Residential solar makes little sense compared to larger forms of solar energy such as utility-scale solar (building solar farms in non-urban areas) and commercial solar (solar panels on the roof of commercial buildings). The economics are inferior for various reasons:
- Economies of scale in labour costs (engineering, installation) and in equipment costs.
- Larger scale solar tends to place solar panels in areas with the best sunlight conditions and other economic factors. Some residential roofs are obscured by trees or are not strong enough to support solar panels. There are some frictional costs when people waste time figuring out that a particular residential roof is not a good place to place solar panels on (e.g. customer service, engineering).
Larger scale solar projects have inherent advantages over residential solar.