Commercial & small business

Commercial solar vs. grid-only: 10-year comparison

Line up 10 years of cumulative solar ownership cost against 10 years of grid-only electricity cost. See the exact year your solar spending drops below what you'd have paid the utility.

Your numbers

1 Project details Optional
Shown on your exported report. Leave blank to skip.
2 Your system
From your installer's proposal, or the size by square footage tool.
US commercial systems typically run $1.10 to $1.80 per watt before incentives.
Typical commercial O&M runs $15 to $25 per kW per year.
3 Your electricity usage and rate
Use your installer's production estimate, or the capacity factor calculator.
What you pay the utility today, from a recent bill.
US and Canadian utility rates typically rise 2% to 4% a year.
4 Incentives
Check the ITC calculator if you're unsure which rate applies.
Leave blank if your state or utility doesn't offer one.

How it works

Three steps to your crossover year

Step 1

Get your net solar cost and O&M

Start with an installer quote for system cost, then confirm your ITC rate with the ITC calculator. Add your expected annual O&M, since that's the only ongoing cost on the solar side of this comparison.

Step 2

Enter what you'd otherwise pay the grid

Use your current blended rate and a realistic escalation assumption. This builds the grid-only side of the comparison, year by year, for the electricity your solar system would have produced, similar to the escalation modeling in the PPA escalator tool.

Step 3

Check your crossover year and 10-year savings

See exactly when solar's cumulative cost drops below grid-only spending. For the full 25-year version of this math, run the 25-year TCO calculator next.

Understanding solar vs. grid-only over 10 years

What the crossover year actually shows you

Most businesses save $50,000 to $150,000 over 10 years per 150 kW installed, with the exact crossover year depending on system cost and electricity rate. A 150 kW system with a $163,000 net cost crosses over in year 7 against a $0.11/kWh rate rising 2.5% a year, and finishes 10 years about $84,571 ahead of the grid-only path. That 2.5% escalation assumption is a conservative long-run average, since the EIA's Electric Power Monthly report has tracked commercial rate increases well above that pace in the current environment, which would only pull the crossover year earlier.

Why this differs from a simple payback number

Payback usually nets your electricity savings against your cost each year, so the number turns positive right at breakeven. This comparison keeps both cost lines separate instead, cumulative solar spending against cumulative grid spending, which makes it easier to see at a glance which path costs more at any given year. Check the payback calculator for the netted version of this same math.

What pushes the crossover year earlier

A lower installed cost per watt, a bigger ITC or rebate, or a higher starting electricity rate all pull the crossover year forward. Businesses on rate schedules with steep demand charges often see an earlier crossover than this simple usage-based model suggests, since demand charge savings aren't broken out separately here. Check the demand charge reduction estimator if that applies to your rate structure, and the utility rate increase sensitivity calculator to see how a faster or slower escalation assumption shifts the crossover point.

What happens after year 10

Solar's cumulative cost keeps growing slowly, driven only by O&M, while grid-only cost keeps compounding with each year's rate escalation. That gap widens every year after crossover, which is why the 25-year TCO calculator usually shows a much larger total advantage than this 10-year snapshot alone, and the 25-year lifetime savings calculator in our savings and payback section covers the same widening-gap math from a residential-scale angle. Incentives change the budget a lot. The federal tax credit calculator in our Rebates & Incentives section can help you estimate the federal credit and rebates before you commit.

What this calculator doesn't account for

This model doesn't include MACRS depreciation tax savings or financing interest if you're using a loan instead of cash. For the tax-adjusted view, pair this with the payback calculator, which builds in year-one depreciation benefits directly, and the Department of Energy's guide to going solar for the broader cost and savings factors this comparison is built from. If demand charges are a big part of your bill, the battery charge time from solar calculator in our Battery & Storage section can show whether a battery would shave your peak enough to pay for itself.

Questions

Frequently asked

Most businesses save $50,000 to $150,000 over 10 years per 150 kW installed, once the net system cost and ongoing O&M are weighed against 10 years of rising utility bills. A 150 kW system with a $163,000 net cost saves about $84,571 over 10 years compared to buying the same electricity from the grid at $0.11/kWh with 2.5% annual escalation.

This is called the crossover year, the point where cumulative solar ownership cost drops below cumulative grid-only cost. In the example above, that happens in year 7. After that point every additional year adds to your savings instead of closing the gap.

It includes the federal ITC and any rebate you enter, applied to the upfront system cost. It doesn't include MACRS depreciation tax savings, which would shrink your net cost further and move the crossover year earlier. Run the commercial solar payback calculator for a figure that includes depreciation.

A lower escalation rate pushes the crossover year later and reduces 10-year savings, since the grid-only path costs less than projected. Try running this tool with a 1% or 1.5% escalation rate as a conservative check alongside your original estimate.

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Commercial solar payback calculator Commercial solar ROI calculator Commercial solar NPV calculator Commercial solar IRR calculator Commercial solar 25-year TCO calculator Commercial ITC calculator Demand charge reduction estimator All commercial & small business tools