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 (4-15p/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 15p/kWh on Octopus Outgoing — 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.