Power Your UK Business with Commercial Solar Panels

Written-by

Janet Richardson

Reviewed-by

Richard Burdett

Updated on

Jan 31, 2026

Power Your UK Business with Commercial Solar Panels

With the soaring costs of energy in the UK, solar panels for commercial premises have never been more attractive. If you're considering an investment in solar panels, we're here to help answer any questions you have before you contact installation companies.

In this article we'll look at the advantages and disadvantages of installing solar panels, the initial costs and potential pay-back periods including what grants and subsidies are currently available, property suitability considerations, and more.

Advantages of Solar for Business in the UK

Lower bills

Saving money on your outgoings is a no-brainer. Switching to solar energy can save you up to around 50–70% of daytime electricity costs, depending on system size and on-site consumption. In the UK, the average return on investment for a commercial solar system is typically between 6 and 10 years. If you shop well and have a good location for your system, it’s possible to reduce that timeframe. In the right circumstances, a commercial solar panel installation in the UK could even pay for itself in around five years.

Demonstrating your commitment to renewable energy

We’re taking the moral high ground here, but if the planet matters to you then a show of solidarity is a great way to stand behind climate action.

Lower C02 emissions and a smaller carbon footprint

Staying on the moral highway for now, switching to solar is a solid way to reduce your carbon footprint and your C02 emissions. There are a few other incentives to do this too, but we’ll get to those in a moment.

Increased revenue from the sale of surplus power

Back on the business side of the ledger, switching to solar could open new revenue streams for your business. There are government-backed mechanisms that allow licensed suppliers to buy surplus power exported to the grid under the Smart Export Guarantee (SEG). How much you earn comes down to several factors including system size, efficiency, self-consumption levels, and the export tariff you secure.

Make more use of effective space

Depending on the amount of roof space you have, you may decide to install a larger system with the intention of generating more income. There is no formal export limit under SEG, but export capacity is subject to approval by your District Network Operator (DNO). If you have ample roof space, sufficient cash flow, and grid approval, scaling up a solar installation can make financial sense.

Less reliance on energy providers, price hikes, and failing infrastructure

Generating your own power reduces reliance on traditional energy providers and exposure to wholesale price volatility. While solar PV does not provide full protection against power cuts unless combined with battery storage and appropriate controls, it can significantly reduce long-term energy costs and dependence on the national grid.

Disadvantages of Installing Solar PV on a Commercial Property in the UK

High Upfront Costs

The initial investment for a commercial solar PV system can be significant, especially for larger installations. Costs have fallen in recent years and are expected to continue doing so, but a 1 MW rooftop system typically costs between £700,000 and £1 million, depending on site conditions.

Grants can be intermittent and opportunities for loans, subsidies and incentives may not be available to all companies. 

Roof Suitability and Complexity

Not all roofs are structurally sound or optimally oriented for solar. Issues such as shading, unusual roof shapes, or old or damaged materials can limit feasibility or increase costs. There are solutions for asbestos roofs, but specialist handling and encapsulation requirements can add substantial cost.

Long Payback Period

While the standard return on investment period is 5–10 years, this may not be fast enough for companies looking for a 'quick fix'. This ROI estimate can be significantly longer if the system isn't installed in optimal conditions. 

Planning Consent

Listed properties or those in conservation areas, may require planning permission. 

Grid Connection

Approval from the District Network Operator (DNO) is required to export electricity to the grid, which can be complicated. It's always worth contacting your regional DNO before going to far with quotations. 

Maintenance

Solar panels are low maintenance but they still require occasional servicing. This will include checking the system is still running efficiently, inverter replacements, and panel cleaning. 

Geographical Location

Solar irradiation varies across the UK. It's worth considering that a system in the south may have a shorter payback period than one in the north. 

Interruption

It's possible that there may be some disruption to business practices during the installation process. Unlikely, but worth considering. 

Electricity Usage Patterns

If your business has intermittent electricity usage, or significantly increased short periods of peak usage, then solar PV may not be a good solution. The same can be said if your business uses most of it's electricity at night, or in the winter.  

How much do Commercial Solar Panels Cost for a UK Business?

For small-scale installations around 25 kW, suitable for small businesses, costs usually fall between £25,000 and £35,000. Medium-sized systems such as 100 kW typically range from £85,000 to £130,000, while large-scale installations of 1 MW or more can exceed £750,000, depending on site conditions.

These figures generally include panels, inverters, mounting systems, and installation labour. Additional costs may apply for grid upgrades, battery storage, or specialist roofing work. Although the initial investment is substantial, many businesses recover costs within 6 to 10 years through energy savings and export income.

Table of Estimated Costs for Commercial Solar Panel Systems

The table below shows estimated costs. Contact a recommended installation company for accurate quotation. 

System Size (kW)	Estimated Cost (£)
25 kW	£25,000 - £35,000
50 kW	£45,000 - £65,000
100 kW	£85,000 - £130,000
250 kW	£200,000 - £300,000
500 kW	£400,000 - £600,000
1 MW	£750,000 - £1,000,000
2 MW	£1,500,000 - £2,000,000
5 MW	£3,500,000 - £5,000,000

Warranties and Accreditation

Solar panels generally carry a performance warranty of 25 years, though product warranties may be shorter. Inverter warranties are typically 5–10 years, with extensions often available.

All solar PV installations in the UK should be carried out by an MCS-accredited installation company using MCS-certified equipment. This ensures compliance with industry standards and eligibility for schemes such as the Smart Export Guarantee.

You can find a directory of accredited, UK based installation companies by entering your postcode below. 

 

Current Grants and Subsidies for Commercial Solar Panel Installation 2026

One major advantage of switching your business to solar power is the large number of initiatives available to help cover the costs. These schemes and projects fall into five groups:

• Local authority 
• National government
• Energy providers
• NGOs, social enterprises, commercial enterprises, and non-profit organisations
• Commercial businesses

We’ll look at each in turn

Local authority

Most councils have schemes to help small and medium-sized businesses become more energy efficient. This often includes funds to make the switch to solar. For example, there’s an initiative in the Home Counties called Low Carbon Workspaces. This scheme offers qualifying businesses grants to improve their energy efficiency. Awards range between £1000 and £6750. As we mentioned above, many different councils run similar programs. So, before getting the company credit card out, it’s worth checking with your local authority. They’ll tell you what help, if any, is available. You can check here. 

National government programs

Like local authorities, the UK government runs initiatives to help companies improve energy efficiency. These programs change often, so it’s a good idea to check out the latest updates to find out what programs are available. As well as grants, loans, and other funding options they also run longer-term incentives. These nationwide programs help UK businesses shoulder the cost of solar. These schemes include:

The Smart Export Guarantee (SEG)

SEG is a commitment to buy excess energy generated by private solar systems. SEG is the replacement for the government’s Feed in Tariff (FIT). FIT, although closed to new applications is a popular scheme still running today. Unlike SEG, FIT also paid private solar owners for all the energy they generated.  

The Industrial Energy Transformation Fund (IETF)

The Department for Energy Security and Net Zero (DESNZ) and the Department for Business, Energy and Industrial Strategy (DBEIS) has been allocated almost £500 million to provide funding to UK businesses in the drive to become greener. The initiative is designed to progress the UK commitment to reach net zero emissions by 2050.

Funding will be provided to businesses investing in green technologies. 

Phase 2 is currently closed to new applications but in March 2023 IETF phase 3 was announced with £185m available for funding businesses looking to invest in green tech. The second stage of phase 2 window is opened in 2024. All funded projects must commence by 1 July 2025 and conclude no later than 31 March 2028.

For more information about the IETF and the application process contact ietf@beis.gov.uk.

If your site is based in Scotland, you can apply for the Scottish Industrial Energy Transformation Fund (SIETF), or contact them at IETF@gov.scot.

UK Shared Prosperity Fund (UKSPF) – Low Carbon Projects

The UKSPF provides grants covering up to 75% of the costs for energy-saving measures, including solar panel installations. Eligibility criteria and funding amounts vary, so it's advisable to check with your local council to see what's available. 

We advise all companies looking for solar panel installation grants to contact their local council to see what grant/funding opportunities may be available. In Scotland for example there's the SME loan scheme, where companies can apply for up £100,000 towards solar panel installations. Worcestershire and Rother councils have notable schemes as well. 

ZERO VAT Commitment

This scheme waives VAT on the installation of solar energy systems. It’s worth noting the fine print though when applying for this scheme. In simple terms, it only covers solar storage/batteries if they’re installed as part of a system. Batteries added later will not count and VAT is still applicable.

Important: the 0% VAT relief is for installations in residential accommodation (homeowners/households), not standard commercial installs. Businesses are normally charged VAT (typically 20%), though VAT-registered businesses may be able to reclaim it depending on their circumstances.

Business Rates Exemption

For some smaller scale solar PV systems installed on business premises, there may be exemptions or reductions available from business rates.

ECO4 and LAFLEX

The Energy Company Obligation is now in its fourth iteration hence ECO4. ECO is a government project to help cover the costs of solar installations and LAFLEX is a local authority amendment. LAFLEX plugged the many gaps in the scheme when it became obvious the government had set the acceptance criteria too high. Taking the form of a loan, this scheme is about as opaque as it gets. It began life as a joint venture between the UK government and the big energy providers. It still operates in theory, but its glory days are behind it.

ECO4 is primarily a domestic energy-efficiency scheme (aimed at households), and LA Flex is a route that allows local authorities to widen household eligibility - it is not a loan. As a result, ECO4/LA Flex will not usually fund standard commercial solar PV installations.

Energy providers 

What, if any, help you can get from your energy provider depends a great deal on who your provider is. Most providers can provide some assistance though even if it’s only as part of the ECO4 program. How much help you’ll get comes down to which company provides your power. 

Non-profits, NGOs, Quangos, and charities

In addition to governmental aid and help from energy providers, there’s a raft of third parties eager to assist. These organisations tend to hail from the non-profit sectors. They include NGOs, social enterprises, environmental action groups, and charities. Grants, loans, and advice are all options depending on where you live and how much research you put in. 

Here are a few examples of the programs and the Organisations that offer them:

Energy Redress Fund: a multi-million-pound fund open to CVS, CICs, and Co-operatives to help them reduce emissions.
Baywind Energy Co-operative Ltd: this organisation has a £1 million fund and is out there looking for solar and hydro sites to support.
Green Heat Network Funding: a capital grant-supported program. The Green Heat Network helps develop new and improve existing zero-carbon heat systems.

Salix Finance

Salix Finance is a government-owned organisation that offers interest-free loans for public sector businesses (such as schools, hospitals, and local authorities) to install energy-efficient technologies, including solar PV. These interest free loans are paid back through the savings made on energy bills.

National Lottery

The National Lottery has a programme called Awards for All, which is open year-round and can provide funding for solar PV installation. Lottery grants are more likely to be awarded to community buildings and charities, but it's always worth contacting them and proposing an application. As an example, the National Lottery awarded a £10,000 grant to a community center in Clifford, Herefordshire in April 2024. 

Commercial entities

As we mentioned above PR is one of the big incentives for switching to commercial solar power. This could explain why some commercial entities even provide funding for renewable projects.  Now, it’s important to mention that these funds likely have higher bars than other options. To tell the truth, you’d be lucky to get a penny out of them for a standard solar panel array for your shop. That said, if you can find a good angle, there’s lots of options for free money out there. A few of these organisations offer grants and funding. They include leading outdoor brand Patagonia, insurance giants Aviva, and the National Lottery which has a £10M pool for renewable energy projects.

Improved public relations

As we discussed, some companies are so invested in the renewable energy PR boom, they’re pouring their own cash into setting up funds.  For the rest of us smaller concerns though, there’s still plenty of PR mileage to be had for switching to solar power. In the Information Age, never has the world been smaller, faster, or more climate-conscious. Today, consumers operate in a near-Darwinian fashion. To survive in such a sustainability-focussed market we all need clear, bold, and climate-focussed policies. If not, we run the risk of our customers voting with their feet and their bank balances. 

Property Suitability Considerations for Commercial Solar Panels

Unless you have a perfect south facing, modern steel roof with no shade, you've probably got some questions about roof suitability. It's essential to assess your roof area to ascertain whether it's suitable for solar panel installation. Not every roof is suitable and any installation complexities can increase costs and/or reduce system performance. 

Roof Space and Orientation

A 100 kW system will usually require approx. 650 m² of usable space. You may have roof windows, functional skylights, or areas where solar panels can't be installed. South-facing roofs are optimal in the UK for capturing the most sunlight. East-west orientations can also be used. Anything from east to west through south is generally considered usable. A roof pitch between 12° and 40° is usable with 15° to 35° considered optimal. 

Structural Integrity

A structural survey may be necessary to ensure the load-bearing capacity is good enough to hold the panels.

Shading 

Any shade over the panels will affect the systems performance. Is there any shade from overhanging trees, neighbouring buildings, or even just HVAC units or roof chimneys?

Roof Condition and Material

If the roof is not sound then it may require repair or replacement before installation. Metal and membrane roofs are usually fine, while some felt or asbestos roofs may be unsuitable. 

Planning and Regulatory Constraints

Most commercial solar panel systems will fall under permitted development but if the property is listed or in a conservation area, then planning permission may be required. 

Battery Storage

Solar batteries in commercial installations allow businesses to store excess electricity generated during the day for use on demand. That said, they may not be the best investment and can, in some circumstances, increase payback periods. The suggested battery capacity should be investigated in detail before signing any contracts. 

For more information on Solar Battery solutions, please check our comprehensive article: https://www.renewableenergyhub.co.uk/main/solar-panels/batteries-for-solar-panels-solar-panel-batteries