Is Solar a Sensible Investment?

Solar Feasibility Study: Is Solar Right for Your Business?

• Updated on May 4, 2023 • [rt_reading_time postfix=”minute”] read

If you’re looking to install a commercial solar energy system, a solar feasibility study is a must.

What is a solar feasibility study? We’re glad you asked. Read on to learn more about this essential step business owners should take when launching their clean energy journey.

Table of Contents

A feasibility study sets you up for success

All commercial solar projects can benefit from a solar feasibility study.

First and foremost, a feasibility study assures you that solar will be a good investment by determining what is and isn’t possible based on your location and your budget.

It will also help you understand your solar potential – how solar can help you lower your energy costs, increase your resilience, lower your carbon emissions, or some combination of all three.

Perhaps most importantly, a solar feasibility study reduces your risk by identifying potential roadblocks that might impact the development of your solar project before they become a problem. It’s far easier (and more cost effective) to address any hurdles during the design stage rather than in the middle of your solar installation.

construction white hat on top of a solar panel

Who conducts feasibility studies for a commercial solar project?

Most solar providers that operate under the EPC model offer a feasibility study as a part of their package of bundled services.

Solar companies that operate under the more flexible design-build or EPC 2.0 business model offer feasibility services a la carte, which means you can get one done without having to buy an entire solar system.

man happy standing by solar panels

Types of feasibility studies

There are several types of feasibility studies that can be conducted. While they may be called by slightly different names, you’ll want to look for a provider that can provide the following types of services:

Technical feasibility studies

Site inspection

Before you do anything else, you need to make sure if your site is suitable for solar, and if so, whether a roof-mounted or ground-mounted array is best for your location.

For a roof mounted system, the provider will look at things like:

  • The age and style of your building – is it well-suited and positioned for solar energy production?
  • What does the roof look like – how big is it, how much available space is there for solar panels, what obstructions need to be worked around (like HVAC systems), is it in good condition, will it support the weight of the solar installation?
  • Are there shading issues that could impact the efficiency of your solar array and can they be mitigated? For example, you can likely cut down a few trees, but you won’t be able to move a high rise building that’s casting a shadow on your roof during peak solar production times.

For ground mounted solar systems, a feasibility study will look at the land around your building to understand things like:

  • Is there enough available land for the solar installation?
  • How far is the land is from your buildings (distance impacts the installation cost)?
  • Is the potential site in a floodplain or otherwise unsuitable for solar construction?
  • What needs to be done to prepare the site for solar, such as clearing or leveling the land, or addressing other topographical issues that might impact the performance of the solar panels?

Whether rooftop or ground mounted, the provider will also determine if there are environmental or regulatory considerations that will impact your solar project.

Electricity use analysis

Once you have confidence that your site can accommodate a solar array, you can move on to the next step in the solar feasibility analysis, which is to ensure that a solar system will satisfy your energy needs and goals.

Are you turning to solar to lower your energy costs, add resilience to your operations should there be a grid outage, reduce your carbon footprint, or are you looking to do all three things? The answers to these questions will inform the design of your solar project.

Your provider will also analyze your utility bills to see how much electricity you’re actually using and how much it’s costing you.

In addition to evaluating both current and historical electric bills, they’ll talk to you about how you expect your electricity needs to change in the coming years – they’ll want to know if you’re planning on adding a new building or operations, if you’re launching energy efficiency initiatives that will reduce your electricity demand, and so on.

Economic feasibility studies

The final step in a solar feasibility study is to understand if solar is a good financial investment for your business.

During this phase, your solar provider will help you understand the financial implications of installing solar. You can expect to learn more about the potential upfront costs, your levelized cost of energy (or how much your electric bill would increase over time if you didn’t have solar), the estimated payback period, and your financing options.

If you’ll be paying directly for your system with cash or a solar loan, your provider will discuss the solar incentives that are available. This could include applicable federal and state tax credits, rebates, and other financial tools that can reduce your initial investment.

Your provider can also discuss alternative financing options such as a power purchase agreement (PPA). Solar developers use PPAs to provide lower cost renewable energy to businesses that don’t want, or can’t afford to pay directly for a solar array. Rather, the developer constructs, operates, and maintains the solar system on your property, agreeing to sell you a portion of the electricity produced at a discounted rate for a set number of years (typically 10-25 years).

person looking and almost touching a solar panel

Getting You the Solar Energy System You Need

The time it takes to conduct a feasibility study depends on the size of the system, state and local regulations, and other factors. The larger and more complex the project, the more time consuming it will be.

Your solar provider will use the information gleaned during the feasibility study to make equipment recommendations, including the best types of solar PV panels, racking system, inverter, and battery storage system for your situation.

They’ll also use the data to determine the installed cost of your solar project. For example, there may be additional costs associated with preparing the site for your solar array. This could be as simple as trimming or removing trees, or as extensive as clearing land or reinforcing the roof.

Successful solar energy projects start with a thorough feasibility analysis. Contact Velo Solar to learn how a solar feasibility study will help achieve energy independence with a solar power system customized to meet your energy goals.