruptive than the carport alternative—is usually completed over the course of four to 14 weeks, depending on the system size.
As far as structural issues or hazards, it’s good to know that solar installation technology has advanced significantly in recent years. Roof penetrations are rare and avoided if possible. The current anticipated life span of a solar array is as long as 40 years, so it is important that rooftops under consideration are in good condition, with at least 20 years before planned replacement. Many roofing warranties now have provisions for accommodating solar installations.
Upon completion, rooftops maintain their fire rating and their access to equipment for maintenance and emergency. Interconnections are often made completely separate from existing electrical infrastructure. Also, today’s technology advances have made it possible to greatly reduce risks of uplift or sliding.
The addition of solar canopies to paved parking lots provides weather protection for parked vehicles. The systems can include under-canopy lighting, gutters, and other measures, such as EV charging, desired by the host. Site requirements, including ground clearance requirements, are taken into account.
Ground-mounted systems benefit from relatively flat open space and pose no environmental impact to the property. Sites can be restored to their original condition after the system is removed at the end of its useful life.
COMMUNITY SOLAR INCOME: BY THE NUMBERS
Let’s look at a hypothetical candidate for community solar: a commercial building with a 100,000-square-foot roof. A solar rooftop installation on the roof has the potential to generate in the range of 1.2 million kilowatt-hours of power annually. Depending on the state, and on the availability of various credits and incentives, such an array could generate financial benefit to the property owner of up to $50,000 annually for what is otherwise unrentable commercial space.
In addition to the revenues earned by serving as the host of a community solar project, the property owner can realize additional savings in energy costs by participating as a subscriber to the energy output of the project.
Thanks to the progressive regulatory policies, falling equipment costs, and advancing technology, community solar can offer exciting and financially attractive opportunities for commercial property owners while building a more sustainable world.
Gavin Nagle is a senior engineer with Con Edison Clean Energy Businesses. Stephen Ondishin is a solar sales developer with Con Edison Clean Energy Businesses.