Are solar panels worth installing at your business?

Business solar can replace electricity you buy and earn export payments, but your daytime demand determines the value. Eligible solar installations up to 5 MW in Great Britain can receive Smart Export Guarantee payments [S1]. Compare a roof survey, generation estimate and operating costs before choosing ownership or a funded arrangement. Checked October 2026.

Last checked 17 October 2026

Are solar panels worth it on business premises?

Start with your electricity demand during daylight. A large roof does not establish a business case. Ask for generation and consumption to be compared over matching time intervals, including weekends and shutdowns. Commercial roof leases and grid access also affect delivery, as the government’s Solar Roadmap explains [S2].

Solar photovoltaic, or PV, panels generate electricity. An inverter converts their direct current into alternating current for your building and the network [S10]. Kilowatts (kW) measure power; kilowatt-hours (kWh) measure energy. Kilowatts peak (kWp) describe panel capacity under test conditions. For an illustration, 50 kWp producing an assumed 900 kWh per kWp annually gives 45,000 kWh. That is a modelling assumption, not a site forecast.

Use these illustrative size bands to brief a designer, rather than treating them as sector averages:

Follow the commercial solar sizing guide before filling your roof.

What could solar save or earn, and when would it pay back?

Separate avoided electricity purchases from cash export receipts. SEG payments use export meter readings, and suppliers set their tariffs [S1]. Do not multiply all generation by your import price. The self-consumption and export guide explains that distinction.

An illustration, not a quote. Every input below is an assumption, including the capital range. It is not a surveyed UK price benchmark. See commercial solar panel cost for quote scope.

The capital assumption covers panels, inverter, mounting, installation and commissioning. Roof replacement, network reinforcement, batteries and funding costs are extra. No charger is included, so driver prices and charging sessions do not enter this solar calculation. No grant or tax benefit is assumed.

Annual gross value = generation × on-site share × import price + generation × exported share × export price. Annual net benefit = gross value − maintenance. Simple return on investment (ROI) = annual net benefit ÷ host capital × 100. Payback = host capital ÷ annual net benefit.

For example, mid-use gross value = 31,500 × £0.25 + 13,500 × £0.06 = £8,685. Subtract £600 to get £8,085. Dividing capital of £45,000–£65,000 by £8,085 gives the mid-use payback range.

Under the assumed part funded split, host capital is £22,500–£32,500 and annual net benefit is £2,760 / £4,042.50 / £4,897.50 at low / mid / high use. ROI and payback match the table because both capital and benefit halve. These are bill reductions plus export income, not entirely cash receipts.

In the separate fully funded roof-rental alternative, annual host income is the assumed £600–£1,200 rent. The funder owns the output; no host electricity benefit is included. There is no host capital payback calculation. For a power purchase agreement (PPA), calculate purchased solar costs separately using the actual contract tariff. Compare PPA versus buying and roof rental.

These are simple first-year calculations. They exclude degradation, inverter replacement, inflation, financing, tax and discounting. Test lower tariffs and lost production in the business solar payback guide before relying on them.

Can you put solar through your business, and what tax applies?

HMRC designates solar panels as special-rate expenditure [S4]. Annual investment allowance permits deduction of qualifying expenditure from taxable profits, subject to eligibility and the available £1 million allowance [S5]. That is a tax deduction, not a reimbursement of the purchase price. Check with your accountant; start with capital allowances for solar panels.

VAT relief for installed energy-saving materials covers qualifying residential accommodation and relevant charitable buildings [S6]. Do not assume an ordinary commercial roof qualifies. The standard VAT rate is 20% [S7]. Ask for the invoice treatment and recoverability to be checked with your accountant. Read commercial solar and battery VAT.

Are there grants for commercial solar?

Search the government’s business support finder by location and eligibility [S8]. Do not include an unapproved award in your base calculation. Check eligible expenditure, award conditions and permission to start work with the funder. The local council solar grants guide is the next check. No local award amount or closing date is assumed here.

What planning, grid and roof checks should you make?

In England, permitted development rights for non-domestic rooftop solar have conditions; the former 1 MW ceiling was removed [S9]. Check prior approval, protected buildings and the actual design with your council. Use the separate national rules elsewhere in the UK. Read the commercial solar planning guide, then check with your solicitor.

Ask the distribution network operator (DNO), which manages your local electricity network, about the connection. G99 is the engineering recommendation covering generation connected in parallel outside the G98 route. Solar and batteries need their combined import and export requirements assessed [S10]. An export cap can change your generation value; read G98 versus G99.

Before accepting a proposal, request a structural roof assessment, shading estimate and access plan. Put roof repair, insurance, business rates, liability, contract exit and removal costs on the review checklist. The Solar Roadmap identifies roof suitability and lease arrangements as commercial deployment issues [S2]. Do not assume that using a funded model removes those questions.

Which installer questions belong on your quote checklist?

For SEG, solar installations up to 50 kW need Microgeneration Certification Scheme (MCS) certification or equivalent; above that, the export licensee determines suitable certification evidence [S3]. Check the proposed route before ordering. Use MCS for commercial solar.

Compare equipment, generation assumptions, monitoring access, exclusions and handover documents. Ask who fixes faults, who pays for access equipment and what happens if the installer stops trading. The installer selection guide helps you compare written proposals.

What should you do next?

Gather your postcode, electricity data, roof drawings and ownership details, then get matched with an installer that covers your area.

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