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 Fixed pays 12p/kWh as at July 2026; 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 (4–12p) 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 (4–12p/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.
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?