SOLAR GUIDE
Commercial Solar Panels 2026: Cut Your Business Energy Bills
Commercial solar panels typically cost £15,000 to £100,000+ depending on system size, and most UK businesses see payback within 4 to 7 years.
Commercial solar panels typically cost £15,000 to £100,000+ depending on system size, and most UK businesses see payback within 4 to 7 years.
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Commercial solar panels typically cost £15,000 to £100,000+ depending on system size, and most UK businesses see payback within 4 to 7 years. A 50kW rooftop system on a warehouse or office can cut electricity bills by 50% to 70%, with surplus power sold back to the grid. There's no direct government grant for commercial solar, but capital allowances and business rates relief make the numbers work faster than most owners expect.
A cold storage warehouse running compressors around the clock. A primary school that's empty for six weeks every summer. Same 50kW system on the roof, completely different savings. That contrast is the thing most commercial solar guides gloss over.
The metric that actually determines your return isn't system size or panel count, it's your self-consumption ratio: the percentage of generated electricity you use on site rather than exporting. For most commercial buildings, that sits between 50% and 80%.
So what does that look like in real money?
A 30kW system on a small office block generates around 27,000 kWh per year. At current commercial electricity rates of roughly 24p to 30p per kWh, that offsets £6,500 to £8,100 of your annual bill. Scale up to a 100kW system on a factory roof generating 85,000 to 95,000 kWh and you're looking at £20,000 to £28,000 per year in avoided electricity costs.
Those numbers assume you're using most of the power yourself. Export what you don't use and you'll earn far less, typically 5p to 7p per kWh through a Power Purchase Agreement or the Smart Export Guarantee. A fraction of what you'd save by consuming it on site, which is why sizing matters so much. We'll come back to that.
One pattern we see constantly: businesses underestimate savings because they're comparing against last year's energy contract rather than projecting forward. Commercial electricity prices have risen roughly 40% since 2021 according to Ofgem data, and while wholesale prices have stabilised somewhat, nobody credible is predicting a return to pre-2021 levels. Solar locks in a portion of your energy cost at effectively zero pence per unit for 25+ years. That hedge against future price rises is arguably worth as much as the immediate bill reduction.
Bigger isn't always better. That's the counterintuitive bit.
The instinct is to cover every square metre of roof with panels. But if your business only operates Monday to Friday, 9 to 5, a massive system will generate huge amounts of weekend electricity you can't use and can only sell at export rates. You'd have been better off with a smaller, smarter system that actually matches your consumption profile.
Here's a rough guide by business type:
| Business type | Typical system size | Annual generation | Approximate cost |
|---|---|---|---|
| Small office / retail unit | 10–20 kW | 9,000–18,000 kWh | £12,000–£25,000 |
| Medium warehouse / workshop | 30–50 kW | 27,000–45,000 kWh | £30,000–£55,000 |
| Large industrial / distribution | 100–250 kW | 85,000–225,000 kWh | £80,000–£200,000+ |
| Agricultural (farm buildings) | 30–100 kW | 27,000–90,000 kWh | £30,000–£90,000 |
Those costs include installation, scaffolding, grid connection, and VAT at 20% (commercial installations don't get the 0% VAT rate that domestic ones do, which remains a sore point).
A good installer will ask for 12 months of half-hourly electricity data before recommending a system size. If they quote you based on roof area alone without looking at your consumption data? Find a different installer.
What about battery storage? It's starting to make commercial sense, particularly for businesses with time-of-use tariffs or high evening demand. But the economics are tighter than for the panels themselves, and payback on batteries alone is still 8 to 12 years for most commercial setups. If you're curious about how storage economics work at the domestic level, our guide to solar battery storage covers the principles, though commercial pricing differs.
£50,000 on a roof. That's what a mid-range commercial system costs.
Here's the honest bit: commercial solar is one of the clearest financial decisions in energy right now, far clearer than domestic solar in many cases. The reason is scale. Per-kilowatt installation costs drop significantly as system size increases: a 10kW domestic system might cost £1,500 per kW installed, while a 100kW commercial system often comes in at £800 to £1,000 per kW. Same panels, but the fixed costs (scaffolding, inverters, grid connection paperwork) get spread across more capacity.
The 25-year financial picture for a typical 50kW office system:
Upfront cost. £45,000 to £55,000 installed.
Annual savings. £10,000 to £14,000 in avoided electricity, plus £500 to £800 in export income.
Maintenance. £300 to £500 per year for cleaning and inverter checks. Budget for one inverter replacement around year 12 to 15, roughly £2,000 to £4,000.
Total 25-year value. £250,000 to £370,000 in savings against a system that cost £50,000. Even accounting for panel degradation (about 0.5% per year) and maintenance, the return is strong.
And that's before tax relief.
For comparison, insulation and glazing upgrades can also reduce commercial energy costs significantly, we've covered wall insulation options and window grants for domestic properties, and many of the same principles apply to commercial buildings, though the funding routes differ.
Right, so here's where commercial solar diverges sharply from the domestic side. If you're a homeowner, there are several grant schemes that can reduce or eliminate solar costs, as we've covered in our solar panel grants guide.
For businesses? No ECO4. No Boiler Upgrade Scheme equivalent. No government grant will write you a cheque for panels on your warehouse.
But three financial mechanisms significantly improve the numbers:
Full expensing (capital allowances). Since April 2023, businesses can deduct 100% of qualifying plant and machinery investment from taxable profits in the year of purchase. Solar panels qualify. For a company paying corporation tax at 25%, a £50,000 solar installation effectively costs £37,500 after the tax deduction. This is the single biggest financial incentive for commercial solar in 2026, and it's one that many business owners don't realise applies to renewable energy equipment.
Business rates exemption. Rooftop solar panels on commercial buildings are exempt from business rates in England. This was made permanent in the Autumn Statement 2023. Without this exemption, a large rooftop system could add several thousand pounds per year to your rates bill, which would seriously dent the payback calculation.
Green finance and commercial solar loans. Several lenders now offer specific commercial solar finance packages at rates between 4% and 7%. Lombard Finance, Funding Circle, and specialist green lenders like Thrive Renewables offer terms of 7 to 15 years. The key question: can you structure the loan so monthly repayments are less than monthly energy savings from day one? For most 30kW+ systems, yes. Cashflow positive from month one, even borrowing the full amount.
Some local authorities run commercial energy efficiency schemes too, though these tend to focus on insulation and heating rather than solar. The Warm Homes: Local Grant is aimed at domestic properties, not businesses, but check whether your council runs any parallel commercial programmes.
A quick digression: there was talk in 2024 about a dedicated SME clean energy grant scheme as part of the Warm Homes Plan. It hasn't materialised as of April 2026. We keep an eye on the Warm Homes Plan developments and will update if anything changes.
The gap between a good and bad commercial solar installation is enormous. With domestic solar, a bad installation might mean a few panels underperforming on a semi-detached roof. With commercial solar, you're talking about 100+ panels, complex inverter configurations, potential structural loading issues on flat roofs, and three-phase grid connections.
Getting it wrong is expensive. Getting it right isn't difficult, it just takes diligence.
MCS certification is the baseline. Any installer fitting solar panels in the UK should be on the Microgeneration Certification Scheme register. But for commercial work, you also want evidence of completed commercial projects at a similar scale to yours. Ask for case studies. A company that's brilliant at fitting 4kW domestic systems may have zero experience with 100kW flat-roof installations, and the engineering challenges are completely different.
20% to 35%. That's the price variation we see for identical system specifications on commercial jobs, £10,000 to £20,000 difference on a 50kW system. Some of that is legitimate (different mounting systems, different inverter brands). Some is just margin. Get at least three quotes.
Ask about the inverter strategy. String inverters are cheaper but mean one shaded panel can drag down an entire string. Microinverters or power optimisers cost more upfront but perform better on roofs with partial shading or multiple orientations. For a simple south-facing warehouse roof with no shading, string inverters are fine. For anything more complex, push for panel-level optimisation.
Avoid any installer who:
Honestly, we can't give you a straight answer on which installer is best. The commercial solar market is less standardised than domestic, and the right company for a 20kW office install might be completely wrong for a 200kW industrial job. Do the homework.
4 to 7 years. That's the typical payback range for a well-sized commercial system in 2026.
Why such a wide spread? Because payback depends on four variables that differ hugely between businesses: your electricity rate, your self-consumption ratio, whether you claim full expensing, and your location. A system in Southampton generates about 15% more electricity annually than an identical one in Glasgow, according to MCS data.
Here's how those variables shift the numbers:
| Factor | Faster payback | Slower payback |
|---|---|---|
| Electricity rate | 28p+ per kWh | Under 22p per kWh |
| Self-consumption | 70%+ used on site | Under 40% used on site |
| Tax relief | Full expensing claimed | Not claiming capital allowances |
| Location | South England | Northern Scotland |
| System size | 50kW+ (lower per-kW cost) | Under 20kW |
A distribution warehouse in the Midlands paying 27p per kWh, using 75% of generated power on site, and claiming full expensing? Payback in under 4 years. A small office in Edinburgh on a competitive energy contract using only 50% of generation? Closer to 7 or 8.
After payback, every unit the system generates is essentially free revenue for the remaining 18 to 21 years of the system's warrantied life. Most commercial panels carry 25-year performance warranties guaranteeing at least 80% of original output at year 25.
Here's what most guides won't tell you: payback calculations almost always assume static electricity prices. If commercial electricity costs rise even 3% per year, below the recent trend, your actual payback shortens by 6 to 12 months compared to the quoted figure. Every price increase letter from your energy supplier makes the case stronger retrospectively.
If you're comparing this against domestic solar economics, our guide on whether solar panels are worth it runs through the household numbers in detail. Commercial payback is typically faster because of scale economics and full expensing, but the principles are the same.
For most UK businesses with suitable roof space and daytime electricity demand, commercial solar is one of the strongest capital investments available right now. Not because of grants or subsidies, because the raw economics of generating your own electricity at today's energy prices simply work.
Open our eligibility checker or request a commercial solar assessment. Five minutes. You'll know whether your roof, consumption profile, and tax position make the numbers stack up.
Common questions