Comparing Residential vs. Commercial Solar Installations in Chicago
Between 2010 and 2024, the cost of installing solar systems decreased by more than 40%, enabling the industry to expand into new markets and install thousands of systems across the country.
- What are the common features of residential and commercial panels?
- What are the distinctions between residential and commercial solar panels?
- Are commercial solar panels worth the investment?
Installation Process Differences
There are two main differences in the installation process of commercial vs. residential solar panels in Chicago. Commercial panels require a space that can support their weight, usually placed on large roofs or as ground arrays. They use sophisticated ballast or racking systems, depending on the roof structure and available space.
In contrast, residential vs. commercial panels are adapted to the limited space available on residential roofs and are designed to blend in with the aesthetics of the property.
Key differences between residential and commercial solar installations:
- Residential systems are more compact and less complex.
- Residential panels are usually located on roofs.
- Residential panels are designed to match the appearance of the house.
- Installation time for residential panels is typically shorter than for commercial systems.
Looking to buy a solar system in Chicago? Get your free solar quote in a matter of minutes!
Cost Comparison
Another key difference between residential and commercial solar projects is the cost – the price of a large one will be higher. When repairing a local transformer in a commercial operation, you need to pay from $4,000 to $20,000 or more, depending on technical factors. Updating an electrical panel in a residential building will cost you about $2,000.
Nevertheless, the cost per watt in commercial projects is frequently lower due to economies of scale in commercial solar energy systems.
Additional savings can be made by purchasing equipment components in bulk.
Therefore, for contractors ready to cope with the complexities of solar projects, this sector will be very profitable.
Initial Investment and Return on Investment
Commercial solar energy systems benefit from lower costs per watt due to economies of scale and bulk purchasing, which leads to a higher return on investment.
Is residential solar a good investment?
Yes. Residential solar panels typically pay for themselves within 6 – 10 years. This is a relatively quick return on investment.
In contrast, commercial solar systems can have a payback period of 5 to 13 years, with an average ROI of 10% to 20%. This makes commercial solar systems an attractive choice for businesses looking for significant long-term financial benefits.
Long-Term Savings and Benefits
A powerful motivator for commercial and residential solar users is the prospect of long-term savings.
Benefits of commercial solar power panels:
- Reduction of current energy costs
- Increase in the value of commercial property
- More than 10% average return on investment, which is higher than many traditional investment options
The financial benefit after the initial payback period is over will be reaped by the property owners. The prospect of lower energy bills over the life of their solar panels provides significant long-term savings.
Energy Output and Efficiency
The efficiency of any solar solution depends on its technology. A key factor in choosing the best option for commercial and residential applications is that panels with high efficiency convert more sunlight into electricity.
Technological differences, such as the size and location of solar cells, directly affect their efficiency. These factors are important in determining the number of panels needed to meet specific energy needs.
Research on solar system components reveals the complexity of commercial installations. These projects require a deep understanding of electrical systems and the use of specialized, high-quality equipment. The complexities of commercial solar projects, such as transformer upgrades and local line capacity assessments, require expert knowledge.
Commercial solar installations also depend on robust mounts or mounting systems to securely attach to rooftops. These technical aspects require more expertise and complex planning than residential systems.
Modern photovoltaic solar panels maintain 80% efficiency for at least 25 years. This is evidence of their durability. Warranties of 25 to 30 years provide peace of mind and long-term energy cost savings.
Looking to buy a solar system in Chicago? Get your free solar quote in a matter of minutes!
System Size and Design
What is commercial solar panel size? Commercial solar panels are usually larger than residential ones. The latter consists of 72 cells and measures 65 by 39 inches. A commercial system consists of 96 cells and measures 78 by 39 inches.
Homeowners can also choose commercial size solar panels if they are suitable for them. Given that commercial solar panels produce more energy and are more efficient, it is worth considering them for your home.
Site assessment and design is an important part of the solar installation process. For commercial projects, it includes a comprehensive analysis:
- Grid connection planning
- Shading analysis and other studies
A technician plays a key role in ensuring that the measurements are accurate and the installation plans are feasible.
Design drawings for commercial solar installations perform several important functions:
- Specify the placement of panels
- Provide a detailed construction plan
- Include permitting and construction drawings
- Make sure that the final design meets the aesthetic and technical requirements of the project
This level of detailed assessment is critical to a successful commercial solar installation.
Given the large scale and complexity of the process, the installation of commercial solar projects typically takes six months to a year. The construction phase takes 6 to 12 weeks, depending on the size of the installation.
Installation of panels on residential buildings is available within one day. This makes the transition to solar energy quick and efficient.
Commercial solar panel systems are usually white, while residential ones can be black or white. Often, residential customers choose black panels on a black base, while commercial customers prefer black panels on a white base. The color choice depends on your personal preference.
Activation of both commercial and residential solar systems is an important event that frequently involves simply switching on the system to start using solar energy. This final step marks the completion of the journey from planning to activation and is when the solar system begins to deliver its benefits.
Permitting and Regulations
Navigating permitting and regulatory requirements is an integral part of the solar panel installation process. For commercial vs. residential solar panels, engaging a highly qualified engineering firm or experienced in-house designer is critical to ensure technical competence and expedite the permitting process.
The inspection process for commercial installations can be complex, often involving multiple reviews and detailed planning to ensure accurate submissions.
After installation, an inspection by local authorities is required to confirm that the solar system meets local regulations. Commissioning guarantees the following:
- The system meets the expected performance.
- The system has permission to connect to the local grid.
Maintenance and Monitoring
Commercial solar panels, although designed for minimal maintenance, may require more complex maintenance due to their larger scale and complexity. We recommend regular cleaning and annual inspections. This will maintain the performance and integrity of the hardware.
Maintenance for residential solar panels is minimal. Their owners must be vigilant, cleaning and removing obstacles to maintain efficiency.
Being aware of the expected lifespan and the decline in efficiency over time is crucial to ensuring that residential solar panels meet the home’s energy needs.
Financial Incentives and Rebates
It is much easier to obtain financing for the residential market than commercial-grade solar panels. Financing options are much more developed in the residential solar sector, while the commercial sector is relatively new. Nevertheless, there are more and more opportunities to finance commercial projects; not everyone wants to pay cash.
Looking to buy a solar system in Chicago? Get your free solar quote in a matter of minutes!
FAQ
What are the main differences in the installation process for residential and commercial solar systems in Chicago?
Both residential and commercial solar systems are installed in the same way, using bolted racking systems that are safe and efficient.
Commercial solar systems are usually easier to install due to the availability of flat roofs on which the panels can be fixed with a ballast mounting system. The installation process takes about a month.
For residential systems, most installations are on pitched roofs, which requires through-posts to secure the system. They can be installed during the day.
How do the costs of residential and commercial solar installations compare in Chicago?
Price is a significant difference between residential and commercial solar systems. The cost of the panels is determined by the capacity, not the type of system.
Typically, commercial solar systems have higher upfront costs but lower cost per watt. Due to their size and storage capacity, commercial systems are likely to be more expensive per unit than residential systems. However, the cost per watt of electricity production is the same for residential and commercial panels.
What financial incentives are available for commercial solar installations in Chicago?
- The Investment Tax Credit (ITC) reduces federal income tax liability by a certain percentage of the cost of the installed solar system during the tax year. It applies to a variety of solar systems: residential and commercial (including small and medium-sized businesses). The system must have been installed no earlier than the end of 2006.
- Production tax credit (PTC) for electricity for sale for commercial and utility-scale solar projects. The PTC reduces federal income tax liability for each kilowatt-hour (kWh) of electricity generated by solar technology during the first 10 years of system operation. The incentive amount depends on the inflation rate and is reviewed annually.
- Modified Accelerated Cost Recovery System (MACRS) to depreciate the cost of a solar system over 5 years. It allows you to deduct a certain percentage of the system's cost from your taxable income each year;
- Bonus depreciation is an incentive for businesses. Allows them to write off a significant portion of the cost of new capital assets faster than under standard depreciation rules.
