Investing in commercial solar panels is more than just a step toward sustainability—it’s a strategic move to lower energy costs, reduce tax liabilities, and strengthen your business’s long-term financial health.
Yet, for most business leaders, the decision hinges on two key factors: the return on investment (ROI) and payback period.
So, the big question remains: is solar a smart financial move for your business in 2025?
While solar isn't a one-size-fits-all solution, we’ve analyzed data from over 160 agricultural and commercial solar installations completed by Paradise Energy in the last year to give you a clear picture of what to expect.
In this blog, we explore this data to provide you with a clear picture of what a solar panel investment could look like for your business and how you can maximize your solar investment in 2025.
Key Takeaways
Overall Performance:
- Average ROI for commercial solar installations: 13.56%
- Average Payback Period: 10.48 years
By Mounting Type:
Ground Mount Installations:
- ROI: 12.41%
- Payback Period: 11.85 years
Roof Mount Installations:
- ROI: 13.73%
- Payback Period: 10.25 years
State Highlights:
- Pennsylvania had the highest average ROI: 14.45%
- Pennsylvania had the shortest average payback period: 9.42 years
System Metrics:
- Average system size: 99.36 kW
- Average system cost: $234,512
Commercial Solar ROI & Payback: What to Expect in 2025
For the sake of this report, we grouped all our agricultural and commercial solar installations into one group of over 160 installed solar projects. This report breaks down the results from all of those projects.
What’s The Average Return on Investment (ROI) for Commercial Solar Installation?
With an average ROI of 13.52%, Solar energy consistently outperforms traditional investments, such as stocks on the S&P 500. While long-term stock investments generally yield around a 10% ROI, the data shows that business leaders can expect a higher annual return on a solar panel investment.
What makes solar an even better investment is its predictability. Solar ROI depends on two reliable factors: the sun shining and your electricity needs—both of which are virtually guaranteed. In contrast, stock market returns rely on company performance and economic conditions, which can be unpredictable and volatile.
- Average ROI for commercial solar installations: 13.56%
- Average ROI for a commercial roof mounted solar installation: 13.73%
- Average ROI for a commercial ground mounted solar installation: 12.41%
What's The Average Break-Even Point for Commercial Solar Panels?
The average payback period for commercial solar panels is 10.43 years with an average system lifespan of over 30 years.
One of the most attractive aspects of solar investments is how quickly they start to pay off. You're combining the elimination of an expense with the federal tax credit, USDA grant, and accelerated depreciation to deliver significant front-loaded financial benefits within the first few years.
After the initial payback period, your savings on electricity costs flow directly to your bottom line. Unlike utility bills, which never end, your solar system's cost is finite. Once it’s paid off, you’re replacing an uncontrolled expense with guaranteed savings.
- Average payback period for commercial solar installations: 10.48 years
- Average payback period for a commercial roof mounted solar installation: 10.25 years
- Average payback period for a commercial ground mounted solar installation: 11.85 years
Commercial Solar ROI & Payback By State
Although Paradise Energy Solutions currently provides commercial solar installations and maintenance services in eight states, most of our agricultural and commercial installations in the past year were in six states.
We’ve compiled the data from six states to provide you with a breakdown of the average system size, cost, ROI, and break-even point.
Commercial solar panel performance varies by state, with Pennsylvania leading in ROI at 14.45% and the shortest payback period of 9.42 years. Maryland also delivers strong results with an ROI of 14.25% and a payback period of 9.82 years.
Delaware's Commercial Solar Panel ROI & Payback Length
- Average System Size: 65.79 kW
- Average System Gross Cost: $158,004
- The Average ROI:10.88%
- The Average Payback Period: 15.8 years
Maryland's Commercial Solar Panel ROI & Payback Length
- Average System Size: 45.07 kW
- Average System Gross Cost: $133,860
- The Average ROI:14.25%
- The Average Payback Period: 9.82 years
New York's Commercial Solar Panel ROI & Payback Length
- Average System Size: 90.91 kW
- Average System Gross Cost: $211,397
- The Average ROI:12.86%
- The Average Payback Period: 11.57 years
Ohio's Commercial Solar Panel ROI & Payback Length
- Average System Size: 157.28 kW
- Average System Gross Cost: $322,438
- The Average ROI:11.26%
- The Average Payback Period: 12.56 year
Pennsylvania's Commercial Solar Panel ROI & Payback Length
- Average System Size: 103.61 kW
- Average System Gross Cost: $247,074
- The Average ROI:14.45%
- The Average Payback Period: 9.42 years
Virginia's Commercial Solar Panel ROI & Payback Length
- Average System Size: 84.73 kW
- Average System Gross Cost: $231,202
- The Average ROI:11.98%
- The Average Payback Period: 12.63 years
Common Questions About A Commercial Solar Investment
What incentives or tax benefits are available to improve the ROI of solar panels?
Yes, several incentives and tax benefits can significantly improve the ROI of solar panels. Commercial solar systems under 1 MW AC qualify for a federal tax credit of 30% or more, depending on eligibility for additional 10% "adders" such as energy community or domestic content bonuses. Businesses can also take advantage of accelerated depreciation.
Beyond tax incentives, the USDA REAP Grant and various local grant programs are available to help offset the upfront installation costs.
How do maintenance costs affect the ROI of a solar panel system?
A solar panel system requires relatively low maintenance if properly installed. In most cases, the component that will require attention is the inverter. The good news is both solar panels and inverters come with extensive warranties. At Paradise Energy, we go even further by offering our Triple Ten Guarantee, which covers most maintenance and warranty-related work, reducing potential out-of-pocket expenses for our customers.
These are some additional maintenance costs to consider:
- Solar panel cleaning: This may be necessary in dusty environments to maintain peak efficiency.
- Panel removal and reinstallation: This could be required for roof repairs or replacement. This service costs roughly $275-$300 per panel. We recommend installing solar panels only if your roof’s remaining lifespan is expected to exceed the payback period of your solar system. Otherwise, it may be best to install a new roof first.
How does a solar investment compare to purchasing machinery or other equipment?
Both solar investments and new machinery have distinct benefits, but they serve different purposes within a business. Here’s a comparison of the two:
- Solar reduces expenses: Solar lowers electricity costs and protects against rising energy rates, making it a cost-saving mechanism. In contrast, machinery increases operational costs such as energy, maintenance, and wages.
- Machinery boosts production: Purchasing new machinery can increase production capacity and improve throughput, driving revenue growth—something solar does not do.
- Long lifespan with minimal maintenance: Solar systems are designed to last 30+ years with minimal upkeep, while machinery typically requires regular maintenance, repairs, and eventual replacement.
- Tax benefits: Solar offers unique financial incentives like the federal solar tax credit and accelerated depreciation, while machinery may only provide standard depreciation benefits and deductions for business expenses.
- Return on investment: Solar delivers a front-loaded ROI, meaning most financial benefits are realized early in the investment. Machinery, on the other hand, often provides a steady, flat-line return tied to increased production.
While solar primarily focuses on reducing costs, new machinery can drive business growth by enhancing efficiency and production capabilities. Prioritizing a solar investment allows you to leverage its front-loaded returns—such as significant tax savings and energy cost reductions in the initial years—to support other capital expenditures. By capitalizing on solar’s early financial returns, you can strategically invest in both cost savings and operational expansion.
What are the risks that could impact your solar ROI or payback?
There are several risks that could impact the ROI and payback of your solar investment, including:
- Net metering changes: If net metering policies are discontinued or changed, the value of the energy your system produces could decrease significantly.
- Dramatic electricity rate drops: Lower utility rates would reduce the cost savings from solar, potentially extending the payback period.
- Installer going out of business: If your installation company shuts down, it could affect warranty coverage and access to ongoing support.
- Equipment manufacturer goes under: If one of your equipment manufacturers closes their doors, it will impact your warranty coverage.
- Loss of the SREC market: If the Solar Renewable Energy Credit (SREC) market is discontinued or the value of a credit diminishes, you could lose an additional revenue stream that contributes to your system's ROI.
Discover Your Solar Investment ROI and Payback
Are you interested to see how solar energy could benefit your business’s bottom line? The first step is to talk with one of our solar consultants. Your solar consultant will empower you to make an informed decision by answering your questions, reviewing your site’s solar feasibility, and providing detailed numbers for your investment.
If you are not yet ready to talk with a solar consultant, no problem. We have tools for you to continue investigating solar on your own. Use our solar payback calculator, visit our solar learning center, and hear from other business leaders who have invested in solar.
