Solar power for a small business: a practical checklist

Does solar suit a small business?

The match between when a building uses power and when panels produce it matters more than the size of the roof. A shop, clinic or workshop that runs lights, refrigeration and equipment during the day can use most of what the panels generate. A business that only uses power in the evening exports more to the grid and gets less value per kilowatt hour. Whether exported power earns a credit, a lower rate or nothing depends on the utility, so the first step is to ask how your own is treated. Our guide to net metering in Alberta shows what such rules look like in one province.

Panels on a roof or ground mount are the same technology a home uses, only larger. The basic trade-offs are covered in are solar panels worth it in Canada.

What should you gather before asking for quotes?

Installers can only size a system from real numbers, so collect these first:

• Twelve months of electricity bills. They show total use, seasonal swings and the demand or fixed charges that solar will not reduce.
• Roof details. Age, material, orientation, shading and the structural capacity. A roof that needs replacing in a few years is better redone before the panels go on.
• Ownership. If you lease the premises, the landlord has to agree, and the lease term should be long enough to recover the cost.
• The utility connection. Service size and meter type decide how the system is connected.

With those in hand, the guide to comparing solar quotes and the installer checklist help you judge the proposals.

How do small business solar savings work?

Every kilowatt hour the panels supply is one you do not buy at the retail rate, which usually makes self-use the main source of savings. A simple way to frame it: estimate annual production, estimate the share used on site, and multiply that share by your energy rate. Exported power is then valued separately. Treat any installer estimate as an input to check. How to read a solar production estimate explains the assumptions behind the numbers.

Costs for commercial systems vary with size, mounting, electrical work and region, and prices change from year to year. Quotes decide. The home-scale cost drivers in solar panel cost in Canada carry over, and payback period shows how to turn a quote into a time frame.

What tax treatment and incentives might apply?

Businesses are treated differently from households. Equipment may qualify for a capital cost allowance, and some clean energy equipment has had access to investment tax credits or accelerated write-offs. The rules change, so ask your accountant. Two guides explain the general ideas: solar tax guide for small business and capital cost allowance for solar.

Provincial and utility programs exist for business solar in some places and not in others. Check the Government of Canada energy-efficiency pages, your provincial energy ministry and your electricity utility for current terms. For one province, see small business solar incentives in Alberta.

Should you buy, finance or sign a power purchase agreement?

Buying outright gives the business the savings and the tax position, and ties up capital. Financing spreads the cost, and the monthly payment should be compared with the expected bill reduction. A lease or power purchase agreement lowers the upfront outlay, but you give up ownership benefits and agree to long contract terms. Solar lease versus PPA and solar financing options lay out the differences.

Whichever route you take, confirm who handles permits, utility approval, insurance, monitoring and repairs, and read the warranty terms before signing.

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