Power your business with solar

Is solar a good investment for a business?

Solar can be a good fit where a business has a suitable site, a stable demand for electricity during daylight hours and enough time in the premises to benefit from the investment. Offices, workshops, warehouses, farms and hospitality businesses can all have opportunities, but their operating patterns are different.

A workshop running machinery through the working day may use much of its generation immediately. A venue used mainly in the evening may export more electricity unless it can shift demand or make a separate case for battery storage.

Your first question should be: how much of the electricity we generate can we use, and what is that electricity worth to us? Annual generation alone does not answer it.

1. Understand when your business uses electricity

Start with at least 12 months of electricity bills and, where available, half-hourly consumption data. Bills show your annual spend; interval data helps reveal how demand changes throughout each day.

Ask the surveyor to consider:

• Normal opening hours, shifts and weekend working.
• Seasonal changes, holidays and shutdown periods.
• Continuous loads such as refrigeration, ventilation, servers or pumps.
• Electric vehicle charging and when vehicles are actually on site.
• Planned changes to equipment, occupancy or heating.
• Efficiency projects that could reduce demand before solar is installed.

A business can consume more electricity over a year than a solar array generates and still export a substantial amount on sunny weekends. Compare generation and demand over matching time periods, not just annual totals.

If an LED lighting upgrade is already planned, use the expected lower demand in the solar assessment. Otherwise, the proposal may overestimate how much solar electricity you will use.

2. Check the roof and building before choosing a system

Roof area is only one part of suitability. Arrange an assessment of structural capacity, roof condition, remaining service life, access, shading and the proposed mounting method. Different roof constructions need different fixing or ballast arrangements.

The survey should identify rooflights, drainage routes, fragile surfaces and any suspected asbestos-containing materials. These affect layout, access and the safe delivery of the work. A specialist assessment may be necessary before the installation can be designed.

If the roof is likely to need replacement soon, compare the cost of completing roof work first with removing and reinstating panels later. Ask how the installation will affect roof warranties and who is responsible for preventing and resolving leaks.

Panel orientation and shading should be modelled for your site. An east–west layout may spread generation across more of the working day, while another arrangement may produce more electricity overall. The preferred option depends on your demand and the building, not a universal rule that every panel must face south.

3. Confirm ownership and permission to use the premises

If you lease your building, involve the landlord early. Agree permission for the installation, access for maintenance, ownership of the equipment and what happens when the lease ends.

Check whether the lease term supports the proposed investment period. Also clarify responsibility for reinstatement, roof repairs, insurance and any third-party finance agreement.

For shared buildings, establish which electricity meter will receive the generation. Solar connected to a landlord’s supply does not automatically reduce every tenant’s bill. Any allocation or electricity resale arrangement needs to be agreed explicitly.

4. Establish the planning and building requirements

In England, some solar installations on non-domestic buildings can proceed under permitted development rights, subject to limits and conditions. That does not mean every commercial roof can be fitted without further checks. Building designation, panel position, roof layout and the type of development can affect the route, and some schemes require prior approval.

Ask for written confirmation of the planning approach before work starts. Where necessary, involve the local planning authority. Listed buildings, sites within their grounds and sensitive locations need particular attention. Building regulations and structural requirements must be considered separately from planning permission.

The Planning Portal’s non-domestic solar guidance explains the conditions in England. Projects elsewhere in the UK follow their own planning rules.

5. Check the electricity network connection early

Your Distribution Network Operator, or DNO, manages the local electricity network. It has a separate role from the company supplying your electricity.

The connection process depends on the generating equipment, its rating and the existing installation. Many commercial projects fall under the G99 process. National Grid Electricity Distribution identifies G99 routes for generation above 16 amps per phase, or equipment that does not meet the relevant G98 requirements.

Network constraints can affect permitted export, project cost and timescale. A design may need an agreed export limit or additional network work. A proposal to prevent export does not automatically remove the need to follow the applicable connection process.

Ask who will make the application, what assumptions the quotation uses and which costs remain provisional. Obtain the necessary agreement before committing to a design that depends on unrestricted export. See National Grid’s G99 connection procedures.

6. Choose the right capacity for your objectives

Three measurements are useful when comparing proposals:

• kWp: the panels’ rated peak capacity under standard test conditions.
• kW: power at a particular moment, such as inverter output or site demand.
• kWh: the quantity of electricity generated, used or stored over time.

A 50 kWp array does not generate 50 kW continuously. Output varies with daylight, weather, season and site conditions. Ask for monthly generation estimates and a clear explanation of shading, system losses, inverter sizing and any export restriction.

Compare options against your objective: reducing electricity purchases, maximising financial return, supporting future electrification or using a limited capital budget effectively. Filling every available roof space may suit one business and be less attractive for another.

7. Separate electricity savings from export income

There are two main financial benefits: avoiding purchases of electricity used on site and receiving payment for eligible surplus electricity exported to the grid. Model these separately using your actual import contract and an available export offer.

The Smart Export Guarantee allows eligible generators in Great Britain to receive export payments. Solar installations can qualify up to 5 MW, subject to the scheme’s requirements. Payment rates and contract terms are set by suppliers, and payment is not automatic: an application and suitable metering are needed.

Confirm the certification evidence and metering required for your system size with the intended export supplier. Larger commercial systems should not rely on assumptions taken from a domestic tariff. Ofgem explains eligibility and supplier choice in its SEG guidance for generators.

A worked example

Consider a hypothetical system producing 45,000 kWh a year. The business uses 70% directly and exports the remaining 30%. For this illustration only, assume an avoided import cost of 25p/kWh and export income of 8p/kWh.

These figures are an example, not a REF Electrics quotation or a prediction for your premises. They exclude operating costs, finance, tax and future equipment replacement. They also show why multiplying all generation by the import price would overstate the benefit.

8. Test the full cost and financial return

Request a complete installed price. Check whether it includes design, scaffolding or access equipment, roof work, structural assessment, electrical upgrades, network costs, metering, monitoring, commissioning and handover.

Allow for insurance, inspections, maintenance, suitable cleaning where needed and potential inverter replacement. Ask what happens if the monitoring platform carries an ongoing charge or loses support.

Simple payback divides the initial cost by the estimated annual net benefit. It is a useful screening measure, but a longer cash-flow assessment should include changing generation, equipment replacement, finance costs and the value of money over time.

Ask to see a cautious case as well as the central forecast. What happens if electricity prices fall, consumption changes, generation is lower or the business moves premises? Avoid relying on a return that only works with optimistic price increases.

Tax treatment should be confirmed for your organisation. The VAT relief commonly discussed for domestic solar is limited to qualifying premises; it should not be assumed to apply to an ordinary commercial installation. Ask your accountant about VAT recovery and capital allowances, and check HMRC’s energy-saving materials guidance. Treat any grant as unconfirmed until eligibility and approval are established.

9. Assess battery storage as a separate investment

A battery can store surplus solar electricity for use later, but it is not essential for solar to work. A business using most generation immediately may have less to gain from storage than a site with substantial daytime surplus and evening demand.

Compare solar alone with solar plus storage. Include the additional cost, usable capacity, charging and discharging power, energy losses, operating strategy and warranty conditions. Avoid counting the same electricity as both exported and stored.

If backup power matters, specify it explicitly. Ordinary grid-connected solar is not a backup supply, and a battery does not automatically provide one. The design must identify protected circuits, isolation arrangements, available power and expected operating duration.

The Energy Saving Trust’s battery storage guidance explains the underlying principles. Commercial storage needs a design and financial assessment suited to the business.

10. Consider finance, insurance and installation disruption

Compare outright purchase with any lease, loan or power purchase agreement offered. With third-party arrangements, examine ownership, maintenance duties, annual price changes, early termination, sale of the building and end-of-term responsibilities. A lower initial payment should be assessed alongside the total contractual commitment.

Involve your insurer before approving the design. Agree the required approach to roof construction, electrical protection, access, fire safety and any proposed batteries. Rooftop PV can affect fire behaviour, so it belongs in the building’s wider risk assessment. The Building Safety Regulator has published research on rooftop solar and fire safety.

Plan deliveries, parking, scaffold positions, safe access and any electrical shutdowns around your operations. Establish how staff, customers and production areas will be protected and who will communicate changes to the programme.

11. Know what happens after installation

Ask for a handover pack containing system drawings, equipment details, warranties, relevant electrical certification, connection documentation, commissioning records and operating instructions.

Agree who will monitor performance and respond to faults. A silent monitoring alert is only useful if somebody receives it and acts on it. Review actual generation against the forecast, allowing for seasonal and weather differences.

Maintenance should suit the roof, equipment and environment. Access for inspection and cleaning should be planned from the start, rather than improvised after the array is installed.

Questions to ask before accepting a commercial solar quotation

• Which consumption data and future business changes informed this design?
• What roof checks and permissions are included?
• What generation, self-consumption and export assumptions have been used?
• What network approval is needed, and could its outcome change the price?
• Which equipment, access costs and electrical upgrades are included?
• Does the forecast include maintenance and likely replacement costs?
• What exactly do the product and workmanship warranties cover?
• Who handles monitoring, faults and aftercare?

Frequently asked questions

Do solar panels work on cloudy days?

Yes. Solar PV can generate electricity from daylight in cloudy conditions, although output varies and is generally lower than in strong sunlight. A useful forecast accounts for local weather and seasonal variation.

Can solar cover all our electricity needs?

It may cover a large share at some times, but that does not mean it will supply the business continuously. Overnight use, winter demand and short periods of high load still need to be considered. Assess the proportion supplied over time, not an assumption of complete independence.

Can a tenant install solar?

Potentially, with the necessary permissions and a suitable agreement. The lease term, roof ownership, maintenance access and end-of-lease responsibilities should all be resolved before committing.

Should we upgrade lighting before installing solar?

If a lighting upgrade is justified, assess it alongside solar and model the reduced electricity demand. The projects can complement each other, but their savings should not be counted twice.

How much will commercial solar cost?

The cost depends on capacity, roof construction, access, connection requirements and the equipment specified. A site-specific quotation is more useful than a generic price per panel.

Discuss solar for your business with REF Electrics

If you are considering commercial solar in Somerset or the South West, contact REF Electrics to discuss your premises and objectives. Have your recent electricity bills, site address and any planned changes to hand so the conversation can start with how your business actually operates.