Are Commercial Solar Panels Worth It?
A deep dive into the costs associated with commercial solar panels
Author
Harry Dexter | Operations Director
Table of Contents
Author
Harry Dexter | Operations Director
Table of Contents
Are Commercial Solar Panels Worth It?
With many UK businesses looking for creative means of reducing operating costs and future proofing against rising energy bills. Commercial roof top solar is a brilliant option for UK businesses.
Whilst many talk about how the cost of commercial solar is fully tax deductible the fact remains that businesses still need to pay the upfront cost of commercial solar before being able deduct this off their tax.
This leaves businesses asking how much do commercial solar panels cost? Within this blog we will look at some examples of our clients who have invested in commercial solar and the costs associated.
Tax Relief for Commercial Solar
Before looking at the costs it’s important to understand the tax relief available to UK businesses. The primary way is using your Annual Investment Allowance.
Within this you can deduct the full cost of solar panels, inverters, and installation equipment, up to £1 million per year, from your taxable profits.
You can read more about tax relief for UK Businesses in our blog – Solar Panel Tax Relief For UK Businesses.
Example 1 – Bill’s Business
For this example we are not going to use our client’s actual name or business, so we’ll call them “Bill’s Business”.
Bill approached us looking to install solar panels on his industrial unit in an attempt to lower his energy bills. Annually, Bill uses 79,141 kWh costing over £1500 per month.
Our team designed a 44 panel system that we installed on Bill’s industrial roof which is set to generate over 20,000kWh’s of energy each year. Once installed the system will reduce Bill’s energy bills to just over £1000 and generate over a quarter of Bills total energy supply.
The total system cost, including all scaffolding, labour and materials was £18,985. With the annual savings of £4,365 the system will recuperate Bill’s initial investment in just 4 years and over the next 20 years will save Bill almost £170,000.
Example 2 – Marks Manufacturing
Our client, lets call them Marks Manufacturing, reached out to us concerned about rising energy costs and wanted a solution to future proof their business against rising energy prices.
Marks Manufacturing had around 200 sq/m of roof space available on their commercial unit.
Our team put together a proposal for 48 solar panels, an inverter and battery that met the requirements for Marks Manufacturing energy usage.
The total system price for Marks Manufacturing was £22,275, which sounds chunky at first. But the savings and tax abilities made the system an extremely beneficial investment.
Firstly, Marks Manufacturing could write off 100% of their system cost through tax relief.
The system fitted is a total size of 20.64kW’s and will save Mark £5,865 in electricity bills every year.
The system generates 101% of Mark’s Manufacturing Energy usage on average every year, meaning that he now benefits from completely free electricity averagely across each year. To find out more about averaging free electricity you can read our blog Can I Get Free Electricity With Solar Panels?
The system will recuperate Marks Manufacturing initial investment in just 3 years and 7 months, and across the next 20 years save the business £210,468.
Minus the original investment of £22,275 this leaves Mark’s Manufacturing with a total net saving of £188,193.
Factors Affecting Price
There are many factors that will impact the price of a commercial solar system. These are key to consider when factoring in the examples above.
System Size
The available roofspace impacts costs considerably, whilst adding a few additional panels to a system doesn’t bring a massive cost there will be a significant difference in costs between a 200 sq/m rooftop like Mark’s and a 12 sq/m rooftop of a smaller unit.
Brand of Parts
There’s a significant difference between solar panel brands. Not only in price but also in generation levels and warranties. You can find out more about the differences in Solar Panel Brands in our blog – Which Solar Panels Are Best?
Type of Building and Roof
Another impact on cost for a commercial solar system is the installation location. The type of roof material will vary costs. This means that if you have a flat metal roof the cost’s will be different between this and a tiled roof.
Considering Commercial Solar?
Are you considering commercial solar panels? Our team can complete a free site survey and accurate quotation giving you a clear understanding of what the cost’s, savings and pay back period without any commitment from you.
Speak to our team today by calling 01903 953 854 or submitting a contact form below.
