Key Takeaways
Why are commercial electricity prices increasing, and can batteries help? The rapid growth of AI data centers is increasing electricity demand and driving higher commercial utility rates across the U.S. Businesses can reduce long-term energy costs by pairing commercial solar with battery storage, allowing them to offset rising rates, lower demand charges, store low-cost solar energy for peak pricing periods, and take advantage of commercial battery incentives that remain available through 2032.
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Over the last few years, electricity prices have been skyrocketing in both residential and commercial markets. While many factors drive this increase in demand, one of the core drivers behind these increases is data centers. Now more than ever, residences and businesses are looking for ways to reduce their bottom line and cut costs where possible.
Solar has long helped mitigate rising energy prices by being one of the lowest-cost energy sources, and now commercial batteries are entering the mix to improve the economics further.
So let’s examine commercial price increases and how businesses can reduce their energy overhead.
Table of Contents
The Rise of AI Datacenters
Contrary to popular belief, datacenters are not a new development in the US. They’ve long been utilized by big tech companies to power anything needing computing power or the internet. But the rise of AI services like ChatGPT, Claude, Gemini, and others over the last 2 years has dramatically increased the need for additional data centers and energy.
According to Cleanview, the US currently has 1,208 operating data centers with another 1,703 planned and in development.
That much planned development comes with significant energy needs and infrastructure upgrades to match. Which in turn leads to the increases we’re seeing in energy prices.
PJM, a Regional Transmission Organization that oversees wholesale electricity movement in much of the eastern US, recently announced its latest auction results, where $16.4 billion in total capacity market charges will be added, $6.3 billion of that coming from AI data centers.
Prices Increasing Everywhere
Unfortunately, this trend is not limited to one area. The C&I space has seen significant price hikes in multiple territories. According to data from Ohm Analytics, Duke Energy Carolinas has an ongoing rate increase request, and as of July 2026, a new settlement would see average residential monthly bills increase by 8-9% and C&I by 7-7.5% by 2028.
In Maryland, Baltimore Gas & Electric (BGE) filed a rate case request that, if approved, would increase residential monthly bills by roughly 4% and C&I bills by roughly 1%.
These are just two examples of an ongoing energy problem, and the messaging is clear – increased demand is driving up capacity charge prices across the board. So what can businesses do to reduce the effects of this issue?
Enter Solar
To meet new energy demands, grids, businesses, and homes need more energy quickly. The solution to meet this demand has been and will continue to be solar. Solar is one of the lowest-cost forms of energy to deploy and can be deployed more quickly than most other forms of energy.
Not to mention, an investment in solar can secure a business’s energy future for 30+ years. When properly planned for, a solar investment can have very low maintenance costs over time. According to research from a Rewriting America report published in Forbes, solar, battery, and heat pumps could meet 100% of the projected AI datacenter demand growth through 2029.
While that report focuses a lot of its thought on residential solar being a hedge against growing prices, the same can be applied to commercial solar. Commercial solar can be either bought outright or designed with predictable monthly payments that are lower than utility bills, creating a financial hedge.
And what commercial solar has going for it that residential does not is access to a federal tax credit to help lower costs. Although that tax credit expires at the end of 2027 without policy reform.
Batteries Refine the Economics
Solar alone is a great hedge for energy prices, but as utility policies change, the opportunity arises for battery storage to become an even bigger part of the equation.
Many utilities across the country are moving away from net metering and flat-rate energy prices into a structure that does not compensate solar owners for sending power back to the grid and one where prices vary throughout the day.
Many commercial electric bills include something called a “capacity charge”. A capacity charge is a line item that adds a fee to an electric bill based on the highest amount of power drawn during a given time period. These fees can be substantial depending on the type of building and operations within it.
With battery storage, commercial solar owners would be able to store generated solar energy, then discharge when prices or demand are the highest. By doing this, they can further reduce costs and make their solar investment even more profitable.
Many of the largest battery manufacturers are moving into the commercial space. Names like Tesla, Enphase, and SolarEdge all have lines of commercial batteries.
Commercial Battery Incentives
Commercial battery systems do still qualify for several incentives, and more programs are popping up around the country.
Commercial batteries qualify for the 48E federal tax credit and 100% bonus depreciation in the first year. Unlike solar, battery storage will have until 2032 before the 48E tax credit expires.
Virtual Power Plant (VPP) programs are also beginning to emerge in the commercial space. Under these programs, commercial battery owners can elect to have the utility discharge a portion of their stored electricity a designed number of times per year in exchange for compensation.
Protection for Commercial Systems
Like residential arrays, commercial solar energy systems are made up of some complex components that will eventually fail over their 30+ year operating lifespan. While manufacturer warranties can replace parts, those warranties often exclude labor, leaving costly repairs to either be absorbed by installers or charged to end-users.
If a commercial solar energy system is being installed, the best way to protect the investment is by including SI-commercial. SI-commercial is an independent warranty from Solar Insure that covers critical components and labor costs. Panels are covered for 30 years, and inverters are covered for 20 years, giving asset owners long-term peace of mind.
Solutions for the Future
While the immediate outlook for rising energy costs seems high, we have the solutions to mitigate issues and reduce the risk we all face. As technology continues to develop and markets shift, solar + battery storage will likely reduce energy risks across all sectors.
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