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ROI Calculator Guide: How to Calculate Commercial Solar Returns
Understanding solar ROI helps make informed investment decisions. Learn how to calculate payback, returns, and long-term value.
Solar Panels For Businesses Team
18 November 2025
Key ROI Metrics
Commercial solar investments should be evaluated using multiple financial metrics. Understanding these helps compare options and justify investment to stakeholders.
Payback Period
Time to recover initial investment:
- Calculate annual savings (bill reduction + export income)
- Divide system cost by annual savings
- Typical UK commercial: 4-6 years
- With tax benefits: 3-4 years
Return on Investment (ROI)
Total returns over system lifetime:
- 25-year lifetime typical for warranties
- 15-20% annual returns common
- Factor in panel degradation (0.5%/year)
- Include maintenance costs
Calculation Example
| Factor | Value |
|---|---|
| System Cost | £80,000 |
| Annual Generation | 95,000 kWh |
| Self-consumption (70%) | 66,500 kWh |
| Export (30%) | 28,500 kWh |
| Bill savings (@ 28p/kWh) | £18,620 |
| Export income (@ 4.5p/kWh) | £1,283 |
| Total annual benefit | £19,903 |
| Simple payback | 4.0 years |
Factors Affecting ROI
- Electricity rate increases (historically 5-10%/year)
- Self-consumption percentage
- System size vs roof capacity
- Financing method