Are Commercial Solar Panels Worth It?

Yes, according to the thousands of organisations across the UK who enjoy the rewards of renewable energy, commercial solar panels are well worth the investment.

However, investing in commercial solar panels is a sizeable expense for most businesses. This high cost may make the investment hard to justify for some. An unsuitable property, planning complications, or inadequate incentives make solar a non-starter for others.

To help you make an informed decision about solar power for your business, we’ll explore the costs, benefits, drawbacks, and incentives of commercial solar systems.

Key Takeaways:

• Commercial solar panels cost from £20,000 to £120,000+.
• An investment in commercial solar can be recouped in under 10 years.
• Solar panels provide a reliable source of electricity, shielding companies from volatile energy prices.
• Switching to solar energy significantly reduces a company’s carbon footprint.
• Solar panels can enhance a company’s reputation, improve ESG scores, and promote sustainable business practices.
• The high cost of commercial solar panels, an unsuitable property, or limited funding may prevent companies from accessing solar.

How Much Do Commercial Solar Panels Cost?

A small business can install a solar panel system for under £20,000 (excluding battery) while a large corporation may spend over £100,000. Here are key variables that factor into the price:

• Your company’s electricity consumption needs.
• The orientation of your roof or land (for ground-mounted solar panels). South-facing buildings capture the most sunlight. By contrast, north-facing roofs need a larger, more expensive installation to harvest enough sunlight to meet demands.
• Roofs pitched between 30° and 45° are the most cost-effective. A flat roof typically requires more panels to deliver the same return as a 40° structure (all else being equal).
• How many solar panels you need is determined by your energy needs, property orientation, and the size of the panels (in wattage).
• Panel quality is a major consideration. You can choose affordable thin film solar panels or opt for more expensive polycrystalline units or premium brand monocrystalline panels.
• Installation prices vary from installer to installer. For smaller installations, the difference may be minor but for larger projects involving 100+ panels, the cost difference might be considerable.

While the cost ranges widely depending on the business, here are the average prices for commercial solar panels:

Business size	Solar panel system kW size	Min. number of solar panels – 400 W	Min. number of solar panels – 600 W	Estimated cost (with installation)
Microbusiness	10 kW	25	17	£14,000 – £16,000
Small	20 kW	50	34	£24,000 – £35,000
Medium	50 kW	125	84	£50,000 – £72,000
Large	100 kW	250	167	£90,000 – £125,000

Including a storage battery in the setup can add £9,000 – £12,500 for a microbusiness and over £50,000 for a large company.

What Are The Benefits of Commercial Solar Panels?

Here are some of the terrific benefits of investing in commercial solar panels:

• Lower electricity bills: Substantial cost savings are possible when you generate energy from the sun’s free rays. A small shop could make annual energy savings of £1,500. A larger business with an electricity bill of £12,000 could save £7,500, assuming it generates enough solar power to come off the grid for 7 to 8 months of the year.
• Positive ROI: A small business saving £1,500 effectively pays back a small solar system in 10-13 years. A big business saving £7,500 will have a payback period for a £70,000 commercial solar installation in 10 years. Some companies recoup their system costs within 7 years.
• Long-term value: Quality solar panels last for 25 years with modest maintenance costs. If you recoup your cost in 8 years, you achieve an impressive 3X return on your investment.
• Storage capacity: Using a solar storage battery allows you to store excess electricity generated during the day for productive use later. You could use it to operate a night shift, for example.
• Energy security: Solar electricity helps secure your business energy needs, independent of the National Grid. Rising energy costs are always a threat and solar makes you less vulnerable to events like the 2021 to 2023 energy price shocks.
• Improved ESG: Commercial solar panel systems are good for corporate Environmental, Social, and Governance (ESG) goals and scores.
• Positive brand image: Customers and employees are increasingly drawn to companies that demonstrate a commitment to low-carbon and sustainable operations.
• Environmental benefits: Solar power reduces your carbon footprint. A 20 kW system prevents over 3 tonnes of CO2 emissions from entering the earth’s atmosphere.

What are the Drawbacks of Commercial Solar Panels?

While commercial solar delivers lower energy bills and greater energy security, there are a few downsides:

• Upfront cost: The initial outlay for buying and installing solar panels is high. This may be a barrier for some businesses, especially if grant and financing options are limited.
• Space requirements: Your business needs enough roof space or land to install enough panels to meet your business energy demands.
• UK weather: Solar panels are very effective for 7 to 8 months of the year in the UK. During this period, you might enjoy full energy independence. In winter, solar production declines by around 80%, making you dependent on the grid again.
• Energy storage costs: To use solar electricity when the sun isn’t shining, you need battery storage. Batteries are expensive and increase the overall cost of a solar project.
• Business interruption: Installing commercial solar panels is a big job involving plenty of scaffolding, wiring, and cabling. Larger installations take weeks and may interrupt trading and cause inconvenience. Professional installers like Eco Happy work with you to minimise this short-term disruption and set you on course for long-term rewards!

Are There Incentives For Commercial Solar Panel Installation?

There are a few government and market incentives to encourage the transition to cleaner, greener commercial buildings. When deciding if solar is worth it, consider the following:

• Smart Export Guarantee (SEG) – The Smart Export Guarantee lets you sell the excess electricity you generate back to the grid. You are paid for every unit of electricity you ‘export’. You typically receive less than your ‘import’ price but the scheme offers a nice sideline earning.
• Tax incentives – Solar panels can be claimed as a business expense through the Annual Investment Allowance (AIA). Up to 100% of your solar expenses can be deducted from taxable profit.
• Full Expensing – This tax relief measure allows companies to claim 100% of the cost of certain capital expenditures in the first year. Effectively, you write off your investment cost in one go. Solar panel investments may qualify as a full expensing allowance. Companies can choose to claim under the AIA or full expensing, depending on their tax circumstances.
• Renewable Energy Generation Relief – Solar energy projects in Scotland can qualify for 100% relief on their business rates if their solar project benefits one or more community organisations.
• Power Purchase Agreements – A Power Purchase Agreement (PPA) lets you access solar and reduce your energy bills without an upfront capital outlay. Under a PPA, a third-party company installs, owns, and maintains the solar panels on your premises. You benefit through a contract to buy a share of the electricity at favourable rates.
• Local sustainability and green funds – Keep an eye out for green funding initiatives through local authorities or private sector schemes in your region.

Do You Need Planning Permission To Install Commercial Solar Panels?

In most cases, installing solar panels at your business premises doesn’t require planning permission. Solar panels are classified as permitted development which is exempt from planning approval.

To avoid a planning application:

• Your panels can’t protrude above the highest part of the roof (excluding chimneys).
• The installation can’t be higher than 200 mm above the roof’s surface (600 mm for flat roofs).
• The solar system must be positioned to minimise visual impact.

There are a few exceptions where planning is required:

• Larger ground-mounted solar setups exceeding 9 sq m in area and 4 m in height usually require planning.
• Listed buildings and properties in designated zones such as conservation areas require planning.
• Solar panel systems over 50 kW may need prior approval from the local planning authority. The local authority will check that your proposed installation doesn’t adversely impact the surrounding neighbourhood.

To check the planning requirements for your commercial property, consult your local planning office. The Planning Portal (England and Wales), Planning Northern Ireland, and mygov.scot (Scotland) are additional helpful resources.

Note: You need your landlord’s permission to install a solar panel system if you rent your premises. You also want to ensure your solar project complies with local building regulations.

Get A Free Commercial Solar Panel Quote

Take a step towards a clean, green future for your business. Get a solar panel installation quote, free of charge, today. Complete the short form on our to secure your business energy future and start enjoying dramatically reduced electricity bills.

If you’re not quite ready to install solar panels but want further advice about business solar and renewable energy, contact Eco Happy at any time.

FAQs

How efficient are commercial solar panels?

The best commercial solar panels have an energy efficiency rate of about 24%. Advances in solar technology are expected to push efficiencies closer to 30% in the short term. At the other end of the market, cheaper thin-film solar panels are only around 15% efficient.

Do you pay VAT when buying commercial solar panels?

UK businesses pay VAT in the normal course at 20% when purchasing solar panels. UK homeowners currently pay 0% VAT on solar panels.

What is the average size of a commercial solar panel in the UK?

The average size of a commercial solar panel in the UK is approximately 195 cm x 100 cm, with a typical wattage output ranging from 400W to 600W. However, the exact dimensions and wattage vary depending on the manufacturer and panel type.

Final Thoughts

Commercial solar panels offer exciting benefits that can transform your organisation’s operations and environmental footprint. The initial cost may be steep – £20,000 to £120,000 – but lower energy bills make it possible to repay the investment in 10 years or less.

Further long-term advantages include stable electricity costs, reduced carbon emissions, and a positive brand image. These benefits make commercial solar a smart investment for businesses looking to future-proof their operations.