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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 20–27p per kWh, while 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.
EXAMPLE 1 — SMALL CAFÉ, 10KW SYSTEM
System cost: £14,000 | Annual generation: 8,500 kWh
Annual saving on electricity bills: £1,700 – £2,100
AIA tax saving in year one (25% CT): £3,500
Payback period (after tax relief): 5–6 years
EXAMPLE 2 — OFFICE, 20 STAFF, 20KW SYSTEM
System cost: £25,000 | Annual generation: 17,000 kWh
Annual saving on electricity bills: £3,400 – £4,200
AIA tax saving in year one (25% CT): £6,250
Payback period (after tax relief): 4–5 years
EXAMPLE 3 — SMALL WAREHOUSE, 30KW SYSTEM
System cost: £32,000 | Annual generation: 25,500 kWh
Annual saving on electricity bills: £5,100 – £6,400
AIA tax saving in year one (25% CT): £8,000
Payback period (after tax relief): 3–4 years
Savings calculated at 22p per kWh avoided grid cost. 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. Individual results will vary depending on your energy use pattern, roof orientation, and local conditions.
If you’d like to know more about how installing solar panels could help you and your business, contact an OVO expert today.