While industry giants such as Target, Walmart, and Prologis are putting their massive rooftops to work with on-site solar panels, companies with smaller footprints ask, ‘Can we do this, too?’

“Smaller firms face challenges due to less financial wherewithal, less space to host panels and lack of economies of scale,” Thomas says. “Having state and local incentives will continue to play a significant role in project financial viability.”

Thomas added that several firms elect to pay a green premium for renewable projects because meeting sustainability goals can be as important or more important than just the project economics.

“State and local incentives drive the market, which often raises questions such as why we see more distributed generation solar projects in places such as New Jersey, Massachusetts, and Washington DC, than in parts of the Sunbelt where there is more abundant sunshine.” Thomas continues. “But it’s because of incentives and the regulatory environment that impact where deals are getting done.”

For example, New Jersey, Massachusetts, Illinois and Washington, DC, have incentives that make solar development attractive.

“Sustainability goals, technology improvements, governmental incentives and stakeholder pressure will continue to create demand for on-site renewables,” Thomas says. “However, if executing a project was simple, we would simply see more solar panels installed. The challenges center around developing economic projects while navigating the regulatory and utility landscape.”