Is solar worth it for a small business?
The price you pay for each kWh sets what each kWh of solar saves. Smaller users pay more (DESNZ):
Business electricity prices by annual use, April to June 2026, pence per kWh including CCL, excluding VAT (DESNZ, provisional)
| Annual use | Price per kWh |
|---|---|
| Up to 20 MWh (very small) | 38.4p |
| 20 to 499 MWh (small) | 28.6p |
| All business users (average) | 24.5p |
- Good fits: Shops with chillers and lighting open through the day, workshops with tools and compressors, offices, salons, practices and small food businesses.
- Harder fits: Businesses that use most of their power in the evening or overnight, such as a takeaway that opens at five. A battery can help, at extra cost.
- The test: Whether you would use most of what the panels make. Twelve months of bills, or half-hourly data if you have it, answers that.
More: commercial solar payback and cutting business energy costs.
Small systems: what 10 to 30 kW does
PVGIS, the European Commission's solar tool, gives about 968 kWh a year for each kW of panels facing south at 35 degrees in Birmingham (PVGIS). Further north it is less, further south more, and east-west roofs make less per kW.
Example: What a small system makes in a year, Birmingham, south at 35 degrees
10 kW: about 9,700 kWh
20 kW: about 19,400 kWh
30 kW: about 29,000 kWh
Compare that with your annual use on your bills.
PVGIS estimates with 14% system losses. Your survey uses your own roof, angle and shading.
If a 10 kW system would make more than you use in daylight, the extra is exported at an export tariff, worth much less than what you pay. Size to your use, not your roof. See commercial solar system sizes and how much solar you need.
Renting your premises
Most small businesses rent. Solar is still possible, with a few things agreed in writing first:
- Landlord consent: Written consent for the installation. Grant schemes ask for it too (Three Rivers District Council's grant does, for example).
- Who owns the panels: Whether they stay yours, pass to the landlord, or are removed if you leave.
- The lease length: How long is left, against how long the system takes to pay back.
- Repairs and the roof: Who maintains the panels and what happens when the roof needs work.
Source: Three Rivers District Council. Lease clauses and green leases in detail: solar on a leased building.
Single-phase and three-phase supplies
Smaller premises sometimes have a single-phase supply, like a house. That decides the connection route (ENA, NIE Networks):
Connection routes by supply
| Supply | Up to 16 A per phase (G98) | Above that |
|---|---|---|
| Single-phase | 3.68 kW: the installer connects and notifies | G99: apply to the network operator first |
| Three-phase | 11.04 kW: the installer connects and notifies | G99: apply to the network operator first |
A bigger system on a single-phase supply may be allowed with an export limit, or the supply can be upgraded through the network operator. The survey checks your supply and fuse rating. More: grid connection for business solar.
Paying for it
- Cash and tax relief: The Annual Investment Allowance lets a business deduct up to £1 million a year of qualifying spending from its profits (GOV.UK). See capital allowances.
- Green loans: The British Business Bank says green loans from banks and other lenders typically fund things like renewable energy and green buildings, and advises shopping around and getting independent financial advice (British Business Bank).
- Leasing or hire purchase: Spread the cost over the system's early years; who owns the panels differs between them. See paying for commercial solar.
- Local grants: A few councils have open grants, such as Three Rivers in Hertfordshire. See solar panel grants for businesses.
You are in good company: in the British Business Bank's 2025 survey, 29% of medium-sized businesses had already installed on-site renewable energy and 13% planned to (SMEs and Net Zero 2025).
Sources
DESNZ table 3.4.2, PVGIS, NIE Networks, the British Business Bank and Three Rivers pages read on 3 November 2026; the ENA guidance on 2 November 2026.
- DESNZ: Gas and electricity prices in the non-domestic sector (table 3.4.2, Q2 2026 provisional)
- European Commission JRC: PVGIS 5.3 (Birmingham, 1 kWp, south at 35 degrees, 14% losses)
- ENA: G98, G99 and G100 application guidance (G98 up to and including 16 A per phase)
- NIE Networks: connecting generation (3.68 kVA single-phase, 11.04 kW three-phase under G98/NI)
- British Business Bank: Green loans for small businesses
- British Business Bank: SMEs and Net Zero 2025 (UK Net Zero Business Census)
- GOV.UK: Annual Investment Allowance (£1 million)
- Three Rivers District Council: Solar PV and Battery Grant (landlord consent required if you rent)
Frequently asked questions
Are solar panels worth it for a small business?
They can be, if you use most of your electricity in daylight. Small users pay more per unit: DESNZ's provisional figures for April to June 2026 put the smallest business users (up to 20 MWh a year) at about 38.4p per kWh including the Climate Change Levy, against a 24.5p average. Every kWh of solar you use yourself saves that price. If most of your use is in the evening or at night, the case is weaker.
What size solar system does a small business need?
Usually something between 10 and 30 kW for a shop, small unit or practice, but it depends on your daytime use, not the size of the roof. As a guide, PVGIS gives about 968 kWh a year for each kW of south-facing panels in Birmingham, so 10 kW makes around 9,700 kWh a year there. A survey sizes it from your own bills or half-hourly data.
Can I have solar if I rent my premises?
Yes, with your landlord's written consent, and it helps to agree in writing who owns the panels, who maintains them and what happens if you leave. Grant schemes ask for it too: Three Rivers District Council's business solar grant, for example, requires landlord consent if you rent.
Does a single-phase supply limit solar?
It changes the paperwork more than the possibility. Up to 16 A per phase (3.68 kW on single-phase) the system connects under G98 and the installer notifies the network operator. Larger systems connect under G99, which normally means applying first, and the operator may set an export limit. Some sites upgrade to three-phase; the survey checks what you have.
How can a small business pay for solar?
Cash with capital allowances (the Annual Investment Allowance covers up to £1 million of qualifying spending a year), a green loan from a bank, leasing or hire purchase, or a local grant where one is open. The British Business Bank's guide says green loans to SMEs are typically for things like renewable energy and green buildings, and advises shopping around.
Related pages
- System sizesRoof area, output, cost and the rules that change by size, from MCS at 50 kW to grid and planning thresholds.
- Solar on leased propertyTenants need landlord consent and enough lease left; landlords can install and sell the power, or lease the roof.
Commercial solar costIllustrative prices per kWp by system size, extra costs, running costs, VAT and tax.
Solar paybackA worked payback example for a 100 kWp system, the factors that move the result most, the effect of tax relief, and a calculator to try your own figures.- RetailSeven-day trading and refrigeration make retail a strong match for solar. The survey covers roofs, car park canopies, customer safety and tenant and landlord arrangements.