Reevaluating the Costs and Benefits of Installing Electrical Subpanels in Commercial Buildings

Installing additional electrical subpanels in commercial buildings is an important upgrade that building owners and facility managers should consider. As buildings age or tenant needs change, the existing electrical system may not be adequate. Reevaluating the costs and benefits of installing subpanels can help determine if it makes financial sense.

Why Commercial Buildings May Need Subpanels

There are a few key reasons why commercial buildings often require electrical subpanel upgrades:

• Increased power demands - If additional lighting, equipment, or appliances are added, the existing panel may not have enough capacity. Subpanels help provide more circuits and power availability.

• Renovations and reconfigurations - When the layout or use of a space changes, new receptacle and lighting circuits are usually needed. A subpanel allows for expanding circuits more easily.

• Old or outdated electrical panels - Panel capacity, circuit breakers, and wiring may be inadequate with older electrical systems. Upgrading panels and adding subpanels brings the system up to current code.

• Tenant improvements - As new tenants move in, renovations are frequently done. Subpanels enable powering added lighting and outlets without replacing the main panel.

Cost Factors for Electrical Subpanel Installation

Installing a new electrical subpanel represents a significant investment. The costs typically include:

• Electrician labor - The bulk of the cost is labor to install the subpanel, provide the wiring connections, pull wires, and make the new circuits operational.

• Materials - The panel enclosure, circuit breakers, wires, conduit, and other materials can easily cost $1500+ for parts.

• Permits - If required, permitting and inspections from the city or county can cost a few hundred dollars.

• Service upgrade fees - Sometimes the utility company charges fees to upgrade electrical service to the building if required.

• Lost rent revenue - For tenant space buildouts, loss of rent during construction is a consideration.

• Design fees - For larger projects, hiring an electrical engineer to design the system adds cost.

Key Benefits of Adding Electrical Subpanels

While installing subpanels clearly entails considerable expense, there are significant benefits in return:

• Increased tenant satisfaction - More available power enables tenants to plug in devices and equipment without issues.

• Higher rental rates - Updated electrical capacity enables commanding higher rents per square foot.

• Improved safety - Upgrading panels and wiring reduces the risk of overloaded circuits and potential fires.

• Higher property value - Enhanced electrical systems and capacity equate to higher building value.

• Reduced future costs - Proactive upgrades decrease the likelihood of much larger emergency repairs down the road.

• Flexible space - Subpanels allow easily reconfiguring electrical circuits when remodeling tenant spaces.

• Energy efficiency - New panels allow integrating lighting occupancy sensors and other energy saving features.

Key Considerations When Planning a Subpanel Installation

Here are some important factors to weigh when deciding on upgrading with new subpanels:

• Evaluate current and future electrical loads - A professional assessment will determine if an upgrade is warranted.

• Determine if the main panel needs upgrading - Sometimes the existing main panel must be replaced first.

• Include capacity for future growth and changes - Don't just meet the bare minimum requirements.

• Compare installing one large subpanel versus multiple smaller ones - Location and distribution are key.

• Determine if higher voltage 208V or 480V power is needed - Special equipment may require it.

• Examine impact on electrical service bill - Higher capacity equals higher costs.

• Review options for reducing project costs - Justify alternatives like lower-capacity panels or fewer circuits.

• Develop an implementation plan with the electrical contractor - Minimize business disruptions.

Conclusion

Installing new electrical subpanels involves considerable expense for parts, labor, permits, and lost business. However, the benefits of increased capacity, safety, flexibility for future changes, and higher building value are worth the investment. Thorough planning, smart design, and strategic budgeting can help optimize costs and maximize benefits. With careful reevaluation of needs, building owners can make informed, cost-effective decisions on electrical upgrades.