Solar for business: The ultimate guide to energy savings

  • Carbon Reduction
  • Renewable Energy
  • Jun 21, 2024
  • On average, solar on a commercial building can cost anything from £16,000 (20kW) to £60,000 for a 50kW system and beyond. These are the typical sizes for SMEs (small to medium-sized businesses).
  • Why get solar? Reduced costs and energy independence are the main benefits of solar panels for businesses.
  • With some clever tactics, commercial solar panels can pay back in 4 or 5 years. The more you use (EV charging, batteries, shifting your operations) the faster the payback.
  • Not all panels produce the same amount of energy. The best names in solar panels include LG, Sharp, SunPower, Panasonic, and Yingli Solar..

Solar works for many businesses. Businesses are more likely to be consuming energy in the daytime. This works with solar, as the more you can use directly, the better the cost-savings from installing solar.

Try our carbon reduction plan generator to get an accurate understanding of your roof’s potential and payback based on your typical use patterns. If you know that you want solar and how much you should get, we can help you compare the best offers on the market. Don’t spend precious time doing research to find a reliable installer on your own, we provide multiple offers so you can compare quotes.

Receive up to 4 free, non-binding quotes from commercial solar panel installers in your area. Our service is free, impartial and there’s no obligation, so use Gopher Zero to get started now.

  • Why use solar for your businesses?
  • How much do commercial solar panels cost?
  • Are there grants for solar panels on commercial buildings?
  • What are the benefits of commercial solar PV?
  • Are there disadvantages of commercial solar installation?
  • What about solar if I have a landlord?
  • FAQ

Why use solar panels for businesses?

Commercial solar panel installation can bring many benefits:

  • Over the 25-year lifetime of solar panels, savings can add up to thousands of pounds. A 20kW system can potentially save your business over £3,000 annually on your electricity bills.
  • Solar panels start you off on energy independence, and protect you from fluctuating electricity prices. They don’t generally gice you a backup when there is a power cut, but you can install a (pricey) solar battery to give you complete control. 
  • If you operate industrial solar panels, you can sell excess energy – but you don’t want to do this, as it’s much better to put it to use onsite (eg. charging employee’s electric cars).
  • By switching to solar panels for your business, you are lowering your carbon footprint and this means lower scope 2 emissions – so you could get better credit terms and impress bigger customers.
  • Having a visible solar system on your roof tells your customers where you stand. Switching shows your business is committed to green and sustainable practices and reducing energy waste.

How much do commercial solar panels cost?

On average, commercial solar panels cost anything from £16,000 to £70,000 for small to medium-sized businesses. The cost depends on roof size, the location of your electricity meter, whether you add a battery, the equipment needed if there are grid constraints in your area, and where in the UK you are based. 

On average, small SMEs use 30,000-50,000kWh of electricity each year. That’s at least as much as 10 houses. No wonder it is costing you a fortune.

If you have a smart meter, you can connect for free using our carbon reduction plan generator to see exactly when you are using most energy. Even if you don’t, we have a few questions to determine a typical day’s energy use at your premises. 

A general breakdown of the cost of commercial solar panels can be seen below, excluding VAT.

System sizeAverage costPay
10kW£13,000 – £15,000Payback ?
20kW£16,000 – £30,000Payback ?
50kW£33,000 – £60,000Payback ?
60kW£39,000 – £75,000Payback ?
80kW£50,000 – £100,000Payback ?
100kW£60,000 – £120,000Payback ?

Payback doesn’t depend on what you spend on your system, but on how well matched it is to your use.

Since April 2022, VAT has been reduced to 0% for certain energy-saving products, which includes solar panels and their installation. The reduced VAT rate applies for five years, making investing in solar before 2027 a great idea. 

In the UK, you can claim capital allowance when you buy energy efficient, or low or zero-carbon technology for your business. This reduces the amount of tax you pay. This applies to having commercial solar panels installed. 

What are the installation costs?

When installing a solar panel system for your business, the main things you are paying for are the panels and the inverters. If you are installing a very large solar panel system, the installation costs may rise slightly, especially if it takes more time to carry out the installation.

Do you need a battery? Many installers are keen to sell you a battery to store excess solar. The chances are you could actually be increasing your payback time. It’s better to look for ways to maximise your use of solar during the day time. 

The rule of thumb for installation costs of commercial solar panels is to calculate 0.2p per Watt fitted. Large commercial systems could be cheaper depending on the economies of scale.

Prices can also depend on the brand. Not all panels produce the same amount of energy. And premium commercial solar companies like SunPower can be more expensive per kW than cheaper alternatives. Once the initial installation costs are covered, though, there are very few additional costs. Solar panels don’t require regular check-ups, just an annual clean with water if the rain hasn’t done that already!

How can I increase the RoI of my solar panels?

Basically, anything you do that means you use more solar energy (rather than exporting it to the grid), will improve your return on investment. When we say ‘use more solar’ we just mean timing your energy use to coincide with peak daylight hours. We’ve got 10 top tips to improve your solar return on investment.

Do you need planning permission?

In most cases, you don’t need to obtain planning permissions before installing commercial solar panels. The contracting company completing the installation will know the rules and may be willing to sort out these permissions on your behalf.

Some regions require planning permission for installing solar panels on flat roofs, especially if they are set at an angle. If your building or property site is designated as historical or part of a world heritage site, you will need permission.

There are many qualified installation companies across the UK, but they are busy. Finding the right one can take days of research and calling or emailing. Fill in our 30-second form to connectwith up to 4 different vetted installers in a flash.

Each installer will be able to help you with several things:

  • Identifying if you need planning permission
  • Providing you with a competitive quote tailored to your energy demands
  • Installing your new solar panel system.

Grants for solar panels on commercial buildings

Can businesses get free solar panels? Currently, there is a complex landscape of local grants for solar panels on commercial buildings. If you don’t live in an area with a grant, remember that the UK government has set 0% VAT on goods like solar panels and sustainable technologies, which can save purchase costs immensely.

The Smart Export Guarantee (SEG) means businesses can gain from exporting excess energy back to the national grid. The price is generally around 4.1p/kWh. To be eligible, you must have a smart meter to measure the power exported.

The best way to find out what incentives there are in your area is to ask a reliable solar panel installer. Fill out a simple, 30-second form and we’ll get back to you with up to 4.

Financial Savings

The SEG allows suppliers to set the price for the energy they purchase. Rates may vary, expect them to mimic wholesale and market prices. Octopus Business Energy have been offering up to 15p/kWh following the energy crisis, but as prices start to fall you can expect to get less than 5p/kWh.

What are the benefits of commercial solar PV?

There are many advantages of solar energy, such as cost, efficiency, and income potential. Below, we break down the 3 key advantages of using solar panels for your business.

1. Reduced Energy Costs

Energy from commercial solar PV panels will cost a fraction of what you were paying now. While saving a few pence per kWh may sound small, but coming out of the energy crisis, we know it quickly adds up.

2. Avoid price hikes

Once you’ve paid for the installation, you’ve effectively booked a significant proportion of your energy costs for the next 25 years. 

3. Lower Carbon

The benefits are reputational, but also more tangible. If you have a carbon reduction plan, you can lower your reported Scope 2 emissions.

What are the disadvantages of commercial solar installation?

As with most things, commercial solar installation has its disadvantages that are worth keeping in mind.

1. High Initial Investment

Despite a huge price drop in the last decade, solar still has a high initial cost. Return could be longer than the cheapest credit terms. But experts expect this to be the lowest price we’ll pay for solar, as trading with China may hit some geopolitical bumps. 

2. Weather Dependency

Solar panels are weather-dependent, clouds, snowfall and  extreme heat all decrease energy production. Good news for UK businesses as solar panels will still produce a good amount of energy with indirect sunlight. On very overcast days, solar panels can produce about 10-25% of their maximum output on a clear, sunny day. 

3. Grid queues

Grid queues for connecting solar in the UK refer to the waiting list of applications from renewable energy projects, such as solar farms, seeking to connect to the national electricity grid. In some of the worst affected areas, this may impact even commercial-sized installations. The good news, is that you can disconnect your panels from the grid, if needed, using a fairly standard bit of kit.

What are the best commercial solar panel companies?

There are various factors to consider when choosing the best solar panel companies. Criteria should include the type, power, efficiency, power tolerance, size, and product warranty. Six of the best commercial solar companies include:

  • LG
  • Sharp
  • Sunpower
  • Panasonic
  • Yingli Solar

Inverters are maybe more important to make a good investment. Top considerations when choosing solar inverters for your business:

  • Solar Inverter Manufacturer’s Reputation. 
  • Power Supply and Inverter Capacity.
  • Warranty and Service Network. 
  • Monitoring Platform. 
  • Cost.