Commercial solar panels for small businesses: costs, payback and the grid

Is commercial solar worth considering?

Solar panels cut the electricity you buy from your supplier by generating some of it on site. The best candidates are businesses that use power during the day and own, or have a long lease on, a sound roof or land: offices, workshops, farms, retail units, warehouses and schools. A café that opens 8am to 4pm uses most of its power while the sun is up. A bar that trades at night uses little.

The gain is not the electricity you generate, it is the electricity you stop buying at your supplier's unit rate, plus any payment for what you export.

Indicative costs

Prices vary by installer, roof type and scaffolding. One installer's 2026 guide (Heatable, updated 30 March 2026, a company that sells solar, so treat it as a sales-side estimate) gives these ranges:

System size	Indicative installed cost	Indicative payback quoted
Up to 50kWp, SMEs	about £800 to £1,300 per kWp	3 to 6 years
30kWp	£24,000 to £39,000	4 to 5 years
100kWp	£70,000 to £100,000	3 to 4 years

The same source suggests businesses use 80 to 90 percent of what they generate on site. Treat all of this as a starting point and obtain at least three written quotes.

Worked payback example

The yield below is an assumption we have chosen for illustration, not a measured figure. Real output depends on location, roof angle and shading, so ask installers for a site-specific estimate.

• System: 30kWp costing £30,000 (inside the range above).
• Assumed output: 900 kWh per kWp a year, so 30 × 900 = 27,000 kWh.
• Used on site (80%): 27,000 × 0.8 = 21,600 kWh. At the DESNZ Q2 2026 non-domestic average of 24.51p/kWh including CCL, saving = 21,600 × £0.2451 = £5,294.
• Exported (20%): 5,400 kWh at an assumed export rate of 5p/kWh (suppliers set their own rates, so check real offers) = £270.
• Total benefit: £5,294 + £270 = £5,564 a year.
• Simple payback: £30,000 ÷ £5,564 = about 5.4 years.

This ignores panel degradation, maintenance, inverter replacement, price changes and tax. Your actual avoided rate is your own unit rate, so use your latest bill, not the national average. If your unit price is lower, the payback is longer.

Grid connection: G98 and G99

You must involve your local network operator (DNO). Under the published connection procedures, generation or storage rated above 16A per phase (3.68kW on a single-phase supply) comes under G99, and the application is made to the DNO before the system is connected; only small systems within that limit use the simpler G98 notification route. A G99 system of up to 50kW on a three-phase supply can use a simplified G99 process. Almost every commercial array will be G99, so build the DNO's response time into your plans and ask the installer for a realistic date. Your installer normally manages this. Costs and conditions for network upgrades vary, so ask what limits the DNO may place on export. See also supply capacity and kVA charges.

Selling the surplus

Ofgem's Smart Export Guarantee lets eligible generators of up to 5MW be paid for exports, with suppliers setting their own rate, which must be above zero. You need an export meter and an export MPAN. Read Smart Export Guarantee for business. A battery can store surplus for the evening; see business battery storage.

Tax, grants and finance

The GOV.UK capital allowances page says businesses can claim the Annual Investment Allowance of up to £1 million on certain plant and machinery, and lists a 40% first-year allowance for qualifying plant and machinery bought after 1 January 2026. The page does not say how solar panels are treated, so ask an accountant which allowance, if any, applies before you sign. On VAT, the 0% relief for energy-saving materials covers homes and buildings used solely for relevant charitable purposes, not ordinary business premises, so a business should expect standard-rate VAT on the installation, usually reclaimable if it is VAT-registered. Funding options include loans, leases and power purchase agreements where a third party owns the panels and sells you the power. See efficiency grants and loans.

Before you buy: checklist

1. Check your electricity use by time of day. Half-hourly data helps; see energy monitoring.
2. Check who owns the roof, and get landlord consent and a lease long enough to recoup the cost.
3. Get a structural check and insurance advice.
4. Choose an installer certified under MCS (the Microgeneration Certification Scheme, usual for systems up to 50kW) and compare three quotes. Ask for assumptions behind yield and payback.
5. Confirm the DNO route (G98 or G99) and timings.
6. Tell your supplier, as your tariff and metering may need to change.

Beware of unsolicited calls promising "free" panels or guaranteed savings. Check the contract length, ownership of the equipment, who pays for repairs, and what happens when you sell or leave the premises.

Which businesses benefit most

Match solar to how you use power, not to how big the roof is.

• A small office open 9 to 5: most use falls in daylight, so a high share is used on site. Weekends and bank holidays send power to export, which pays less than you save by using it.
• A cold store or workshop: steady daytime load means strong self-consumption, but summer cooling demand may be higher than winter.
• A farm: large roofs and daytime loads such as milking or drying can suit solar. See farm business energy.
• An evening-only restaurant or pub: low daytime use, so most output would be exported; a battery or a smaller array may be a better fit.

Running and ownership

Panels need little attention, but inverters and monitoring equipment can need repairs or replacement during the system's life. Ask your installer what warranties cover and how long each lasts, what the performance guarantee is, and who monitors output. Keep the DNO approval, commissioning documents and certificates, as you will need them if you sell the building or change supplier. If you move, check whether the panels stay with the property or can be removed.

Solar also interacts with your meter and contract. Some suppliers have conditions about on-site generation, and an export-capable site needs its own export meter and MPAN. Ask your supplier before you install. For background on the numbers on your bill, see finding your MPAN and MPRN.

Next steps

• Pull your last 12 months of bills and your daytime use.
• Get three quotes with yield and payback assumptions in writing.
• Check export options and rates before you commit.
• Read how long commercial solar takes to pay back.