When it comes to installing commercial solar panels, there's no denying that it requires a large upfront investment. However, for businesses, the return on that investment and the length of the payback period are crucial factors that can heavily influence their decision to invest in solar or not.
However, there’s no one-size-fits-all answer to solar ROIs and payback lengths. The return you’ll see will be specific to several factors unique to your business. The main factors include the quantity and cost of the electricity you consume, the size of your solar system, the installation cost, the available tax benefits, and your local weather conditions.
In this blog, we aim to provide you with a comprehensive understanding of the value of a solar panel system to help you determine if solar pays for itself. After carefully analyzing investment data from our extensive collection of over 300 systems throughout the past year, we have meticulously compiled averages specific to each state and market sector, whether it be agricultural or commercial. This allows you to gain insights into the savings that others in your area have achieved through solar energy.
Not a business? Check out our blog on the ROI and payback for solar energy for homes.
Use the links below to jump ahead to the information for your state.
Farmers have always depended on energy from the sun to grow crops. Now, many farmers are also turning to the sun for the electricity that powers their farms and saves them money on energy bills.
Whether you raise livestock or crops, farms can use a great deal of electricity. Solar energy can help you gain control of rising energy costs, slashing your overhead and boosting your bottom line.
Farmers from Virginia to Upstate New York are seeing first-hand the economic benefits of an investment in solar energy.
Average System Size: 82.21 kW
Average Annual Production: 146,024 kWh
What’s the Average ROI of Solar for Delaware Farmers?
On average, farmers in Delaware can expect a solid return on investment of 17.8% from their solar panel installation.
What is the Average Payback of Solar for Delaware Farmers?
On average, farmers in Delaware can expect their solar panels to recoup their initial investment within 9 years. This means they will have a substantial period of 20+ years to enjoy the benefits of free solar electricity from their panels.
Average Annual Production: 75,000 kWh
What’s the Average ROI of Solar for Maryland Farmers? An average solar system installed on a Maryland farm will have an ROI of 17.8%.
What is the Average Payback of Solar for Maryland Farmers?
On average, Maryland farms can recoup their investment in solar panel systems in just 7.5 years, giving them decades of free electricity production from the system's 25-30-year lifespan.
Average System Size: 238.5 kW
Average Annual Production: 276,070 kWh
What’s the Average ROI of Solar for New York Farmers?
New York farmers, on average, can expect an ROI of 16% on solar panels.
What is the Average Payback of Solar for New York Farmers?
The average agricultural system in New York has a solar panel payback period of 8.8 years. That leaves at least 23 years of the solar system’s 30+ year lifespan of free electricity.
Average System Size: 84.86 kW
Average Annual Production: 95,663 kWh
What’s the Average ROI of Solar for Ohio Farmers?
Ohio farmers will get an 11.2% ROI for their solar systems.
What is the Average Payback of Solar for Ohio Farmers?
The average farmer in Ohio will pay off their system in 13 years, leaving a comfortable majority of solar’s 30+ year lifespan to provide free electricity.
Average System Size: 92.5 kW
Average Annual Production: 103,249 kWh
What’s the Average ROI of Solar for Pennsylvania Farmers?
A solar system installed on a Pennsylvania farm has an average ROI of 14.75%.
What is the Average Payback of Solar for Pennsylvania Farmers?
Pennsylvania farmers will pay off their solar panels with electricity savings and other benefits in less than 8.45 years. That leaves nearly two decades of solar’s 30-plus-year lifespan to provide free electricity.
Average System Size: 170 kW
Average Annual Production: 216,495 kWh
What’s the Average ROI of Solar for Virginia Farmers?
A solar energy investment can provide a 20.9% ROI on average for Virginia farms.
What is the Average Payback of Solar for Virginia Farmers?
In just 5.5 years, Virginia's average agricultural solar energy system will have paid for its solar system.
Cutting costs for your business means increased profits. But only if those cost-cutting measures don’t interfere with production, service, or quality.
Solar energy offers a way to do just that.
Tax credits and other savings make the upfront investment easy, keeping paybacks short and ROIs high.
Average Annual Production: 112,965 kWh
What’s the Average ROI of Solar for Delaware Businesses? The average Delaware business can expect an 18% ROI on its solar investments.
What is the Average Payback of Solar for Delaware Businesses?
The average business will pay off its solar panels in 11 years, leaving decades in the system’s 30-plus-year lifespan to produce free electricity.
Average System Size: 42.9 kW
Average Annual Production: 47,090 kWh
What’s the Average ROI of Solar for Maryland Businesses?
Maryland businesses, on average, enjoy a 17.22% ROI on their solar investments.
What is the Average Payback of Solar for Maryland Businesses?
The average business will pay off its solar system in 8.75 years. That leaves decades in the solar system’s 30+ year lifespan to produce free electricity.
Average Annual Production: 194,283 kWh
What’s the Average ROI of Solar for New York Businesses?
Commercial solar panels will earn New York businesses, on average, a 13.8% ROI.
What is the Average Payback of Solar for New York Businesses?
The average business in New York will pay off its solar system in 11.5 years. That leaves over two decades in the solar system’s 30+ year lifespan to produce free electricity.
Average Annual Production: 241,409 kWh
What’s the Average ROI of Solar for Ohio Businesses? Ohio businesses will get an 11.7% ROI for their solar systems on average.
What is the Average Payback of Solar for Ohio Businesses?
On average, Ohio businesses will recoup their investment in solar panels within 11.8 years, leaving them with almost two decades of the solar system's expected lifespan to enjoy free electricity.
Average System Size: 143.99 kW
Average Annual Production: 153,388 kWh
What’s the Average ROI of Solar for Pennsylvania Businesses?
A solar system can provide an average ROI of 17% for Pennsylvania businesses.
What is the Average Payback of Solar for Pennsylvania Businesses?
Pennsylvania businesses can expect to recoup their solar panel investment through electricity and tax savings in just 8.2 years, leaving them with more than half of the solar system's expected lifespan of 30+ years.
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Average Annual Production: 129,515 kWh
What’s the Average ROI of Solar for Virginia Businesses? Virginia businesses can earn a 20% ROI on their solar energy investment.
What is the Average Payback of Solar for Virginia Businesses?
In just 6 years, the average Virginia business will have paid for its solar system with the money saved from its solar system. That leaves over two decades of the solar system’s 30+ year expected lifespan.
Average ROI for All Agricultural Projects: 16.4%
Average ROI for All Commercial Projects: 16.2%
A good way to determine the value of your solar system’s ROI is to compare it to the ROI of investing in stocks. Most agree that an average, long-term stock investment should provide about a 10% ROI.
In most states, solar energy investments for farms and businesses offer a higher return than 10%. Additionally, the risks associated with investing in solar energy are far less than investing in the stock market.
With solar, your return is dependent on the sun shining and your need for electricity. Both are all but guarantees. When it comes to the stock market, your profits are reliant on the success of the company you've invested in and the overall state of the economy, which is influenced by unpredictable consumer behaviors.
Average Payback for Farm’s Solar Panels: 8.7 Years
Average Payback for Business’s Solar Panels: 9.5 Years
A large portion of the return on solar panels is front-loaded with the tax credit, USDA grant, and accelerated depreciation being returned in the first few years. The remainder of your investment will gradually pay off through the free electricity they produce. Instead of paying your monthly electricity bill from the utility, you can put it towards paying for the upfront cost of the solar system.
But unlike the never-ending bills from the utility company, you’ll eventually finish paying for your system. After that, everything you save on your energy bills goes right to your bottom line for the remainder of the system’s life.
Many solar panel manufacturers guarantee their solar panels for 25 or 30 years. That means they should be generating free electricity for at least that long.
In our data set, these warranties expire long after the average payback period. And once the warranty expires, your system may continue producing plenty of free energy for years to come.
Are you interested to see how solar energy could benefit your business or farm? The first step is to request your free custom quote. Your quote will provide a complete picture of what a solar investment would look like, including the installation cost, available incentives, ROI, payback, and a 30-year cash flow.
If you are not yet ready to receive a quote, you can utilize our solar savings calculator to promptly obtain an estimated price, payback period, and ROI based on the average amount of your electric bill and your location.
This data was last updated on January 2024.