Savings
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.
Most UK SMEs save 35-55% on their annual electricity bill once a properly sized solar PV system is commissioned. The percentage depends on roof size, occupancy hours, and whether batteries are added. For a 50-employee business spending £30,000/year on electricity, that’s £10,500-£16,500 of saving every year. Savings start in the first full month of operation, scale up if grid prices rise (which they generally have done), and continue for 25+ years on a Tier 1 install. Crucially, the saved electricity cost was a tax-deductible expense — so the saving doesn’t add to your tax bill, you just have more profit.
How to size your saving from your bill
A reliable rule of thumb for UK SMEs:
- A solar system equal to 60-80% of annual consumption typically saves 35-55% of the bill (because not every kWh generated displaces a kWh used in real time — some exports at lower SEG rates).
- If you spend £30,000/year and pay 38p/kWh, you use 79,000 kWh/year. A correctly sized system would generate around 60,000 kWh/year — a 65 kW PV array.
- That £30,000 bill drops to £15,000-£19,500 — saving £10,500-£15,000.
A more granular calculation
To replace the rule of thumb with a proper figure, your installer should model:
- Your half-hourly consumption profile (12 months ideally, 6 months acceptable)
- Your roof orientation and pitch (south-facing flat: best; east-west split: 90% of optimal; north-facing: avoid)
- Local irradiance via PVGIS or Solcast data
- Your tariff structure (fixed contract, day/night split, capacity charges)
- Available SEG tariff (Octopus Outgoing leads at 15p/kWh; standard SEG starts at 4p/kWh)
- Battery storage scenario, if relevant
Out of that comes a 25-year cashflow model. Insist on seeing it.
Annual saving by sector
For a midpoint SME of each type:
| Business type | Annual electricity spend | System size | Year-1 saving |
|---|---|---|---|
| Office (45 staff) | £18,000 | 60 kW | £8,200 |
| Light-industrial unit | £58,000 | 180 kW | £33,500 |
| Showroom/retail | £22,000 | 50 kW | £9,800 |
| Garden centre | £45,000 | 130 kW | £24,000 |
| Boutique hotel | £38,000 | 80 kW | £18,200 |
| 24/7 manufacturing | £85,000 | 250 kW | £56,000 |
Why the percentage saved isn’t 100%
Even a system that generates 100% of your annual consumption won’t save 100% of your bill. Three reasons:
- Generation profile mismatch — solar produces in the middle of the day. If your business uses electricity overnight, you import then and export during the day at SEG rates (4-15p) lower than your import rate (38p+). The differential is the gap.
- Standing charges — your DNO and supplier daily standing charges are unavoidable.
- Capacity / availability charges — half-hourly metered SMEs pay capacity charges based on peak demand. Solar reduces energy charges but not always capacity.
A realistic ceiling is 60-70% bill reduction without batteries, 75-85% with batteries.
Common misconceptions
“Solar will eliminate our bill” — it won’t, unless you go fully off-grid (rare and expensive for SMEs). It typically halves the bill.
“Savings shrink as panels age” — yes, but slowly. Tier 1 panels degrade 0.4-0.5%/year. After 25 years, output is around 88% of original. In practice this is usually outweighed by grid price rises.
“You can use the savings to pay finance” — yes, and most asset finance for commercial solar is structured exactly that way: 7-year term, monthly finance payment lower than monthly bill saving from month one. Cash-flow positive throughout.
Next steps
For a tailored savings model, request a free feasibility study. For more on costs see our cost page or grants and funding. Related: aggregate annual savings, system sizing, payback.
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 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.
What size solar system does a business need?
Most UK SMEs need a solar system sized at 60-80% of annual electricity consumption to maximise self-consumption while staying within roof and capex constraints. For a business spending £30,000/year on electricity, that's typically a 60-75 kW system. Sizing should be driven by half-hourly meter data, not roof area or rules of thumb.