7 Mistakes Commercial Property Owners Make When Going Solar
Commercial solar is a significant capital investment with a 25-year time horizon. The decisions made in the first few months — before a contract is signed — determine whether the project delivers on its financial promise or becomes a source of ongoing frustration. After reviewing hundreds of commercial solar projects, these are the seven mistakes we see most often.
Mistake 1: Talking to Only One Installer
The most common and most costly mistake is engaging a single installer and treating their proposal as the market. Commercial solar pricing varies by 20–40% between installers for the same project. Without competitive bids, there is no way to know whether you are paying a fair price — and no leverage to negotiate.
The installer who finds you first — through a referral, a cold call, or a trade show — has a significant advantage if you do not run a competitive process. Their proposal becomes the reference point for all subsequent conversations, even if it is overpriced.
Mistake 2: Evaluating Proposals Without a Defined Scope
Comparing proposals from multiple installers is only useful if they are bidding the same scope of work. Without a defined specification — system size, equipment standards, interconnection approach, monitoring requirements, warranty terms — each installer will bid a different project. The lowest number will often reflect the most incomplete scope, not the best value.
Scope gaps are the primary source of change orders on commercial solar projects. Items that are not explicitly included in the contract — roof repairs, electrical panel upgrades, permit fees, utility interconnection costs — will be added back at higher unit costs once the project is underway.
Mistake 3: Accepting the Installer's Financial Model Without Review
Installer financial models are marketing tools. They are built to make the project look attractive, and they routinely use aggressive electricity rate escalation assumptions, optimistic production estimates, and incomplete incentive modeling. Accepting these numbers without independent review is equivalent to accepting a contractor's cost estimate without getting a second opinion.
The most common errors we find in installer financial models: electricity rate escalation of 5–6% when historical rates in the territory support 2–3%; production estimates that do not account for shading or soiling; and failure to model the ITC-depreciation basis adjustment correctly.
Mistake 4: Ignoring the Roof
A solar system installed on a roof with 5 years of remaining life will need to be removed and reinstalled when the roof is replaced — at a cost of $30,000 to $80,000 or more for a commercial system. This cost is almost never mentioned in installer proposals, and it can eliminate years of projected savings.
Before committing to a rooftop solar installation, get an independent roof assessment from a licensed roofing contractor. If the roof has less than 15 years of remaining life, either replace it before installing solar or evaluate ground-mount and carport alternatives.
Mistake 5: Underestimating the Interconnection Timeline
Utility interconnection is the most common source of project delays on commercial solar installations. In some utility territories and at some voltage levels, interconnection queues can add 6 to 18 months to a project timeline. Installers frequently understate this timeline in their proposals because a longer timeline makes the project less attractive.
If your project timeline is driven by a specific financial event — a tax year-end, a lease renewal, a capital budget cycle — understand the interconnection timeline before committing. A project that misses its target commissioning date by six months can have significant financial consequences.
Mistake 6: Not Understanding What You Are Signing
Commercial solar contracts are long, complex documents that contain provisions most buyers do not read carefully. Common issues include: change order clauses that give the installer broad discretion to add costs; warranty terms that are narrower than the installer's verbal representations; interconnection delay provisions that shift risk to the buyer; and PPA escalation rates that are buried in schedules rather than prominently disclosed.
Have any commercial solar contract reviewed by an attorney with energy project experience before signing. The cost of a contract review is trivial relative to the value of the contract.
Mistake 7: Going It Alone
The commercial solar market is not designed to serve buyers. It is designed to serve installers. The information asymmetry between an experienced installer and a first-time commercial solar buyer is substantial. Buyers who navigate the process without independent expertise consistently pay more, get worse contract terms, and experience more post-installation problems than those who engage independent advisory.
An independent solar advisor costs a fraction of what a poorly structured project costs — and pays for itself many times over in better pricing, better contracts, and avoided mistakes.
Avoid these mistakes on your project
We represent commercial buyers through every stage of the solar process — from scope definition and competitive bidding through contract negotiation and construction oversight. No installer commissions, no conflicts of interest.
The San Diego Solar Buyer's Checklist
Before you sign anything, read this. Our independent advisors put together the exact questions and red flags every property owner should know, completely free.
- Questions to ask every installer before signing
- How to spot inflated system size estimates
- What NEM 3.0 means for your payback period
- Red flags in financing and PPA agreements
- How to run a competitive bid process
- What independent consultants check that installers won't
- Key incentives available in California right now
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