If you look around, there’s clearly a growing demand for commercial solar. It’s not just for industrial warehouses and big box stores anymore. Everything from shopping centers to office buildings are getting in on the action, using onsite solar to lower tenant energy bills and increase property value and net operating income.
But, solar is a complex industry to navigate. There are plenty of funding options and even more solar providers. There are also significant, long-term financial benefits if you choose the right path for your building.
To get you started, here are some important questions to ask a solar company:
1. What kind of solar racking will you use?
Ask about how they plan to mount the panels. Flat roofs generally require a technique called ballasting, which involves weighing down the panels using concrete pavers.
2. How many penetrations will my roof require?
Clarify how many holes the solar company plans to make in your roof. They probably won’t know the actual number until they get onsite and do a full structural analysis, but they might have an estimate.
3. How difficult will it be to move panels after installation?
Check how easily the panels can be adjusted after the company installs them. Depending on age and condition, you may need to repair a portion of the roof or install a new vent or HVAC unit for a tenant. A good solar company will be able to shift panels around to accommodate requests.
4. Will you work with my original roofing company?
See if they’ll coordinate with your original roofer during the installation. Working with your original roofer keeps every relevant party up to date with important details. It also ensures that your roof warranty stays intact.
5. How will this impact my tenants?
Ask questions to commercial solar companies about how the solar system will affect the tenant experience. It will likely impact all of your commercial building’s tenants, present and future, so you’ll want to make sure it’s a value add.
6. How are tenants billed for solar?
Ask how they provide statements for tenant energy use. Most solar systems will still require some grid electricity use, so check if tenants will have to pay a bill for solar and a bill from the utility company. They may be sophisticated enough to combine them into a single statement. If they have an online billing portal, see if they can give you a walkthrough of the experience.
7. How much should my tenants expect to save?
See if the solar company has data or guarantees around tenant savings. With rising utility rates and energy costs, commercial tenants will appreciate the lower monthly bills.
8. Will solar disrupt tenants during installation?
Check to see if there is any impact to tenants during the installation of the panels. You’ll want to ensure limited disruptions. At the bare minimum, solar companies need to shut off power for safety outside of business hours before the utility gives the permission to operate.
9. Do you have enrollment policies for future tenants?
Ask questions to solar companies about opt-in or opt-out policies for future tenants at your building. Your solar system could be a big selling point for prospective leasees, so you’ll want to make sure the terms are flexible.
10. What happens if I have to sell my building?
Check to see if the terms of the solar system are transferable and how the process works. You probably have no plans to sell in the foreseeable future, but sometimes things change.
11. Are there penalties for transferring the solar system?
Clarify if there are any financial consequences to transferring the solar system in the case of a sale or change in ownership. This could streamline a transaction and avoid headaches later down the line.
12. How much power will the solar system generate?
Ask a solar company questions about how they’ll design the system and how much power it should produce. They may need past bills from tenants before they can estimate the energy needs of the building.
13. What happens to any extra solar energy?
Clarify what happens to the system’s excess solar energy if a unit is vacant or tenant needs are lower. Some financing options like PPAs charge property owners for unused solar energy. They’ll have to sell the power back to the utility for a loss.
14. Am I liable for operations and maintenance costs?
Ask a solar company questions about what aspects of operations and maintenance they cover. Items like routine inspections, panel cleaning, and component servicing can add up over the 20-30 year lifespan of the solar system.
15. Who pays for repairs and replacements?
You’ll also want to confirm who covers the costs for repairs or replacements. Glass panels can break and inverters can fail, so make sure you know who is footing the bill for their replacements.
16. Who does all of the paperwork?
Ask questions about who is responsible for county and state applications and permitting. Solar installations require a lot of paperwork. At a commercial scale, you’ll likely need a project manager to avoid lengthy delays.
17. Who coordinates inspections with the utility and county?
See who is responsible for coordinating site inspections, both internally and from the utility and county. They usually require them before installation and before the system is given permission to operate from the county.
18. What’s the overall cost?
Clarify whether there are down payments, interest rates, and long-term servicing fees associated with your commercial solar financing option. Some funding methods are straightforward and all inclusive, but many are not.
19. Will this raise my property taxes?
Confirm that your property taxes will not increase because of the installation. In California, the government protects most solar systems under the Active Solar Energy Exclusion, but be sure that your situation still applies.
20. Are there any escalators in the contract?
Check if there are any specific escalators built into the contract. If you’re signing a PPA, you may find the price of solar energy will increase by a certain percentage each year. Others, like roof rentals, increase the amount you’re paid over time.
21. How many projects have you completed?
Ask about the business’ reputation and experience before signing. This is the most important question to ask a solar company, as understanding their track record can make or break your project.
If you’re shopping for your shopping center, King Energy makes solar straightforward and financially beneficial for property owners and their tenants.
We rent unused roof space in multi-tenant buildings and install solar panels at no cost to owners. Landlords get increased rent roll and property value. Tenants get lower energy bills.
With over 100 managed projects in California under all three major utilities, King Energy is the leader in multi-tenant solar. We have proven funding solutions, seamless billing, and attentive client support.
Contact our team for a personalized rent proposal for your commercial building or shopping center.