Decide if solar panels are right for your business

Contents

1. Decide if solar panels are right for your business
2. Work out the size and number of solar panels you need
3. Calculate upfront costs and payback times
4. Maintenance costs
5. Sell electricity back to the grid
6. Get permission to install solar panels
7. Find a certified installer
8. Save the VAT on home solar panel installations
9. Find finance and support

Decide if solar panels are right for your business

With high electricity prices it makes sense for SMEs to consider generating their own energy.

Solar panels produce the most power during the day when business activities are often at their peak, saving a lot of energy.

Compared to wind turbines, solar panels have lower upfront costs and shorter payback times.

Payback times are about 11 to 14 years on average according to the Federation of Master Builders.

Find out more about payback periods for domestic solar installations from the Energy Saving Trust.

Solar panels are a good investment because they:

• usually last from 20 to 30 years overall
• work across the UK in a range of climates
• generally produce more power the farther south in the UK you have located your business

Solar panels could be a good investment if your business has:

• cash flow or financing for upfront costs
• at least 20 square metres of roof space
• a flat roof or pitched roof that faces south, east or west
• a roof that’s not obstructed by shade or other buildings
• space for solar panels on platforms (if roof is not an option)

However, if you use the bulk of your demand throughout the night, solar panels may not save you money.

Find out more about solar panels for business from Solar Energy UK.

Work out the size and number of solar panels you need

In the UK one kilowatt of solar panels usually produces between 800 and 1000 units (kilowatt-hours, kWh) of electricity per year.

To get an idea of how much solar power you need:

1. Check electricity bills to get your monthly kWh consumption.
2. Multiply this by 12 for how many kWh you use per year or add up your bills for the year.
3. Divide the electricity you would use per year, from step 2, by 800-1,000KWh to calculate the number of kilowatts of panels you would need to meet this.

Measuring solar power you might need can help you calculate how many kilowatts of panels you may need.

However, you should contact a solar installation company for a more detailed assessment.

We recommend that you research brands and types of solar panels online to compare their:

• performance
• durability
• warranty
• overall quality

Calculate upfront costs and payback times

How much it will cost you to install solar panels depends on:

• the size and type of the installation
• which region your business is located in

You will need to buy a battery system if you need to store energy for later use.

Buying a battery system adds significant upfront costs.

Use the Energy Saving Trust’s solar panel calculator to estimate how much you can save.

Maintenance costs

Once installed, solar panels have few running costs or maintenance issues.

Usually, you will only need to do light cleaning once per year to clean dust and dirt.

However, you will need to replace the solar inverter – which connects panels to the electricity – after 10 to 15 years.

Sell electricity back to the grid

Any electricity you don’t use or store in a battery can be sold to the National Grid through the Smart Export Guarantee (SEG).

SEG Licensees set the rate which they will pay SEG Generators, the contract length and other terms.

Different energy suppliers offer different rates (tariffs).

Check different energy suppliers to see which tariff is best for your business.

Find out if you are eligible and apply for a licence on Ofgem’s website.

Get permission to install solar panels

Check with your landlord before considering solar panels if you rent your property.

You must have your landlord’s permission to install solar panels.

Usually, you won’t need planning permission to install solar panels on your property.

You might need planning permission if you plan to install solar panels on safeguarded land or a conservation building.

Installation must comply with the Microgeneration Certification Scheme (MCS).

Check the full list of relevant planning permission guidelines.

Find a certified installer

Contact a certified installer if you’ve decided to move forward with solar panels.

Certified installers can provide an accurate quote and advice on your installation.

You can also find local installers using the Green Economy website.

After you install solar panels, you need to notify your Distribution Network Operator (DNO) if below 3.68kW. Otherwise, you need permission from your DNO.

Check GOV.UK for advice on registering your unit.

Save the VAT on home solar panel installations

From 2022 to 2027 VAT will no longer be charged on some domestic energy saving measures in England, Scotland and Wales.

Installation will be up to 20% cheaper for measures including all of the following:

• insulation
• heat pumps
• solar panels
• wind turbines

Find finance and support

Use our finance and support page to find green business grant programmes in your region.

Many green business grant programmes aim to help with improving energy efficiency, including the cost of heat pumps.

They can also offer:

• grants with no payback requirement
• matching funds up to a total amount or percentage of costs
• loans with low or no interest
• free expertise for energy assessments

Funding is dependent on the size of your business and where it’s located.

You can also use GOV.UK’s fund listing service to find programmes that apply to your business.