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Our guide to solar panel solutions for businesses
Welcome to our ultimate guide to the world of solar panels for business.
Commercial solar panels produce cost-free, renewable electricity that protects your company against today’s sky-high electricity prices.
However, the details of commercial solar panels can be complex, so we’ve produced this guide to help get you up to speed. Here are some quick-fire links to the key parts of this guide:
Benefits of commercial solar panels
Most businesses in the UK use a mains electricity supply, which still relies on polluting fossil fuels and has become enormously expensive over the last few years. There is a better way. Commercial solar panels allow companies to generate renewable business energy while reducing costs. Here are three key benefits of commercial solar panels:
Green electricity generation
Solar electricity generation is both carbon-neutral and renewable. Improve the sustainability of your company’s operations and help the UK on its path to net zero.
Strong return on investment
Commercial solar electricity is a direct replacement for expensive business electricity, and you can sell any excess through the smart export guarantee to make a financial return.
Long-term price security
A commercial solar energy system will generate electricity for decades. An investment in solar will protect your business against rises in the price of electricity.
Compare commercial solar panels
In the UK, there are over 1,500 MSC certified solar installers, many local, some operating nationwide. Comparing commercial solar panel quotes is essential to maximising the return on investment on your commercial solar panels. Here are the key benefits of comparing commercial solar panels:
Save money
Ensure your commercial solar panel prices are competitive by comparing the quotes offered by multiple installers.
Choice
There’s more than one way to design a commercial solar panel system. Get multiple quotes to appraise your options.
Trusted installers
Choose a commercial solar installer you trust to support your business over the long life of your solar panels.
Are commercial solar panels right for my business?
A commercial solar panel array is a huge investment, whatever the size of your business. It’s important to understand exactly what you’re purchasing and how much electricity it will generate.
Here are the essential things to understand when deciding whether commercial solar panels are right for your business.
How do commercial solar panels work?
A commercial solar panel system is designed to efficiently convert the solar energy from the sun into 230V, 50Hz electricity that normally comes from a plug in the UK. Here are the key steps:
- The sun shines on your solar panel array – The light from the sun contains solar energy. A commercial solar panel array is set up to maximise the light it receives from the sun throughout the day.
- The solar cells produce direct current electricity – The semiconductor materials within the solar panels produce a direct electrical current when light from the sun is shining upon the panel.
- An inverter converts the electricity to AC – All appliances in the UK are designed to work with alternating current electricity. An inverter system converts the electricity produced by the solar cells into AC.
- Use, store or sell the generated electricity – Your business can either directly use the generated electricity, store it for later use or sell it back to the grid through the smart export guarantee.
What is the lifespan of commercial solar panels?
Solar panels used at commercial properties are long-life assets that will reliably generate renewable energy for decades. A commercial solar setup has various components that need to be considered from a lifetime perspective.
The general consensus for solar panels is that modern panels will reliably generate electricity for 40+ years and degrade in efficiency by only half a percent each year.
A typical manufacturer’s warranty will guarantee that a panel will still produce 85% of its original power output after 20 years. Given this strong promise, it’s safe to say manufacturers are confident panels will perform for much longer than this.
Other electrical components, like the inverter, will typically need replacing after 13 years. If you’ve chosen a system with solar batteries, these may need replacing every 10 to 15 years.
How can I estimate the number of panels needed for my business?
There are two key factors to consider when estimating the number of solar panels your business needs. These are:
- How much space do you have for solar panels?
- How much electricity do you want to produce?
Let’s first start with space. Businesses in the UK seeking to generate a lot of electricity will require a lot of space and it’s often a limiting factor. First, calculate the maximum number of solar panels your business could actually fit. See our section below for the dimensions of a typical solar panel.
Secondly, calculate how much electricity you want to produce from your commercial solar panels. Here’s our handy article on calculating business energy usage.
The table below is a rough guide to how much electricity you should expect to generate from a single solar panel in the UK. Divide the amount of electricity you would like to generate each month (in kWh) by the monthly electricity generation of each panel below to get the number of panels you will need.
| City | Average monthly peak sun hours | Monthly electricity generation from each 400W panel |
|---|---|---|
| Cardiff | 87 | 26.1 kWh |
| London | 84 | 25.2 kWh |
| Edinburgh | 72 | 21.1 kWh |
Source: Average peak sun hours – climate.biz, 0.75 factor applied to account for real-world conditions.
Note: The exact power generation from a solar panel is affected by factors such as the type of commercial solar panels you choose, the angle of your roof and the daily weather conditions.
How big are commercial solar panels?
Commercial solar panels are typically rectangular in shape and approximately two meters in length and one meter in width.
As a guide, the below table shows the dimensions of a range of panels currently available on the market.
| Cell type | Dimensions | Efficiency | Wattage | Weight | Cost (net) |
|---|---|---|---|---|---|
| Monocrystalline | 1.925 x 1.040m | 20% | 405W | 22kg | £88 |
| Monocrystalline | 1.722 x 1.134m | 21% | 410W | 21kg | £95 |
| Monocrystalline | 1.722 x 1.134m | 22% | 420W | 21kg | £110 |
| Monocrystalline | 2.278 x 1.134m | 21% | 550W | 27kg | £112 |
Source: Solar panel choices available solartradesales as of 1 September 2023
The cost of solar panels for businesses
The cost of buying, installing and operating commercial solar panels depend on various factors. We always recommend getting an assessment and tailored quotes from trusted solar panel installers before purchasing equipment. It’s also important to factor in VAT on Solar Panels for Business, which you can read in our comprehensive guide.
That being said, here’s our rough guide to the different costs involved in commercial solar panels.
How much is a commercial solar panel?
Over the last decade, the cost of solar panels has fallen sharply; this trend is expected to continue as solar technology improves. See the section above for the wholesale prices for individual commercial solar panels.
The cost of solar equipment scales with the number of solar panels you intend to install at your commercial property; see our section above for how many solar panels you will need.
It’s important to remember that there are costs beyond the initial purchase of commercial solar panels. The panels make up only a small part of the overall costs. For a working commercial solar array, you’ll need to purchase:
- Individual solar panels
- Inverter(s)
- Mounting kit
- Other electrical equipment
- Solar batteries (optional)
And then there’s the installation and maintenance costs.
What are the installation costs of commercial solar panels?
Installation costs are a significant and essential component of getting commercial solar panels. Here’s a breakdown of the typical costs involved in installing commercial solar panels:
- Design
- Labour costs for the installers
- Scaffolding costs
- MSC certification costs
- Planning assessments and application fees
In commercial solar panels, each project is different, so it’s essential to get an in-person site assessment and quotation for your business before proceeding to the next steps.
What are the maintenance costs of commercial solar panels?
Once your business has gone through the initial purchase and installation of a solar panel array, ongoing maintenance costs are limited. The inclement British weather will even do a reasonable job of keeping your solar panels clean with a regular rinse.
Typically, your commercial solar panel installer can perform remote system monitoring that will detect any issues that arise. It’s recommended that your business arrange an annual inspection of the panels for a more thorough in-person check.
Any issues arising from these maintenance checks should generally be covered by commercial solar panel warranties.
What is the expected return on investment (ROI) on commercial solar panels?
Commercial solar panels are a long-term investment but will yield a strong return on investment. Here are the two ways in which solar panels will generate a financial return.
- Replacing expensive electricity from the grid – With a commercial solar panel installation, you’ll be less reliant on purchasing electricity from the national grid. Since 2022, business electricity prices have soared, improving the return on investment in commercial solar panels.
- Income from the smart export guarantee – Under the smart export guarantee, a business energy supplier must purchase any excess unused electricity generated from your solar panels. The smart export guarantee offers a reliable source of income for your business.
The return on investment you can expect from solar panels depends on the specifics of your solar installation, the weather conditions in your area and how you finance the project. We recommend discussing this with your installer as part of the quotation process.
An alternative option is to compare business energy rates and search for a green tariff.
Commercial solar panel financing options
Here’s a summary of the most popular financing options for buying and installing commercial solar panels.
- Hire Purchase Agreement (asset finance) – UK businesses can typically use HP asset finance arrangements to pay for long-life assets like solar panels. Under a hire purchase financing, your business will make regular repayments over an agreed term to purchase your solar panels.
- Solar Panel Leasing – Another popular option is solar panel leasing In a Solar Panel Lease agreement, where you’ll pay a monthly rental for your solar panels for 10 to 20 years. In a commercial solar panel leasing agreement, your lessor will be responsible for maintaining your solar panels.
- Green Business Loans – The major UK banks offer a variety of green energy financing options to their customers. If you’re considering financing commercial solar panels, we recommend contacting your bank to see what options they offer.
- Power Purchase Agreements – If you are considering installing a large commercial solar panel array that will produce upwards of 500,000kW (1,000+ panels), then a Corporate Power Purchase Agreement could be the best financing option. In a PPA, an investor will take all the upfront costs associated with purchasing and installing your solar panels.
- Solar panel grants – Companies in the UK can often benefit from regional business energy grants to encourage renewable energy generation. Use the government’s business finance support finder to see if there are any grants that your business qualifies for.
What warranties are included on commercial solar panels?
Here’s a summary of the key warranties offered over commercial solar panels.
- Solar panel performance warranty – A performance warranty is a guarantee of solar panel power output over time. A typical performance warranty will be 90% of maximum power output after ten years and 85% after 15 years.
- Solar panel product warranty – A product warranty guarantees that all components of your commercial solar panels will continue to work for a period (typically ten years). A product warranty will guarantee the free replacement of any parts that fail during this time.
- Solar panel workmanship warranty – A warranty offered directly by your solar panel installer, guaranteeing the correct functioning of all the components of your commercial solar panels.
We recommend completely understanding the warranties on your commercial solar panels before committing to purchase.
Types of commercial solar panels
Solar panel technology is ever-evolving fast, producing panels with greater efficiency and lower cost. Here’s a summary of the different types of solar panels currently available as options for businesses.
We’ve categorised the types of commercial solar panels into the material composition of each.
Monocrystalline solar panels
Generation: First generation
Efficiency: 15-20%
Average cost per panel: £250 to £400
Life expectancy: 30 to 50 years
Composition: A single crystal of cylindrical silicon ingot
Advantage: Highest efficiency solar panel on the market
Polycrystalline solar panels
Generation: First generation
Efficiency: 13-17%
Average cost per panel: £225 to £250 per panel
Life expectancy: 30 to 40 years
Composition: Multiple crystals of silicon ingot
Advantage: Cheaper alternative to monocrystalline panels
Thin Film solar panelsGeneration: Second generation
Efficiency: 7 – 13%
Average cost per panel: £200 to £250
Life expectancy: 10 to 20 years
Composition: A thin film of cadmium telluride, copper indium gallium selenide or amorphous silicon mounted between layers of glass.
Advantage: Light and easy to install, more ascetic.
Generation: Second generation
Efficiency: 7 – 13%
Average cost per panel: £200 to £250
Life expectancy: 10 to 20 years
Composition: A thin film of cadmium telluride, copper indium gallium selenide or amorphous silicon mounted between layers of glass.
Advantage: Light and easy to install, more ascetic.
Commercial solar panels and battery storage
A battery storage unit is an optional feature on solar panels for business. Battery storage allows you to store the electrical energy produced by your solar panel array. Battery storage on commercial solar panels is a significant additional upfront cost. Still, it has the benefits of:
- Utilising electricity at peak times – Large businesses have half-hourly meters that charge for electricity at peak and off-peak rates. Battery storage allows your business to avoid purchasing electricity from the grid at peak times and reduces your maximum demand charges.
- Off-grid electricity – With sufficient battery storage capacity and solar panel output, removing the need for a mains electricity supply is possible. This has cost benefits, particularly avoiding daily business energy standing charges. Here’s our full guide to off-grid businesses.
- Avoid blackouts – Solar energy stored within your batteries provides an emergency backup power resource for any interruptions on your local electricity distribution network.
- Electricity arbitrage – Solar battery storage allows you to profit from hour-by-hour changes in electricity pricing. The demand flexibility service allows your business to sell electricity during periods of peak demand. Here’s our full guide to electricity arbitrage.
Commercial solar panel installation step-by-step
Once you’ve decided that solar panels are the right option for your business, the next step is to get a quotation for the purchase and installation of the entire system.
Commercial properties come in different shapes, sizes and energy needs. Solar projects for businesses are essentially all bespoke, so it’s essential to work with a trusted commercial solar installer.
Here are the three key steps to getting solar panels for your business.
Desktop survey
When you first get in touch with a commercial solar installer, they’ll conduct a desktop review of your property using Google Maps and other industry tools to determine the suitability of solar at your property.
If they determine that your property is suitable, they’ll arrange for an on-site visit to provide a more detailed assessment and quotation.
Site Survey and quotation
An on-site survey of your property will:
- Review of any planning permission issues
- Review how your system will connect to the local grid
- Estimate solar power output
- Estimate a return on investment
The result of a site survey will be a recommendation and a quotation for the entire project costs. If you decide to proceed, your installer will carry out the installation.
Design, Construction and Installation
Using the measurements taken during the site survey, the installer will design your commercial solar array. Once designed, your installer will gain permission from your local distribution network operator to connect your solar panels to the grid.
Once approval is granted, an expert operations team will handle all the installation details, providing regular progress updates.
Once the work is finished, your installer will arrange for MSC certification, allowing you to start benefiting from generating your own electricity.
Commercial solar panels – frequently asked questions
Below, our business energy experts answer all the common questions about commercial solar panels.
Do I need planning permission for commercial solar panels?
Typically not, installing commercial solar panels is a permitted development under The Town and Country Planning legislation (see Class J). However, this legislation allows for a pretty long list of circumstances requiring planning permission.
Commercial solar installers will perform a planning permission assessment as part of a site survey to identify any issues.
Will solar panels cause roof damage?
It’s important to rely on professional solar panel installers to avoid any structural issues with your roofing and to ensure that the solar panel racking does not interfere with the property’s drainage.
Roof-mounted solar panels on commercial properties can be easier as they typically have flatter roofs.
It’s important to remember that using a roof for solar panels is unnecessary. Ground-mounted, agrivoltaic solar farms or even floating solar panels are an option.
Do the panels require direct sunlight to work?
Solar panels generate some electricity in cloudy conditions, but you want your solar panels to get as much direct sunlight as possible.
Under overcast conditions, your solar panels will produce anywhere between 10% and 60% of their regular power output, depending on how thick the cloud cover is.
When rain clouds block sunlight and darken the sky, system output will be 40–90% lower.