Commercial Fire Alarm System Installation Cost [2023 Estimates]

Commercial fire alarm systems are a common necessity to meet building code requirements, but most importantly, to ensure the safety of businesses and their employees. As a business or property owner, it is your responsibility to install and maintain a proper fire alarm system in your building to ensure the safety of everyone inside.

While keeping employees safe is a no brainer, something like installing or upgrading a commercial fire alarm system can sound expensive. As a dealer and installer of commercial fire alarm systems, we are commonly faced with small business owners who are looking to add or upgrade their fire alarm system, who are concerned about code compliance, what is required/recommended, and how much a commercial fire alarm system installation will cost.

In this article, we will be covering the core components of a commercial fire system, installation and equipment cost, and recurring cost of maintaining your system.

The Basics of a Commercial Fire Alarm System

A commercial fire alarm system notifies and protects the building occupants, limits damage, and signals the fire department when fire and smoke is detected. According to the Nation Fire Protection Association (NFPA) Fire Loss Report, in 2021 there were 486,500 structural fires resulting in 3,010 deaths, 12,600 personal injuries and $12.6 billion dollars of property damage. These numbers would be considerably higher if it were not for fire alarm systems that are widely used and often required by building codes. These numbers also remind us of the ever-present danger of building fires and their destruction.

Basic Code Requirements

While a commercial fire alarm system will add to the cost of a building, it is a necessary and prudent precaution. In most multi-tenant buildings, a commercial fire system is required by the building code. The building code does not require commercial fire alarm systems for smaller single tenant commercial buildings because there is less potential of personal injury caused by being trapped unknowingly by a fire, but the potential for property damage is no less. Most insurance companies recognize how a commercial fire system limits their exposure in the rates they charge. It is not unusual to pay 50% more for property insurance in a building that does not have a commercial fire alarm system. This saving not only shows the value of a commercial fire alarm, but the saving should be calculated when considering the total cost.

Commercial building code requirements differ for each state so it is generally best to consult a professional to ensure your current or new system will meet all standards.

The Core Types of Commercial Fire Alarm Systems

There are plenty of different components to properly equip buildings to alert and evacuate occupants quickly, but the first choice business owners need to make is between a sprinkler or non-sprinkler fire system.

Systems with Fire Sprinkler System

A fire sprinkler system is the most effective fire protection because the sprinkler heads not only detect heat from a fire but also put the fire out. The current building codes require a fire sprinkler system for most multi-tenant commercial buildings and larger single tenant buildings. Having a fire sprinkler system will greatly reduce the cost of the fire alarm system because most of the expense of protecting the building is in the fire sprinkler system.

In these cases, the fire alarm system is used to monitor the fire sprinkler system. A flow switch is placed on the main pipe feeding the sprinkler system and hooked up to the fire control panel. When a sprinkler head is activated and starts spraying water from any place in the building the flow switch trips sending signals to the dispatch center where calls are made to building management and the fire department. The commercial fire alarm system also monitors the troubles condition on the sprinkler system such as gate valves being inadvertently shut off, low temperature sensors, and high- and low-pressure switches.

The fire alarm system in a sprinklered building usually includes a smoke or heat detector above the fire panel, a pull station by the panel, duct detectors, and notification devices. A commercial fire alarm system for a building with a fire sprinkler system will cost between $4,000 and $8,000 for equipment and installation. Additional costs will accumulate based on the number of notification devices (about $150 – $200 each) and duct detector hook ups (about $150 – $200 each) that need to be a part of installation. Usually most of the cost for a commercial fire alarm system is where there is a fire sprinkler system in the building is borne in the initial items needed. A 1,000 SF build will cost you about the same as 50,000 SF building for the fire alarm system if the building is covered with a fire sprinkler system.

Systems without Fire Sprinkler System

In cases where a building does not have a fire sprinkler system, the cost of a fire alarm system will be more expensive because initiating devices will need to be placed throughout the building and more notifying devices are usually required. Not having a fire sprinkler system means the fire will continue to rage until the fire department shows up so there is typically more property damage and more need to notify occupants. The size of the building will also have a larger impact on the cost of fire alarm systems. The cost will be $1 to $2 per square foot for newer clean installations with drop ceiling access and as much as $5 to $7 per square foot on older and more difficult installations requiring surface molding with limited access. Also, a factor in the cost is the coverage area. If the required coverage area is just the common areas and corridors, this decreases the cost per square foot.

Components of a Commercial Fire System

Fire Alarm Control Panel (FACP) – This is the main brain of the fire system and consists of an electronic circuit board mounted inside a heavy-duty red metal box (cabinet.) The circuit board has screw down terminals for the connection to various devices that will be a part of the fire alarm system. The control panel is powered by a direct 110v connection and has room inside and connections for battery backup. The FACP usually has a built-in digital communicator and annunciator.

Digital Alarm Communicator Transmitter (DACT) – This is the device that transmits panel alarms and troubles to a dispatch center. Most FACP have two plain old telephone service lines (POTS Lines) DACTS built in because traditionally fire alarms transmitted over two POTS lines. POTS lines are no longer reliable enough for new system installations. Most new installations require a Internet and cellular DACT to transmit signals and many of these DACTS are designed to hook up to the POTS connections on FACPs. Fire alarm DACT requires two paths of communications and a cellular communicator can provide both of these paths without an internet connection.

Fire Alarm Annunciator (FAA) – Annunciators are keypads where the fire system can be controlled. There is usually an FAA built into the FACP but there can be remote annunciators, so these controls are more readily available. The FAA allows the system to be silenced and reset, displays panel conditions, and provides interface for programming the system.

Fire Sprinkler System – This consists of water piping throughout the building with sprinkler heads that come off this system and are placed in a grid formation throughout the building. The system is then pressurized with water. The sprinkler heads have a glass tube filled with a liquid that will cause the glass to break when the temperature reaches 132 to 155 degrees sending a spray of water down on the area below the sprinkler head that quenches the fire.

Notification Appliance Circuit (NAC) – This is a power supply designed to supervise and provide power to notification devices. An NAC is added to a system when the FACP does not have enough power to run the necessary notifying device.

Initiating Devices – These are devices that are wired to the FACP that detect a fire and initiate a fire alarm. They include smoke detectors, heat sensors, flow valves on a fire sprinkler system, pressure switch on a dry sprinkler system, pull stations, and photo beams.

Signaling Devices – These are devices that are wired to the FACP and signal a trouble on the system. They include low temperature sensors, shut off valves on a fire sprinkler system (gate valves), smoke detectors in HVAC units (duct detectors), CO detectors and low- and high-pressure switches.

Notification Devices – These are devices that are wired to the FACP and notify occupants of the building that there is a fire condition in the building. They include various types of bells, sirens, horns, and strobes.

Dispatch Center – This is a manned 24-hour facility that receives alarm and trouble signals from the FACP via a DACT and makes calls to dispatch the appropriate service company and fire department and notify building owners and management of a potential fire issue in their building.

Reoccurring Costs of a Commercial Fire Alarm System

Aside from installation and equipment costs, there are a few reoccurring costs to consider for your fire system. In general, these will consist of system testing, dispatch/monitoring services, and maintaining any certifications.


Most commercial fire systems are required to be tested annually. Testing includes setting off all the initiating and signaling devices to make sure they are working, verifying that notification devices are visually and audibly working, periodically replacing back up batteries, and visually verifying that annunciators and other indicators are working properly. Depending on the size of the system this can take as much as 4-5 hours, but most systems can be tested in 1-2 hours. This testing is different from the fire sprinkler system that needs to be tested annually by the sprinkler system vendor. You can expect testing costs to range from $200 to $800 annually.

Dispatch Services

In addition to testing, there is a monthly, quarterly, or annual fee (depending on your alarm company) that is paid for the 24-hour dispatching services. Sometimes the alarm company will require multi-year contracts for this service. These contracts protect both the alarm company and the customer, assuring that this critical service is up and working. The fee not only includes the dispatching services but also includes the necessary communication services needed to get the signal to the dispatch center such as cellular or internet providers and/or facilities. The cost of this annual monitoring can be as low as $495 or as high as $1295 annually. This variability is dependent on whether the system is UL certified and if the communications path is available on site. In general, having an internet connection available for the fire system will save on the cost of monitoring services.

UL Certification of Commercial Fire Alarm Systems

Some cities require commercial fire alarm systems to be UL certified. UL certification means the alarm company has certified with UL that the fire alarm system they have installed meets all NFPA and NEC codes for installation and monitoring of the system. All fire systems should meet these code requirements regardless, but the UL certification process gives UL the right to review the installation components, the installation itself and the records of dispatching to ensure the fire alarm system complies. Alarm dealers pay an annual fee, a fee per UL certified system, and subject themselves to annual review of records and random site inspections. These fees increase the cost of the monitoring and testing in the cities where UL certification is required.

Taking the Next Step

There are many factors that affect the cost of a commercial fire alarm system, and this blog is just a summary of some of the tops factors to consider. If you are looking to move forward, we always recommend consulting a professional about the details of your fire alarm system requirements so you can install the best commercial fire alarm system for your building.

If you happen to be located near Eagan, Minnesota, make sure to contact our team at Prowire! Not only will be able to educate you on code requirements, but we will work with you to find the best solution for your business.

When you work with Prowire, you work with a team who is concerned about protecting people and property. Installing and servicing commercial fire alarm systems is a significant part of our business. We are registered with the UL making us capable to certify fire alarm systems through the UL certification process if your live in a “UL City.” Prowire installs and services Honeywell, Vista and Firelite Panels and a variety of devices from manufactures like System Sensors, Gentex, Silent Knight, Hochiki, and Altronix. We can discuss your fire alarm project, give you some specific options and prices, show you how to save money on the installation and monitoring, and implement upgrades or a new system on your behalf. Give Prowire a call or contact us online so we can help with your commercial fire alarm system.