Use this commercial solar savings calculator to project your specific 25-year electricity bill savings, AIA tax relief, simple payback, IRR, and DCF NPV. Below: pre-calculated savings tables for typical UK commercial demand sizes (use as starting reference), the 6-input calculator methodology (run on your specific site for free via our quote form), and worked sensitivity analysis showing how electricity inflation + self-consumption + AIA impact the 25-year totals. For our interactive payback calculator see payback calculator; for direct cost-by-size see how much do commercial solar panels cost.
Pre-calculated 25-year commercial solar savings table
Below is the 25-year savings table for typical UK commercial demand sizes. Assumptions: 4% electricity inflation, 0.5% panel degradation, 70-85% self-consumption, 100% AIA tax relief on capex, 7% discount rate for NPV.
| Annual demand | System size | Capex | Year-1 saving | 10-yr cumulative | 25-yr cumulative | Payback |
|---|---|---|---|---|---|---|
| 20,000 kWh/year | 15 kW | £16,500 | £3,800 | £44,500 | £135,000 | 4.3 yrs net AIA |
| 50,000 kWh/year | 40 kW | £40,000 | £8,400 | £98,300 | £298,000 | 4.8 yrs net AIA |
| 100,000 kWh/year | 75 kW | £71,250 | £14,000 | £164,000 | £497,000 | 5.1 yrs net AIA |
| 250,000 kWh/year | 200 kW | £180,000 | £40,500 | £473,800 | £1,440,000 | 4.4 yrs net AIA |
| 500,000 kWh/year | 400 kW | £340,000 | £86,400 | £1,010,800 | £3,070,000 | 4.0 yrs net AIA |
| 1,000,000 kWh/year | 800 kW | £640,000 | £180,000 | £2,106,000 | £6,390,000 | 3.6 yrs net AIA |
The 6-input savings calculation methodology
A proper UK commercial solar savings calculation requires 6 inputs. Each input materially affects the output — generic "average" calculations miss 25-40% accuracy versus your specific site.
- Annual electricity demand (kWh). Source: last 12 months electricity bills (commercial meters typically have detailed half-hourly data via supplier portal). Required precision: ±5%.
- Current commercial import tariff (p/kWh). Source: your latest electricity bill. UK commercial typically 24-32p/kWh in 2026 including all components (wholesale + DUoS + TNUoS + CCL + standing charge). Required precision: ±2p.
- Self-consumption ratio (%). Source: half-hourly meter data modelled against PVSyst generation profile, or sector averages where meter data unavailable. UK commercial typically 55-95% depending on load profile. Required precision: ±5%.
- SEG export rate (p/kWh). Source: chosen SEG provider tariff. UK commercial typically 4-15p/kWh depending on provider (Octopus Outgoing Fixed 10-15p; smaller suppliers 4-8p). Required precision: ±2p.
- Electricity inflation (%/year, 25-year). Source: forward projection from Ofgem + National Grid ESO. Default 4% conservative central; 5% stretch; 3% floor. Sensitivity analysis recommended.
- AIA tax relief (% of capex). Source: company corporation tax position. 25% for profitable Ltd Co at main rate; 40% for sole trader/partnership at higher-rate income tax; 0% for charity/not-for-profit. Verify with company accountant.
Worked example: 100k kWh SME calculation
Real-world worked example. Site: 60-staff insurance brokerage in Birmingham, 1,500 sqm two-storey office, annual electricity demand 100,000 kWh, current commercial tariff 27p/kWh, SEG export rate 10p/kWh (Octopus Outgoing Fixed), 4% electricity inflation, 75% self-consumption (weekday daytime operations + light overnight server load), profitable Ltd Co at 25% corporation tax. System: 75 kW solar (140 panels at 540W). Capex: £71,250 turnkey (£950/kW). AIA tax relief: £17,813 (25% × £71,250). Net effective capex: £53,438. Year-one generation: 71,250 kWh (75 kW × 950 kWh/kWp). Year-one savings: 53,438 kWh self-consumed × 27p = £14,428 + 17,813 kWh export × 10p = £1,781 = £16,209/year. Simple payback: 4.4 years gross, 3.3 years net AIA. 10-year cumulative savings: £197,200 (with 4% inflation). 25-year cumulative savings: £594,000. 25-year DCF NPV @ 7%: £232,000. IRR: 19.7% net AIA. See interactive calculator for live recalculation with your inputs.
Sensitivity analysis: how key variables affect savings
Understanding sensitivity helps you stress-test the savings calculation against scenarios where assumptions don\'t hold. Below: sensitivity ranges on the 100k kWh worked example above.
- Electricity inflation: 3% inflation = £463k 25-yr savings (-22%); 4% baseline = £594k; 5% inflation = £755k (+27%). Higher inflation strengthens solar case substantially.
- Self-consumption ratio: 60% = £481k 25-yr (-19%); 75% baseline = £594k; 90% = £706k (+19%). Battery storage typically lifts SC from 75% to 90%, justifying its additional capex.
- Import tariff: 24p = £528k 25-yr (-11%); 27p baseline = £594k; 32p = £703k (+18%). Higher-tariff regions (London, South East) achieve stronger savings.
- System size: Under-size by 20% = £475k 25-yr (-20%); right-size = £594k; over-size by 20% = £631k (+6% — limited gain because excess exports at low SEG rate).
- AIA tax relief: 0% (charity) = £594k 25-yr but £71k capex with 6.5-yr payback; 25% (Ltd Co) baseline = £594k but £53k effective capex with 4.4-yr payback; 40% (higher-rate sole trader) = £594k but £43k effective capex with 3.5-yr payback.
How the savings calculation differs by sector
Different UK commercial sectors achieve different savings profiles because self-consumption ratios vary widely by load profile. See payback by sector for full sector-by-sector analysis. Quick summary by sector: Cold storage 90-95% self-consumption = strongest savings + fastest payback (3.5-4.5 years gross). Manufacturing + food production 75-85% SC = 4-5 year payback. Warehouses + logistics 65-80% SC = 4.5-5.5 year. Hotels + hospitality 70-85% SC = 4.5-6 year. Care homes 80-90% SC = 5-6 year. Offices 55-70% SC = 5.5-7 year. Schools (term-time) 45-60% SC = 6-7.5 year. Churches 20-40% SC = 8-12 year.
4-route finance savings comparison
Same 75 kW solar system, four different finance routes deliver different savings profiles. (1) Cash + AIA: £71k upfront, £14k year-one savings + £17.8k AIA relief = £31.8k year-one net benefit; £594k 25-year cumulative. Strongest 25-year return. (2) Asset finance 7-year: £0 upfront, £1,030/month finance vs £1,350/month savings = +£320/month from month one. End of term you own asset; £494k 25-year cumulative net of finance interest. (3) Operating lease 10-year: £0 upfront, £820/month off-balance-sheet lease vs £1,350/month savings = +£530/month. £465k 25-year cumulative. (4) PPA 15-year: £0 upfront, you buy generated electricity at 16p/kWh vs 27p grid = £7,840/year saving + £0 ongoing. £215k 25-year cumulative — weakest return but zero risk + zero responsibility. See PPA vs cash purchase comparison.
Get your site-specific savings calculation
The pre-calculated tables and worked examples on this page give you a defensible starting point but your specific site will deliver different numbers based on your specific demand, tariff, load profile, roof characteristics, and corporation tax position. Submit our quote form for a free desk-based savings calculation within 5 working days. We deliver: PVSyst yield model, full DCF spreadsheet (downloadable), 4-route finance comparison, AIA-adjusted analysis, 25-year cash flow projection, sensitivity tables against your specific variables. No call required, no obligation.
Commercial solar savings calculator — common questions
How do I calculate commercial solar savings for my UK business?
The complete 25-year commercial solar savings calculation involves 6 inputs: (1) annual electricity demand (kWh from last 12 months bills), (2) current commercial import tariff (24-32p/kWh typical in 2026), (3) self-consumption ratio (target 60-85% based on sector load profile), (4) SEG export rate (4-15p/kWh from your SEG provider), (5) annual electricity inflation (model 4% conservative, 5% stretch), (6) AIA tax relief (25% of capex for profitable Ltd Co at main rate corporation tax). The output: year-one cash savings, 10-year cumulative, 25-year DCF NPV, simple payback (gross and net), IRR. Our free desk feasibility runs this calculation against your specific site within 5 working days.
What's the typical 25-year commercial solar saving for UK businesses?
A typical UK SME with 100,000 kWh annual electricity demand installing a 75 kW solar system (£71,250 capex) saves approximately £497,000 over 25 years gross of capex, or £425,000 net of capex (assuming 4% electricity inflation, 0.5%/year panel degradation, 75% self-consumption). After 100% AIA tax relief drops effective capex to £53,438, the net 25-year saving climbs to ~£443,500 plus £19,400 NPV improvement. A larger 250,000 kWh demand business installing 200 kW saves approximately £1.44m gross / £1.26m net over 25 years. A 1m kWh major industrial business installing 800 kW saves approximately £6.39m gross / £5.75m net.
How does the AIA tax relief affect my commercial solar savings calculation?
AIA (Annual Investment Allowance) provides 100% first-year capital allowance on solar capex for UK profitable limited companies. At the 25% main rate of corporation tax in 2026, every £100 of solar capex generates £25 of year-one tax relief — effectively reducing your capex by 25%. The savings calculation impact: simple payback drops 25% (from 5-6 years gross to 3.75-4.5 years net), IRR climbs 4-7 percentage points, 25-year NPV increases by 15-25%. For sole traders + partnerships using cash basis at 40% higher-rate income tax: AIA delivers 40% relief — even better. For charities + not-for-profits without corporation tax: AIA delivers nothing — PPA route works better. We always model both AIA-included and AIA-excluded scenarios.
What inflation rate should I assume for my commercial solar savings calculation?
UK commercial electricity has inflated approximately 8-12% per year compound from 2020-2025 — substantially above CPI inflation. For 25-year forward projection: model 4% per year as conservative central case (consistent with National Grid ESO + Ofgem central scenario), 5% as stretch case (consistent with continued capacity market + network reinforcement costs), 3% as floor case (extremely optimistic, requires UK economic + energy market structural changes). The 4% conservative central case is what we use in default DCF — delivers honest payback projections that customers see crystallise in years 1-5 of actual operation. Higher inflation assumptions can be modelled on request for sensitivity analysis.
How does the savings calculation differ for charities vs profitable Ltd Cos?
Charities and not-for-profits don't pay corporation tax, so 100% AIA tax relief delivers nothing. The savings calculation excludes the £25k+ year-one AIA benefit that profitable Ltd Cos receive. Charity savings calculations show longer simple paybacks (full gross capex divided by annual savings) — typically 5.5-8 year payback range for charity solar. Alternative approaches for charities: (1) PPA (Power Purchase Agreement) at 13-18p/kWh fixed vs grid 24-32p — immediate operational savings without capex commitment. (2) Grant-funded purchase via charity-specific decarbonisation funds (Charity Bank, Esmée Fairbairn, Garfield Weston) — 50-100% grant covers the capex. (3) Salix PSDS for public sector charities (NHS, state schools, councils) — 100% grant funded.
What's the simple payback vs DCF NPV in commercial solar savings calculations?
Simple payback divides the capex by year-one savings — a quick rule-of-thumb that ignores time value of money and electricity inflation. Useful for quick sanity check, weak for full financial decision. DCF NPV (Discounted Cash Flow Net Present Value) discounts each year of future savings back to today's value at a chosen discount rate (typically 7% for UK commercial solar), accounting for electricity inflation + panel degradation + maintenance + inverter replacement. Proper commercial solar quotes include both: simple payback (gross + net of AIA) for headline; full 25-year DCF NPV + IRR for financial decision. Reject any quote that gives you only a simple payback number — DCF analysis is industry standard for £20k+ capex commitments.
How do I compare commercial solar savings to other investment opportunities?
Compare commercial solar IRR (typically 15-25% for profitable UK Ltd Cos) to your business's alternative capital uses. Commercial solar typically outperforms: corporate bonds (5-8% yield), pension scheme returns (8-12%), property investment (8-15% commercial rental yield), equipment leasing (10-15% after-tax IRR). Commercial solar typically underperforms: high-growth business reinvestment (often 25-40% ROIC at scale), aggressive M&A roll-ups, certain technology bets. For a profitable UK SME with capex headroom and no higher-ROI alternative use, commercial solar is typically the best risk-adjusted use of £20-£500k+ of capex with the additional benefit of ESG / Scope 2 emissions reduction valuable for customer and investor reporting.