Commercial solar panels for business

Solar panels let a business make some of its own electricity and buy less from the grid. For premises that use a lot of power during daylight hours, such as offices, shops, warehouses, farms and factories, that can take a real chunk out of the electricity bill. This guide uses official government data to show what solar costs, how much it produces, and the rules to check before you commit.

How much do commercial solar panels cost?

The Department for Energy Security and Net Zero (DESNZ) found the median cost of a 10 to 50kW solar installation in 2025/26 was about £1,204 per kW of capacity. Non-domestic installations in that size band averaged £1,167 per kW. Larger systems cost less per kW than small ones.

The figures come from the Microgeneration Certification Scheme (MCS) installation database and cover Great Britain for April 2025 to March 2026:

System size	Median cost, all installations (£ per kW)	Average cost, non-domestic installations (£ per kW)
0 to 4kW	1,595	1,650
4 to 10kW	1,546	1,320
10 to 50kW	1,204	1,167

A few points about what these numbers include:

• Included: the panels and other generating equipment, installation, connecting to the electricity supply, and VAT where it applied.
• Not included: batteries installed alongside the panels, extended warranties and other building work.
• Trend: after allowing for inflation, the median cost of a 10 to 50kW installation fell by 4% compared with 2024/25.
• Scale: 14,277 installations in the 10 to 50kW band were included in the 2025/26 analysis.

The DESNZ data only covers systems up to 50kW, which is also the upper limit of MCS certification for electricity generation. For a larger roof, get several itemised quotes and compare them on cost per kW.

How much electricity do commercial solar panels produce?

As a rough guide, each kW of solar capacity in the UK produces around 800kWh of electricity a year. That comes from DESNZ’s analysis of Feed-in Tariff installations, which found a median solar load factor of 9.2% in 2024/25. A load factor is the actual output as a share of the maximum possible output (1kW x 8,760 hours x 9.2% is about 806kWh).

2024/25 was a poor year for sunshine. The 9.2% figure was the lowest in the series, and average sun hours were at their lowest since 2012/13. So treat it as a cautious starting point.

Output also varies a lot through the year and around the country:

• By season: the load factor was 13.6% from April to June 2024, but only 4.7% from October to December.
• By region: South West England, the East of England and North East England had the highest median load factors, all around 9.5%. London had the lowest, which DESNZ suggests may be down to pollution on panels or shading from tall buildings.

Your installer should model output for your roof’s orientation, pitch and shading. Ask to see the assumptions.

What is the payback on commercial solar panels?

Payback depends mainly on how much of the electricity you use yourself. Every kWh you use on site saves your full unit rate. Every kWh you export earns only the export tariff, which is usually far lower.

Worked example: a 30kW system

This is an illustration, not a forecast. Replace the inputs with your own figures.

Input	Value	Where it comes from
System size	30kW	Example
Installed cost	£35,010	30 x £1,167, the DESNZ 2025/26 non-domestic average for 10 to 50kW
Annual output	24,180kWh	30 x 806kWh, based on the 9.2% load factor
Your electricity unit rate	25p per kWh	Example; check your own bill
Export rate	4.47p per kWh	Ofgem’s average untied SEG tariff, April 2024 to March 2025

If you use 80% of the output on site:

• 19,344kWh used on site x 25p = £4,836 saved
• 4,836kWh exported x 4.47p = £216 earned
• Total benefit: about £5,052 a year, a simple payback of about 7 years

If you use only 50% on site:

• 12,090kWh x 25p = £3,023 saved
• 12,090kWh x 4.47p = £540 earned
• Total benefit: about £3,563 a year, a simple payback of about 10 years

The example ignores maintenance, inverter replacement, any fall in panel output over time, finance costs, VAT you can reclaim, tax relief and future price changes. It uses a unit rate rather than your fully delivered price, because solar doesn’t reduce your standing charge. For current market prices, see our business electricity prices page.

The lesson is simple: a system sized to your daytime demand usually pays back faster than one sized to fill the roof. Our time-of-use tariffs guide explains how your tariff affects the value of each kWh, and a battery can move surplus midday output into the evening.

Do you need planning permission for commercial solar panels?

In England, installing solar panels on the roof of a non-domestic building is usually permitted development, so you may not need a planning application. Since 21 December 2023 there has been no 1 megawatt cap on rooftop solar under these rights.

The same changes made it easier to put solar canopies over car parks, as long as they are more than 10 metres from people’s homes. The rights still come with conditions, including in conservation areas, so check before you start. Planning rules are different in Scotland, Wales and Northern Ireland. Your local planning authority can confirm what applies to your building.

Do you need permission from the network operator?

Yes, the local distribution network operator (DNO) must always be told about solar panels, and larger systems need approval before they’re connected. MCS guidance sets out two routes:

• G98: for installations up to 16 amps per phase (about 3.68kW on a single-phase supply). The installer notifies the DNO within 28 days of commissioning.
• G99: for anything larger. Permission to connect must be granted before installation.

Sixteen amps per phase is only about 11kW even on a three-phase supply, so a commercial system of tens of kW will need G99 approval. Build the application time into your plans. Our guide to what a DNO is explains who runs the network in your area.

Can you get paid for the electricity you export?

Yes. Under the Smart Export Guarantee (SEG), larger suppliers must offer an export tariff to solar installations of up to 5MW in Great Britain, and the rate must always be above zero. You need an export meter that records half-hourly readings. Rates vary a lot between suppliers and tariffs. Our Smart Export Guarantee for business guide covers eligibility, typical rates and how to apply.

What tax and business rates rules apply to commercial solar?

Capital allowances

HMRC treats spending on solar panels as special rate expenditure for capital allowances. The Annual Investment Allowance (AIA) lets you deduct the cost of most plant and machinery from profits, up to £1 million a year, so many businesses can claim the full cost in the year of purchase. How it works for you depends on your structure and other spending, so ask your accountant.

Business rates

In England, eligible plant and machinery used for on-site renewable generation and storage, including rooftop solar, is exempt from business rates until 31 March 2035. If your premises are in Scotland, Wales or Northern Ireland, check with your council.

VAT

The temporary zero rate of VAT on solar panels applies only to residential accommodation and buildings used solely for a relevant charitable purpose. Installations on business premises are standard-rated. If your business is VAT-registered, you can usually reclaim the VAT on business purchases.

What should you check before getting solar quotes?

1. Your daytime usage. Pull your half-hourly or monthly data so you know how much you use when the sun is up. Our half-hourly meters explainer covers where to get it.
2. Your roof. Its condition, remaining life, orientation, shading and whether it can take the weight.
3. Your lease. If you rent, check whether you need the landlord’s consent for roof works.
4. Planning. Confirm whether permitted development applies or you need an application.
5. Grid connection. Ask the installer to handle the G99 application and tell you about any export limit.
6. Like-for-like quotes. Compare cost per kW, expected annual output, panel and inverter warranties, and what’s excluded.
7. Certification. For systems up to 50kW, an MCS certificate helps when you apply for SEG payments.
8. Your supply contract. Check your current contract has no clauses on reduced volumes. Our volume tolerance guide explains what to look for.

Solar is one of several routes to cleaner, cheaper power. For how it fits with green tariffs and power purchase agreements, see our renewable energy for business guide.

Frequently asked questions