As organizations seek to reduce energy costs, improve sustainability, and increase operational reliability, the shift toward adopting renewable energy is accelerating. With the rapid advancements in clean energy technologies and evolving market dynamics, embracing solar photovoltaic (PV) and energy storage solutions will be key to unlocking long-term value and driving sustainable growth for commercial and industrial (C&I) enterprises.  

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This two-part guide will provide you with an understanding of solar and energy storage solutions tailored for C&I applications. Part 1 will cover the fundamentals of these clean energy technologies — their use cases and benefits — and will dive into financing options and tax incentives that ensure positive returns on projects. Part 2 will give a comprehensive overview of the full project lifecycle so you know what to expect at each step, from development and implementation to operation and final exit strategy.

Whether you're a business leader, operations manager, or sustainability professional, this guide will serve as your roadmap to maximizing the full potential of clean energy solutions for your facilities and realizing economic, environmental, and operational benefits for stakeholders.  

Benefits of Solar Generation & Battery Energy Storage

Commercial and industrial solar and battery energy storage systems are designed primarily for onsite use to meet the energy needs of facilities such as manufacturing plants, warehouses, offices, schools, shopping centers, and apartment complexes. For properties with low energy usage, excess clean energy that’s generated can be sold back to the grid or shared with the local community.

Although solar and energy storage systems can function independently, the opportunities to value stack increases when they are integrated and operated in tandem. Let’s start by discussing the benefits of these systems individually, then go into the additional benefits of their combined operation.  

Solar Photovoltaic (PV) System Benefits

Some of the key benefits of installing a solar PV system for businesses include:

Reduced Energy Costs

One of the primary benefits of solar generation is the potential for significant cost savings on electricity bills. By producing their own energy, organizations can offset a portion or even the entirety of their electricity consumption, reducing reliance on grid power and lowering energy expenses for the life of the system.

Stabilized Energy Costs  

PV systems provide a hedge against future energy price volatility by securing stable and predictable energy costs for the long term. Unlike traditional utility electricity rates, which can fluctuate due to changes in fuel prices and market conditions, the price of solar energy is contractually locked-in, whether in the form of leases or power purchase agreements (PPAs). If the system is paid for upfront, then the power generated is essentially free for the life of the system.  

Long-Term Asset Value

Solar energy systems represent a long-term investment in energy infrastructure that can enhance the value of commercial properties and facilities. Installations typically have long lifespans (25 years or more) and require minimal maintenance, providing reliable energy production and long-term cost savings over the system's lifetime.  

Environmental Sustainability

PV systems produce clean energy without emitting greenhouse gases or air pollutants, helping reduce carbon footprints and mitigate environmental impacts. This allows organizations to comply with local, state, and federal net-zero regulations and mandates.

Brand Reputation

By transitioning to solar energy, organizations can demonstrate their commitment to sustainability, corporate social responsibility (CSR), and environmental stewardship, which can enhance brand reputation and attract environmentally conscious customers, employees, and partners.  

Battery Energy Storage System Benefits

Some of the key benefits of energy storage for businesses include:

Optimized Energy & Load Management

Battery energy storage systems optimize energy and load management strategies by balancing energy supply and demand in real time. Advanced energy management software helps monitor energy usage, forecast demand patterns, and optimize battery charging and discharging schedules for maximum efficiency and cost savings.

Peak Shaving & Demand Charge Management

Energy storage can "shave" peak loads by discharging stored energy to offset spikes in electricity demand. This in turn lowers demand charges, which are based on the highest level of electricity usage during peak demand periods. By strategically discharging stored energy during these times, peak loads and the resulting demand charges are reduced, leading to significant cost savings on electricity bills.

Energy Arbitrage

Battery energy storage systems also enable organizations to buy and store electricity when prices are low and sell it back to the grid or use it when prices are high, thereby profiting from the price difference. This strategy leverages fluctuations in electricity prices throughout the day, typically driven by changes in demand, supply, and market conditions. By optimizing the timing of energy consumption and storage, energy arbitrage can help reduce electricity costs, maximize revenue, and improve the economic viability of renewable energy and energy storage projects.

Grid Services & Demand Response

Grid services — such as frequency regulation, voltage support, and grid stabilization — are also made possible by battery energy storage systems, supporting the integration of renewable energy and enhancing grid reliability. In some regions, organizations can participate in demand response programs or sell excess stored energy back to the grid, which generates additional revenue streams and offsets operating costs.

Backup Power & Resilience

Battery energy storage systems can provide backup power capabilities, ensuring continuity of operations during grid outages or emergencies. By storing energy on site, organizations can maintain critical operations, protect sensitive equipment, and avoid costly downtime — improving resilience and reliability.

Integrated Solar-Plus-Storage Solutions

When solar generation and energy storage are integrated, businesses can reap these additional benefits:

Maximized Solar Self-Consumption

Battery energy storage systems complement solar generation by storing excess energy for use when generation is unavailable or insufficient. By prioritizing self-consumption of excess solar power rather than exporting it to the grid, organizations can maximize their use of clean energy and reduce reliance on grid power. This can reduce their electricity bill, decrease their greenhouse gas emissions, and demonstrate their commitment to sustainability.

Maximized Financial Value of Solar Exports

Recent new policies and regulations have negatively impacted the financial returns of solar-only systems. In California, for example, the latest update to the state’s Net Energy Metering policy (NEM 3.0) reduced grid export rates during peak daylight hours by about 75%. It is now more economical to store excess energy for self-consumption or delay grid export to premium-priced hours. If other states start adopting similar policies, the payback period of integrated solutions is predicted to be shorter than solar-only systems.  

Energy Independence

Solar PV systems provide greater energy independence and resilience by diversifying their energy sources and reducing reliance on grid power. When integrated with a battery energy storage system, they can help mitigate risks associated with utility outages, grid instability, and energy supply disruptions — ensuring continuity of operations and minimizing downtime during emergencies or natural disasters.

Ownership Structures & Financing Options for Solar & Energy Storage Projects

A variety of ownership structures and financing options are available for solar and energy storage projects, providing organizations with the flexibility to select a model that fits their business needs. Clean energy projects also typically qualify for attractive financial incentives that help offset upfront costs and improve return on investment (ROI).  

Direct Ownership

In this structure, the business or property owner directly owns the system installed on their premises. Direct ownership provides full control over the system and allows the owner to benefit from energy cost savings, tax incentives, and other financial returns. However, it requires upfront capital investment and requires the owner to handle system maintenance, operation, and performance monitoring.

Financing options for direct ownership include:

Cash Purchase

Some organizations choose to purchase solar and energy storage systems outright using cash reserves or capital budgets. Cash purchases offer the benefit of immediate ownership and long-term cost savings, as businesses can avoid financing costs and benefit from energy savings and incentives over the system's lifespan.

Loans

Loans allow organizations to finance solar and energy storage projects with a fixed or variable interest rate over a predetermined term. With loans, organizations can spread out the upfront costs of the project over time while retaining ownership of the system. Interest rates, loan terms, and eligibility criteria vary depending on the lender and financing terms.

Third-Party Ownership (TPO)

Third-party ownership arrangements involve a third-party provider financing, installing, and owning the solar or energy storage system on the customer's property. The customer agrees to lease the system or purchase electricity or energy services at a predetermined rate over a long-term contract period. TPO arrangements allow organizations to benefit from solar and energy storage without upfront capital costs and ownership responsibilities, but they may involve higher long-term costs compared to direct ownership.

Financing options for TPO arrangements include:

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• Leasing or Rental Arrangements: Allow organizations to lease solar or energy storage systems from third-party providers for a fixed monthly fee or lease payment. The leasing company owns and maintains the system while the lessee benefits from reduced energy costs and potential tax incentives. Leasing offers a low-risk, no-money-down option for accessing clean energy benefits without upfront capital costs or ownership responsibilities.

• Power Purchase Agreements (PPAs): Contractual agreements between a solar or energy storage project developer (seller) and a business or property owner (buyer) for the purchase of solar electricity or energy storage services at a predetermined rate over a specified contract term. PPAs typically involve the developer financing, installing, and operating the systems, while the buyer agrees to purchase the electricity generated or energy services. PPAs offer fixed or escalating electricity rates, enabling buyers to hedge against future utility price volatility and benefit from long-term energy cost savings without upfront capital investment.

• Energy Savings Performance Contracts (ESPCs): Allow companies to finance battery energy storage projects using energy cost savings generated by the system. Under an ESPC, an energy services company (ESCO) designs, installs, and finances the energy storage system and the company pays for the project over time using a portion of the energy cost savings realized from improved energy efficiency or demand management.

Co-Ownership  

Co-ownership involves multiple entities or stakeholders jointly owning and operating solar or energy storage systems. Co-owning arrangements can include partnerships, joint ventures, or community solar projects where participants share ownership rights, costs, and benefits of the system. Co-ownership allows organizations to pool resources, share risks, and access clean energy benefits while fostering collaboration and community engagement. All financing options for direct and third-party ownership structures are similarly available under the co-ownership model.

Each clean energy project ownership structure has its own implications for financing, tax benefits, and operating and maintenance responsibilities. Organizations should carefully evaluate their energy needs, in-house talent, financial objectives, and risk tolerance when selecting the most suitable ownership and financing models for their projects.  

Financial Incentives & Tax Benefits of Solar & Energy Storage Projects

Organizations that install clean energy systems may be eligible for various financial incentives and tax benefits. Incentives vary by region and can help offset the upfront cost of system installation and improve the return on investment. It is essential for organizations to research and explore available incentives in their area and consult with developers or energy advisors to maximize the financial benefits of each project. Incentives and programs may change over time, so staying informed about updates and changes to incentive programs is crucial for positive project economics.

Commonly available incentives and tax benefits include:

Federal Investment Tax Credit (ITC), Grants, and Loans

The federal government offers a tax credit equal to a percentage of the eligible cost of installing a PV or energy storage system. This incentive reduces the upfront cost of installing solar and can significantly lower the overall project cost. There are also grants, loans, or financing programs to support renewable energy projects for certain eligible entities such as nonprofits, schools, and government agencies.  

State & Local Incentives

Some states offer additional incentive programs, grants, or low-interest loans for solar installations. These programs may target specific customer segments, such as low-income households, or nonprofits, and provide financial assistance to help offset the cost of solar adoption.

Utility Programs & Incentives  

Many utilities offer incentives or programs to encourage customers to install solar and energy storage systems to contribute renewable energy to the grid or help alleviate stress on the grid. Examples include net metering, demand response programs, performance-based incentives for grid services, and direct-cash rebates.

Solar Renewable Energy Certificates (SRECs)

Some states have SREC programs that allow PV system owners to earn tradable certificates for every megawatt-hour (MWh) of solar electricity generated. These certificates can be sold or traded on the open market, providing additional revenue streams for solar producers.

Property Tax Exemptions

In many states, PV system installations are eligible for property tax exemptions or assessments, which can reduce property taxes associated with the increased property value resulting from solar installations.

Monetization of Tax Credits

In some cases, organizations with no tax liability may be able to monetize the tax credits by selling them to tax-equity investors or financial institutions through third-party arrangements or tax credit monetization services. This allows the organization to receive cash proceeds in exchange for transferring the tax credits to entities with tax liability who can utilize them.  

Accelerated Depreciation

Organizations may benefit from accelerated depreciation schedules for solar and energy storage assets, allowing them to deduct a portion of the project costs from taxable income over a shorter period. In the United States, the Modified Accelerated Cost Recovery System (MACRS) can enhance the financial returns and cost recovery of solar and energy storage investments.

By leveraging different incentives and tax benefits, organizations can make solar and energy storage projects more affordable and economically attractive. Organizations should consult with clean energy experts, legal advisors, and financial professionals to navigate the complexities of incentive management and tax codes to maximize the benefits of clean energy investments.  

Next Steps

Now that the applications, benefits, and economics of solar and energy storage solutions have been demystified, we hope that you are ready to kick off your first clean energy project. A qualified vendor who has the knowledge and expertise to translate your vision into a strategic roadmap, and the practical experience to execute successfully, can be a valuable partner on your clean energy journey. Get a head start by researching available incentives in your area by visiting our Policy Hub.  

Stay tuned for Part 2 of this guide, which will walk you through the project lifecycle and share the most effective strategies for navigating each stage and evaluating potential vendors.

Commercial energy storage systems are specialized power integration units customized to capture, store, and dispatch energy in business enterprises. Solar energy storage systems, in particular, help businesses maximize profits by lowering expenses on conventional electricity.

Properties of Energy Storage Systems for Businesses

Commercial businesses may have different power needs than residential neighborhoods.  As a result, they require unique energy storage systems to meet their different energy demands. Below are the key features of commercial energy storage systems.

· Battery Technology

Energy storage systems are generally tasked with preserving the excess energy harvested during peak input hours. This energy is stored in high-capacity batteries and utilized whenever the sun dies or the power supply from the main grid is cut off. In business energy storage systems, lithium-ion batteries are the most prominently exploited batteries.

· Energy Capacity

The batteries deployed in commercial energy storage systems have varying energy capacities. However, the energy capacity is often higher than that of residential solar batteries. The capacity is expressed in kilowatts-hour (kWh) and businesses often pick capacities that match their power demands.

· Power Rating

Power storage systems have a power rating, which is calculated in kilowatts (kW). Power rating dictates the amount of power the commercial energy storage system can supply at a specified time. High power ratings are necessary for business energy preservation systems to ensure power demand is sufficiently gratified even during peak hours.

· Depth of Discharge

Depth of discharge is a parameter that quantifies the amount of stored energy that can be utilized before the energy storage system is recharged. Commercial battery storage systems often have deeper discharge depths making them economical and reliable.

Parts of a Commercial Energy Storage System

Grid accessibility and reliability remain a cause for concern for multiple businesses across the globe.

This coupled with the need to economize on energy consumption has prompted the creation of commercial energy storage systems, which are continually becoming more prominent. These systems feature numerous components, namely:

· Battery Storage

The primary function of energy storage systems is to preserve and distribute energy. The storage function is accomplished using batteries, which can either be lithium-ion or lead-acid batteries. In solar energy storage systems for business, the batteries are fed excessive energy by solar panels.  （补：Of course, the battery can also be charged from the grid when electricity prices are low.）

· Battery Management System

The battery management system acts as the user interface for the commercial energy storage system. The main role is to intelligently manage and maintain each battery unit, to make the battery function more stable and safe by real-time monitoring of the battery status, and to extend the service life of the battery. This consequently helps businesses protect their batteries thereby optimizing their performances and lifespans.

· Inverters

The inverter is a bi-directional current controllable conversion device connecting the energy storage battery system and the power grid, and its main function is to realize the energy exchange between the battery and the power grid, and to control and manage the charging and discharging of the battery, which can be converted from AC to DC for charging the battery, and also converted from DC to AC to supply power for the loads or to feed back to the power grid.

Benefits of Commercial Energy Storage Systems

Businesses are generally profit-driven and in the energy-conscious world we live in, the need for commercial entities to employ sustainable and economical energy solutions has never been greater. Beneath are the principal benefits businesses reliant on commercial energy storage systems continue to reap.

· Cost-Savings

Commercial energy storage systems offer numerous cost-saving advantages to commercial entities. First, the use of solar-powered energy storage systems saves businesses the cost of buying electricity from the main grid. Secondly, these systems act as emergency backup options, when power runs out thereby shielding businesses from losses that arise when the power supply is low.

· Environmental Benefits

Energy storage systems, particularly those powered by solar energy or other renewable energy sources have zero carbon emissions. This helps businesses fulfill the stringent carbon footprint goals proposed by the authorities.

· Self-Sufficiency

In addition to the cost-saving and environmental benefits, energy storage systems offer to businesses, they also help businesses become independent. They eliminate reliance on grid connections, which can be unreliable at times.

Applications of Commercial Energy Storage Systems

The incorporation of solar energy storage systems in commercial enterprises has proliferated in recent years. This is primarily because businesses are now necessitated to be energy conscious. Underneath, we look at the primary uses of energy storage systems in businesses today.

• Backup Power: Businesses utilize energy storage systems to reserve excess energy for use during power outages or emergencies.
• Peak Shaving: Commercial entities also exploit energy storage systems to lower the cost of power paid during peak hours. This results in reduced costs and higher profits.
• Grid Support: Certain businesses, specifically large-scale businesses supply the harvested solar energy to the grid to relieve the stress on the grid during peak demand.
• Off-Grid Businesses:Commercial enterprises in remote areas rely on commercial energy storage systems to fulfill their energy demands.