The commercial-scale solar market could be as large as 129GW in 2018. This is according to a report from investment bank Morgan Stanley. This is assuming that the investment tax credit (ITC) goes to 0% and utilities nationwide implement fixed charges on solar customers.
It is no surprise then that the energy storage sector is targeting commercial customers. We discuss this in our article, Energy Storage Sector Targets Commercial Customers.
Commercial solar, which includes flat-roof installations, is proving to be a lucrative market for installers and businesses. Many companies operate with large facilities, with largely unused roofs. This makes them a prime location for the installation of solar panels.
This can provide many benefits to the company and the environment. An “unproductive” roof can be used more effectively by a company to generate electricity which can account for a large portion of the company's energy needs. By doing this, the firm can reduce its power bills as well as improve its reputation as a sustainable and green organization.
Commercial building mount applications, smaller than 100 kilowatts, are expected to grow by 40% year over year, according to NPD Solarbuzz findings. Further, large-scale commercial projects are expected to jump by almost 70% during the same period. These projections are double and triple, respectively, the growth rate of ground-mounted systems, which have conventionally been the biggest segment in the industry.
The shift is occurring because state incentive policies are more supportive of distributed generation and installers are finding it is easier to find potential customers for these systems rather than the larger centralized installations that ground-mounted systems tend to encompass.
Financial backing on the up
The growth of financial schemes is bringing more projects online too. In the past, organizations have struggled to find the funding for a system. This is because investors and banking institutions were not too keen on investing in solar as it was deemed to be too “risky”. This is now no longer the case.
Solar Power World online reported that the case is building for the commercial sector. Figures from the Energy Information Administration indicate that commercial and industrial property accounts for over 50% electric consumption in the US. This makes the potential for installations of this nature quite high.
In the US, the Property Assessed Clean Energy program can be used to assess the value of a facility and enhance its equity through solar power. It can then improve the credit of a PPA agreement and make it a more attractive investment for investors.
Investment in solar becoming mainstream
Value enhancing programs such as the Property Assessed Clean Energy program, the full value of solar as an investment is being realized.
Recently, financial services company, John Hancock, joined the many companies that are wanting to invest in solar energy. The company is partnering with the Libra Group to provide US$40 million in equity funding to a portfolio of solar installations throughout the US.
There are a number of commercial systems that will be the beneficiary of these investments in states with strong markets for solar power. These include Delaware, Massachusetts, New York and Vermont.
With financial funding and programs supporting solar development, the future of commercial solar looks very bright.