Savings
How much can a business save with solar panels?
A typical UK SME with a 100 kW solar system saves £18,000-£25,000 per year at current commercial electricity prices. Savings come from displaced grid imports (largest share, around 60-75% of generation) and SEG export payments (4–12p/kWh) for the rest. Lifetime savings over 25 years usually total £350,000-£550,000 on a £85,000-£100,000 install.
A typical UK SME running a 100 kW commercial solar system saves £18,000-£25,000 per year at 2026 electricity prices. The bulk of that saving (around 65-75%) comes from displacing grid imports at 35-55p/kWh on a fixed commercial contract. The remaining 25-35% comes from SEG export payments — between 4p/kWh on standard tariffs and 12p/kWh on Octopus Outgoing Fixed (as at July 2026) — for any generation your site can’t consume in real time. Across a 25-year asset life, lifetime savings typically reach £350,000-£550,000 on an install costing £85,000-£100,000.
What drives saving size
Three variables determine how much your business saves:
- System size (kW installed) — bigger system = more generation. Capped by roof area, electrical capacity, and demand.
- Self-consumption rate — what percentage of generation you use on-site vs export. Daytime sites with steady baseload consume 70-80% directly. Office-only sites with weekend gaps consume 50-60%. Adding batteries lifts both ends by 15-25 points.
- Grid electricity price — the price you avoid by self-consuming. SMEs paying 38p/kWh save more than those paying 22p/kWh.
Worked savings examples by sector
| Sector | System size | Self-consumption | Annual saving |
|---|---|---|---|
| 50-employee office | 50 kW | 60% | £10,500 |
| Light-industrial unit | 150 kW | 75% | £33,000 |
| Garden centre | 100 kW | 70% | £22,500 |
| Multi-let business park | 250 kW | 65% (sleeve PPA) | £49,000 |
| Retail showroom | 40 kW | 55% | £8,200 |
| Hotel (24/7 baseload) | 80 kW | 80% | £19,500 |
What the savings buy you, not just in pounds
Beyond the cash saving, on-site solar delivers:
- Energy cost certainty — you fix 40-70% of your electricity cost for 25 years. Useful for tender submissions and budgeting.
- EPC rating uplift — typically lifts a band C to a band B, useful for MEES compliance and commercial property valuations.
- Scope 2 carbon reduction — the cleanest single intervention available. Useful when FTSE 250 customers ask for emissions data.
- Property value increase — most SME premises see 5-15% commercial value uplift with PV installed.
How savings change over the asset life
Year 1: full saving at current grid price. Years 2-10: grid prices typically rise 2-5%/year (often higher in volatile periods); your saving rises proportionally. Year 11: inverter replacement (£8,000-£15,000 for a 100 kW system). Reduces net saving for that year. Years 11-25: panel output degrades 0.4-0.5%/year (Tier 1) — minor reduction in generation but offset by rising grid prices. Year 25: residual asset value or relocation to next site.
Common misconceptions about solar savings
“Savings are guaranteed” — they’re not. They depend on grid price holding up (it’s been historically reliable on the upside) and your business continuing to use electricity during daylight hours. If your business goes 24/7 grid imports during dark hours then most generation goes to export at lower SEG rates.
“You save more with batteries” — sometimes. Batteries lift self-consumption by 15-25 points, which adds savings, but battery cost (£450-£700/kWh) means payback usually extends 1-3 years. Above 100 kW PV with significant overnight or weekend baseload, batteries make sense. Below that, often not.
“Savings drop in year 26” — only if you do nothing. Panels have 30-40 year physical lifespan with most Tier 1 manufacturers offering 25-year linear output warranties at 87% of nameplate. Replace inverters once around year 11 and savings continue indefinitely.
Next steps
For a savings model based on your half-hourly meter data and roof, request a free feasibility study. For more on costs see our cost guide and grants and funding page. Related: annual savings detail, payback period.
Related questions
What's the payback period for commercial solar in the UK?
Commercial solar payback in the UK is 5-8 years for most SMEs in 2026, dropping to 3-5 years after 100% AIA tax relief for profitable limited companies. Payback depends on self-consumption, grid tariff, and system size. Daytime-occupied sites with high baseload (manufacturing, retail) hit the lower end; office-only sites with weekend gaps run 7-9 years.
How much can my business save with solar panels?
Most UK SMEs save 35-55% on their annual electricity bill with a properly sized solar PV system. For a business spending £30,000/year on electricity, that's £10,500-£16,500 saved every year, rising as grid prices rise. Savings start month one, are non-taxable (they reduce a tax-deductible cost), and continue for 25+ years.
How much does a 100 kW commercial solar system cost?
A 100 kW commercial solar system in the UK costs £85,000-£110,000 turnkey in 2026, depending on roof type, three-phase status, and whether optimisers are specified. Typical annual generation is 90,000-95,000 kWh, saving £20,000-£25,000/year for a daytime-occupied SME at current grid prices. Simple payback lands at 4-5 years before tax relief, 3-4 years after AIA.
Common concerns, answered honestly
"What if we move premises?"
A common objection — and a fair one. If your remaining lease is under five years, a PPA (the funder owns the system, you buy the power) usually beats an outright purchase, or we build roof-rights portability into the deal. We model lease length explicitly and tell you if solar genuinely isn't the right fit.
"What if the roof needs work?"
We survey the roof structure before quoting. Older or asbestos-cement roofs are costed transparently up front — no surprises after contract. See roof suitability for the full checklist.
"What if payback takes too long?"
Typical UK commercial payback is 5–8 years against a 25-year asset — but we won't oversell it. If your load profile or tariff doesn't stack up, our savings calculator and free desk feasibility will show you honestly. See is it worth it?