Let’s talk money! As energy costs continue to rise and environmental concerns grow, more businesses are turning to commercial solar energy – not just for sustainability, but for the significant financial advantages it offers. Whether you’re looking to cut monthly outgoings, increase your green credentials, or secure long-term savings, solar power is a smart investment.
Saving money on business energy bills
Usually the most significant factor in businesses choosing commercial solar is the impact that solar energy has on electricity costs. Where power generated on site is utilised on site, there is an instant saving on your energy bill. Power that you may usually have paid 35p/kWh for has now cost you nothing. If you use 1,000kWh of solar power, that’s a £350 saving straight away! Over a year, this saving is significant, especially if you’re a particularly high energy user.
Tip: Maximise your savings. Is there anything you can do during daylight hours that you’d usually do once the sun goes down? Can things be charged or cycled whilst the sun is shining? Remember – the more power you use while your solar is generating, the bigger the saving on your bill.
Revenue from solar panel installation
Now that we’ve seen the savings, let’s look at the potential revenue. Once your system is installed, you may be able to register for Smart Export Guarantee (SEG), a solar incentive program currently available in the UK. Once registered with your chosen licensee, your export will be metered and payments made for any units exported to the grid.
Tip: You don’t have to register for SEG with the company you currently buy your power from. It’s always worth shopping around to see which company can offer the best rates at the time of your application.
Solar tax relief
As an added benefit to the savings and revenue of your solar installation, in most instances businesses can claim 100% first-year capital allowances on solar panel investments under the Annual Investment Allowance (AIA). This allows you to deduct the full cost of solar equipment from taxable profits.
Tip: Speak to your company accountant to check your eligibility and for further information.
Commercial solar panel installation cost
In short, there’s no fixed cost for installing solar panels. From an installation perspective, it depends on the size of array, type of roof and ease of access. Manufacturer quality and prices can vary greatly which is also a big factor in the cost of installation. Following a site visit, a firm quotation can be issued so you’ll know exactly how much the solar installation will cost.
Tip: When obtaining comparative quotations, to ensure like for like, make sure the companies are using the same manufacturers.
Solar panel grants
Solar grants for businesses these days are quite rare, however there are some pockets of money that may be available to you. Some Local Enterprise Partnerships (LEPs) and Growth Hubs offer bespoke funding or low-interest loans for renewable energy projects. These are often region-specific and may include match funding.
Tip: Contact your local council directly to find out what finding may be available in your area.
Solar panel financing
Where funds may not be readily available to install solar panels on your premises, financing may be an option. Whilst some banks offer favourable rates on ‘green’ loans, asset financing is often a cost-effective option. Our partners at Premier Asset Financing will be able to talk through your options and offer competitive rates.
Tip: Once a finance offer has been issued, the additional cost can be worked into our proposal to give a more accurate overall payback.
Solar Power Purchase Agreements
In some instances where the building is rented, installation of solar may not be possible as a direct investment. In this case, if your landlord is willing to install, you could arrange what’s called a Power Purchase Agreement (PPA). This is an agreed price per kWh, so you can benefit from energy cost security whilst your landlord receives a fixed return on their investment.
Tip: Check out our case study for a tenanted site we completed where both parties are delighted with the installation benefits. Better still – share it with your landlord!
Whether you have funding and are looking to install ASAP, or are at the start of your solar journey trying to find your way, we’re happy to help guide you and provide support and information. Contact our solar team today for more information.
