The Financial Case

The Commercial Electricity Problem

UK commercial electricity prices have risen significantly over the past decade, and unlike domestic consumers, businesses have no price cap protection. Many commercial properties are now paying between 25p and 30p per kWh — and the historical trend is clear: the long-run direction of commercial electricity prices is upward.

For any business with substantial roof space, this creates a straightforward opportunity: generate a proportion of your electricity on site, use it directly in your operations, and stop paying the grid rate for every unit you consume.

How Commercial Solar Works

Solar panels mounted on your roof convert sunlight into DC electricity. An inverter converts this to the AC electricity your building uses. During daylight hours, your building draws from the solar array first, then from the grid only for any shortfall. At night, or when generation is insufficient, you draw from the grid as normal.

The result is a significant reduction in the number of units you purchase from your supplier — and therefore a direct reduction in your electricity bill.

The Three Sources of Financial Benefit

1. Self-consumption saving

Every unit of electricity your system generates and your business uses directly saves you your full grid unit rate. At the current commercial reference rate of 27.7p per kWh, each 1,000 kWh of self-consumption saves £277 per year — every year for the life of the system.

2. Export income

Electricity generated but not used on site is exported to the grid. Under the Smart Export Guarantee (SEG), you receive a payment for every unit exported. The best current SEG rates available to commercial operators are approximately 12p per kWh. Export income is lower per unit than self-consumption saving, which is why maximising on-site use is the priority in system design.

3. Inflation hedge

Once installed, the cost of solar electricity is essentially fixed for the life of the system — the panels generate for 25+ years with no fuel cost. Every percentage point rise in grid electricity prices increases the value of your system's generation. UK commercial electricity prices rose an average of 11% per year between 2010 and 2023. A solar installation locks in a significant portion of your electricity cost at today's price, permanently.

An Illustrative Example — 50 kWp System, Kent

For a business with a suitable roof in the South East of England, a 50 kWp commercial installation is a realistic starting point for a mid-sized commercial property.

What Drives the Actual Saving at Your Business?

The figures above are illustrative. The actual annual benefit at your premises depends on four variables specific to your business:

• Your electricity tariff — businesses paying above the 27.7p reference rate save proportionally more per unit
• Your consumption profile — a business operating Monday to Friday during daylight hours will self-consume more of its solar generation than one operating nights or weekends
• Your roof area and orientation — usable south-facing roof area determines system size; size determines generation
• Your location — the South East of England is one of the highest-irradiance regions in the UK, with a generation yield typically 15–20% above the national average