Grants for Business Solar Panels

Business and commercial solar panels

Investing in solar panels is an easy decision for most businesses to make. Not only does the government pay you for the energy you generate, you also protect your business from rising energy bills.

Many businesses across the UK turn to solar as a solid investment as the government Feed-in tariff offers an index linked 8-13% ROI over 20 years.

The panels themselves should last for about 50 years, providing you with half a century of free energy.

Solar panels also significantly cut your carbon footprint demonstrating your green credentials to employees, investors and the community.

How will my business earn money from solar PV

Thanks to a government incentive call the Feed-in tariff, you earn money through three ways if you install solar panels.

Feed-in tariff rate – 14.9p/kWh
Firstly, the government pays you for the electricity you generate and use, this typically add ups to about £400 per year for an average 3kW panel. The Feed-in tariff is tax-free, index-linked and lasts 20 years.
National Grid sell back rate – 4.64p/kWh
The government also pays you for the electricity you produce but don’t use. This gets sold back to the grid and will earn you about £60 per annum.
Savings on energy bills
You will also save on your energy bills because the electricity you use when your panels are in use is free.

This should save you about £100 a year. On top of this, you are helping the environment by not using as much carbon.

It is important to realise that the FiT varies depending on the size of the system you want to install. For commercial solar, the larger the system, the lower the FiT. However, the cost of the solar panels also decreases, so the ROI should not change that much.

To find out exactly how much your business could earn and save from solar panels contact one of our specialists by filling out the form above.

Is my business eligible for the feed-in tariff?

Anyone who installs solar PV panels is eligible for the FiT. However, the installer and panel must be MCS accredited else the government will not pay any money out.

It is important to receive quotes from a couple of installers before accepting an offer and we recommend using an impartial comparison service like this site offers.

How much do business solar panels cost?

The cost of installing solar panels on your business premises will depend on the size of the solar panels needed to generate enough energy for your business needs. A small business may only need a 4kW system, similar to a residential property. This should cost on average, around £7000. If you have a larger office building you could consider a 10kW system, which will set you back around £20,000. A business with a large, energy dependant building, such as a warehouse, could even consider a 25kW system, costing an average of £50,000.

Whichever solar panels you choose, you should gather quotes from at least 3 qualified installers in order to make an informed decision. Your business should be able to see a healthy return on investment from any sized solar panels, thanks to the savings on energy bills and the FiT. However, be aware that some larger installations may not be eligible for FiT after 22nd July 2015 and the entire FiT is being reviewed in September 2015. Therefore, if you want to secure cheap energy bills and tax-free payments for your business for the next 20 years it is advisable to act as soon as possible.

How much will the business make?

The main way that your business will make money from solar panels is through dramatically reduced energy bills. Solar panels do not store energy, meaning that you can only use solar power during the day when the panels are able to instantly convert sunlight into electricity. This works perfectly for most businesses who only use electricity during daylight hours. We suggest that residential houses can save around 50% on their energy bills. This is because they will still be reliant on grid energy through the evening and overnight. As a business you could potentially save even more than that as you will only be reliant on the grid during very cloudy weather and when your energy usage outweighs the solar panel’s maximum output.

Your business will also receive payments from the FiT. The way that the FiT works is that you are paid a generation tariff for all of the energy you produce, you are then paid an additional export tariff for any energy you sell back to the grid. Without a Smart Meter on the premises it is assumed that you sell 50% of the energy produced by any solar panels under 30kW back to the grid. This is because they believe a normal household will only use about 50% of the energy produced by their panels over the day.

As a business you could take advantage of this loophole as it is likely that you will actually use 100% of the solar energy produced over the day, yet you could still get paid for exporting half of it.

Tax implications

Small business solar panels come under the same rules as residential ones. This means that any FiT payments are tax-free for the entire time they are paid. The only time that tax would have to be paid on solar panel income is if you created a solar farm where the sole purpose of the panels was to generate a profit. If the solar panels are providing your business with power as their main purpose then you will not have to pay tax on any incentives offered through them.

What size does my business need?

The solar panel size your business needs really depends on the size and nature of the company and the premises. If you have a relatively small building with regular office needs you may only require a 4kW system, which will be between 10-20 panels. However, if you have a larger, energy heavy business then you will need considerably larger solar panels to meet your needs.

For example, last year two hospital buildings in Birmingham installed a 250kW solar panel system to combat rising energy prices. The system comprised of around 2000 solar panels and is expected to generate about £2 million over the next 20 years in energy savings and FiT payments, which will be fed back into the hospitals to help improve services.

If you are unsure what size solar panels you will need to fit your business purposes, get in touch with local installers who can advise you, using the form at the top.

Spread the Word!