Posted:
This article was last reviewed on 1 July 2026. Electricity rate references are correct at that date and will be updated in line with market changes.
If you run a small business in the UK and own your premises, solar panels are certainly worth looking at. The financial case is stronger than most small business owners realise, and the grants and tax incentives available mean the real upfront cost is often much lower than the headline price.
This guide covers everything you need to know about solar panels for small businesses in the UK: what systems cost, what you'll save, which small business grants for solar panels are available right now, and how to work out whether it's right for you and your business.
Quick Answer:
Solar panels for a small UK business typically cost £13,000–£35,000 installed. Most SMEs save £3,000–£8,000 per year on electricity. With the Annual Investment Allowance reducing your effective cost by 25% in year one, payback is usually 4–6 years.
Are solar panels worth it for a small business in the UK?
Almost always, if you own your building and operate during the day. Here's why the numbers work better for small businesses than for homes.
One of the reasons commercial solar stacks up so well financially is self-consumption. A business that operates during the day uses electricity as it's generated, which means more of every unit produced goes directly towards reducing your bill. For most daytime-operating businesses, self-consumption runs at 80–90%. Any surplus gets exported to the grid through the Smart Export Guarantee, where OVO offers some of the best export rates available.
That difference is why payback periods for solar panels on small business premises are typically 4–6 years, compared to 7–12 years for a home. And once the system has paid back, the electricity it generates is effectively free for the remaining 20+ years of its life.
Grid electricity for SMEs currently costs between 20p and 27p per kWh depending on your contract and supplier, correct at 1 July 2026. Solar-generated electricity works out at roughly 4–5p per kWh over the system's lifetime. That gap is where your savings come from.
How many solar panels does a small business need?
The right system size for your small business depends on two things: how much electricity you use during the day, and how much roof space you have available.
A useful starting point: every 1kW of solar capacity needs 5–6m² of roof space and generates around 850kWh per year in a typical UK location
| Business Type | Annual electricity use | Recommended system | Panels needed | Approx installed cost |
|---|---|---|---|---|
| Salon or small shop | 6,000 – 8,000 kWh | 8 – 10kW | 16-20 panels | £13,000 – £15,000 |
| Café (open daytime) | 8,000 – 12,000 kWh | 10 – 15kW | 20-30 panels | £13,000 – £20,000 |
| Dental practice or clinic | 10,000 – 15,000 kWh | 12 – 16kW | 24-32 panels | £15,000 – £22,000 |
| Small retail unit | 12,000 – 18,000 kWh | 15 – 20kW | 30-40 panels | £18,000 – £30,000 |
| Office (10–30 staff) | 15,000 – 20,000 kWh | 18 – 22kW | 36-44 panels | £20,000 – £30,000 |
| Small warehouse / trade counter | 20,000 – 30,000 kWh | 25 – 30kW | 50-60 panels | £22,000 – £38,000 |
Sizes and costs are indicative. OVO's free commercial survey uses your actual energy data and roof details to design a system precisely matched to your business.
You don't need to cover your entire roof. Matching the system to your daytime use is usually more important than maximising panel count. A larger system than you can use just means more electricity exported at low rates.
How much can a small business save with solar panels?
Savings depend on how much electricity your business uses during daylight hours and what you currently pay per unit. Here are three scenarios for typical small businesses in the UK.
| Small cafe 10kW | Office 20 staff 20kW | Small warehouse 30kW | |
|---|---|---|---|
| System cost | £14,000 | £25,000 | £32,000 |
| Annual generation | 8,500 kWh | 17,000 kWh | 25,500 kWh |
| Annual bill saving | £1,700 to £2,100 | £3,400 to £4,200 | £5,100 to £6,400 |
| AIA tax saving (25% CT) | £3,500 | £6,250 | £8,000 |
| Payback after tax relief | 5 to 6 years | 4 to 5 years | 3 to 4 years |
Savings calculated at 22p per kWh avoided grid cost, used as a mid-range estimate for small commercial electricity contracts. Commercial electricity rates are not set by Ofgem's domestic price cap and vary by contract — your actual rate may be higher or lower. SEG export income based on OVO's export rate and an estimated 10% export of annual generation, as daytime businesses typically self-consume 80 to 90% of what they generate. AIA saving based on 25% corporation tax rate. Figures correct at 1 July 2026. Individual results will vary depending on your energy use pattern, roof orientation, and local conditions.
Grants for small businesses: what's available in 2026
The UK Shared Prosperity Fund closed on 31 March 2026, which was the main route for commercial solar grants. But there's still meaningful financial support available depending on where your business is based.
The Annual Investment Allowance is the most universally available benefit. It lets you deduct the full cost of your solar system from your taxable profits in the year of installation. At 25% corporation tax, a £20,000 system saves you £5,000 in tax in year one, with no application and no eligibility criteria beyond being a UK business.
For a full breakdown of what's available in your area, see our guide to commercial solar panel grants UK
Do small businesses need planning permission for solar panels?
In most cases, no. Solar panels on commercial buildings are permitted development in England, Scotland, and Wales, which means you don't need to apply for planning permission.
There are exceptions worth knowing about.
- Listed buildings always require planning permission for solar panels on any elevation visible from a public road.
- Conservation areas may restrict panels on roof slopes facing a highway.
- Panels that significantly alter the appearance of the building or extend beyond the roof line may fall outside permitted development.
OVO confirms permitted development eligibility as part of your free commercial survey. If planning permission is required, we can advise on the process.
What about the DNO application?
All solar panel systems need to be formally connected to the grid through your Distribution Network Operator (DNO). For most small business systems, this is a G99 application, which OVO submits on your behalf as soon as your system design is agreed.
G99 applications typically take 6 to 12 weeks to approve. OVO manages the entire process and all communication with the DNO. You don't need to be involved directly.
Should a small business add battery storage?
Battery storage makes most sense for businesses with significant out of hours electricity use, or those that want to reduce their grid dependency further. For a typical daytime operating business with 80 to 90% self consumption, a battery adds cost without dramatically improving the return.
The exception is businesses that want to protect against grid outages, charge electric vehicles overnight, or shift consumption to avoid peak tariff rates. If any of those apply to your business, battery storage is worth factoring into your quote.
Frequently asked questions
Can I get solar panels on a leased commercial property?
It depends on your lease terms. You'd need your landlord's written permission and would need to agree who owns the system and benefits from the savings. Some landlords are open to this, particularly if the energy cost savings benefit the building value. OVO can advise on the typical arrangements during your survey.
Do solar panels work in the UK climate?
Yes. Solar panels generate electricity from daylight, not direct sunshine. UK panels typically generate around 850kWh per kWp per year, which is enough to make the financial case work even in Scotland and the North of England. South facing roofs at 30 to 40 degrees pitch generate the most, but east and west facing installations are still viable.
Can a small business get 0% finance for solar panels?
OVO offers finance through Tandem Bank, which lets you spread the cost of your solar installation with no upfront payment. Combined with the AIA tax saving in year one, this makes it possible to manage cash flow effectively while still benefiting from lower energy bills from day one.
How long do commercial solar panels last?
Most commercial solar panels come with a 25 year performance warranty and typically last 30 years or more. OVO's installations come with a 10 year workmanship warranty on top of the manufacturer's product warranty.
What happens if I sell my business premises?
Solar panels add to the value of commercial property and are generally seen as a positive asset by buyers. Any remaining finance would need to be settled on sale or transferred by agreement. The panels themselves transfer with the building.
Ready to find out what solar would save your business?
Every business is different. The best way to understand what a solar system would generate, save, and cost for your specific premises is to talk to OVO's commercial team directly. We'll use your actual energy data and roof details to give you a straight answer, with no commitment required.
Frequently asked questions
Do I need planning permission for solar panels on my business premises?
In most cases, no. Commercial rooftop solar falls under permitted development rights, so you can go ahead without applying to your local council. Listed buildings and conservation areas are exceptions. OVO's free survey covers your planning position as standard.
Does my installation need to be MCS certified?
Yes. All commercial solar installations must be carried out by an MCS certified installer to qualify for Smart Export Guarantee payments and to meet industry quality standards. Every OVO commercial installation is MCS certified as standard.
What is the Annual Investment Allowance and how does it work for solar?
The Annual Investment Allowance lets you deduct 100% of your solar installation cost from your taxable profits in year one, up to a £1 million cap. At the main 25% corporation tax rate, that's a saving of £1 in every £4 you spend. It applies to limited companies, partnerships and sole traders. Confirm your position with an accountant before making a claim.
Can I get solar panels if I rent my business premises?
It's possible but you'll need your landlord's written consent and ideally a lease with at least 10 years remaining to make the investment worthwhile. Some landlords are open to it, particularly if you can show the panels add value to the property. It's worth having the conversation.
What happens to electricity I don't use?
Any surplus electricity your business generates but doesn't use on-site is exported to the grid and paid for under the Smart Export Guarantee. You'll need an MCS certified installation and a smart meter to qualify. OVO offers SEG payments and can advise on the best rate for your business.
How long do commercial solar panels last?
Most commercial panels carry a 25 to 30 year performance warranty. Inverters typically need replacing after 10 to 15 years. Beyond that, the system requires very little maintenance and continues generating electricity well beyond the warranty period.