A complete guide to solar power for business
Commercial solar panels can make a real difference to your business. Whether you're looking for a more energy-efficient alternative to cut your energy bills or want to be a more sustainable business to attract customers away from your non-green competitors, solar could be an option.
But, before you decide on solar power, you’ll need to make sure that this is the right renewable energy option for you. After all, how do you know whether this is going to be the best long-term investment for your business?
In this guide, we’ll explore the advantages and disadvantages of solar power, how many solar panels your business will need, and some of the best schemes available that can help you invest.
What are solar panels?
Solar panels — sometimes known as PV or photovoltaic panels — consist of many individual cells that are made from layers of semiconducting material — most commonly silicon.
When light shines on the panels, a flow of electricity is created that can then help to generate power in your business.
How do solar panels work?
All solar panels will generate direct current (DC) electricity. Because households and businesses use alternating current (AC), an inverter will be installed along with the system to easily convert DC electricity into AC and generate power for your business.
Typically, each solar panel generates around 200 - 350W of energy in strong sunlight. And, although the UK is famed for its grey skies, the cells don’t need direct sunlight to work and can even generate power on cloudy days, making it a key part of our UK energy mix.
Many businesses decide to invest in battery storage as a solution to help combat the loss of solar energy. Essentially, this means that your business has a place to store any excess solar energy that is generated by your system during the daytime — and is available for use when the sun has gone.
What’s the difference between PV and thermal energy?
While the concept of PV and thermal energy is the same, they both provide energy for different purposes.
Solar PV panels use sunlight to generate electricity whereas thermal systems are used directly for heating water or air. Both panels can be installed and fitted onto the side of your building.
Is solar energy reliable enough for my business?
Solar energy can be one of the most reliable sources of natural energy that you can use to power your business. Although it will depend on its location and the amount of sunlight that your building typically gets — it’s still a great, greener energy source.
As you would expect, solar energy is most effective in the summertime when the days are longer and there tends to be a lot more sun available for electricity generation.
However, that doesn’t mean that you won’t reap the benefits of solar energy in the winter months. Instead, this just means that your reliance on solar energy should be reduced as we experience darker days and worse weather conditions.
What are the different types of solar panels?
There are several different types of solar panels — with some being more efficient than others — that you can install on your roof. However, the most commonly installed panels are either monocrystalline or polycrystalline panels.
Monocrystalline is the purest form of solar panel. They’re usually recognisable from their uniform dark colour and rounded edges. Monocrystalline panels are produced from one large block of silicon which is then cut into wafer formats.
Advantages of monocrystalline panels
- High purity silicon means these panels have one of the highest efficiency ratings of 15 - 20%
- They require the least amount of space for installation
- They’re less affected by weather compared to other options on the market
Disadvantages of monocrystalline panels
- Performance decreases as temperatures increase
- Most expensive type of solar panel due to their high efficiency and the quality of the silicon that’s used
Polycrystalline panels are made by melting raw silicon — which is a faster and cheaper process compared to monocrystalline panels — and are usually distinguishable by their blue-speckled appearance.
Advantages of polycrystalline panels
- Polycrystalline panels have an efficiency rating of 13 - 17%
- They’re a cheaper alternative due to the melted fragments of silicon that form wafers
- Due to their high-temperature tolerance, polycrystalline panels will generate more electricity over the year
Disadvantages of polycrystalline panels
- They have a lower efficiency rating compared to monocrystalline panels
- Although they’re more temperature tolerant, they can still be sensitive to higher temperatures to a greater degree. This means they’re more likely to have a shorter lifespan.
How many solar panels would my business need?
Every solar project is different. However, there are several determining factors that are specific to your business that will influence how many solar panels you’d need:
- Electricity consumption — How much energy your business consumes is a big deciding factor in how much electricity you use. Generally, most solar panel suppliers will review your existing energy consumption through your bills, half-hourly data, or any other consumption data. This typically tends to be in the total Kilowatt-hours (kWh).
- The size of your roof — This is a key factor as it determines the number of panels that can be installed on your roof. It’s also important to consider your roof stability: whether it can withstand the weight of the panels and how they’ll be angled.
- The hours of sun in your area — The amount of energy that solar panels can generate is dependent on the hours of sunlight you get in your area. The varying amount of hours of sunlight in the UK will affect the number of solar panels that you’ll need.
- Site complexities — If your site is hard to reach, it’s more than likely that it may require more labour hours.
It’s important to remember that the best solar panel systems aren’t the largest, but the ones that are the most efficient.
What are the advantages of solar power for my business?
Commercial solar panel energy offers a wide range of benefits for businesses — both large and small. As energy costs begin to rise, putting your roof space to good use can be a sensible decision. Some of the benefits solar panels can have on your business include:
- Solar income — Ideally, you’d like to use all of the solar power that you generate on-site. However, any additional surplus power can be sold back to the grid.
- Lower carbon footprint — Generating your own solar energy will significantly reduce your company's carbon footprint.
- Better Corporate Social Responsibility (CSR) — As well as actively being better for the environment on its own merit, solar panels can serve as a demonstration of your business’s commitment to environmental causes. As customers are increasingly making greener choices when they shop, solar panels are great for boosting your Corporate Social Responsibility.
- Cost savings — Solar panels generate free and green electricity during the daytime that can be used on-site. This lowers your business’s demands for energy from the grid and potentially saves you thousands of pounds on your energy bills in the long run.
- Reduce dependence — Reduce your area’s dependence on imported energy and finite resources.
- Improves your energy security — Being less reliant on the National Grid, means that your business is less vulnerable to power cuts and other outages. Storing electricity on-site means that you give your business a supply to fall back on, should this be needed.
What are the disadvantages of solar power for my business?
While solar power can be a great thing, just like most energy options, it also has its disadvantages.
- Initial high up-front cost — Although solar panels can save you money in the long term, they have an initially high up-front cost. However, this does include paying for the solar panels, inverter, wiring, batteries and installation.
- Uses lots of space — The more electricity you want to produce, the more panels you’re going to need. And, with more solar panels comes the need for more space on your roof.
- Solar storage can be expensive — If you’re running a 24-hour operation, chances are you’re going to need an energy supply that runs around the clock. Solar energy has to be used right away, or it can alternatively be stored in large batteries — which can be extremely expensive to upkeep.
- Dependent on clearer weather — Although solar power can be collected during rainy and cloudy days, the efficiency of the power that you’ll receive will drop. Solar panels are dependent on sunlight to effectively gather and store solar energy, so, on days when the weather isn’t so bright, you’ll see a noticeable difference.
How much do solar panels cost?
As with all solar panels, it’s hard to make a generalisation about cost as a range of factors go into pricing. Typically, however, commercial solar panels can cost anything between £9,500 - £51,000 for a small to medium-sized business.
Excluding VAT, and depending on the system size you require, it could cost your business:
|System Size||Average Cost|
(Figures correct as of February 2023)
Depending on where your business is located in the country and the system size you’ll need, a small to medium-sized business will use between 30,000 - 50,000 kWh of electricity a year.
Are there any grants available for commercial solar panels?
There are a number of government initiatives that can help you invest in solar panels. It’s a good idea to research if you’re eligible to apply for any of these funding options before you invest in commercial solar energy.
Feed-in Tariffs (FiT)
The Feed-in Tariffs (FiT) scheme was a government programme designed to promote the uptake of low-carbon and renewable energy technologies.
Barring some expectations, the FIT scheme closed to new applicants from April 1st 2019. It was replaced by the Smart Export Guarantee (SEG) scheme in January 2020.
Smart Export Guarantee (SEG) scheme
A replacement for the Feed-in Tariff (FiT) scheme, the Smart Export Guarantee (SEG) scheme means homes and businesses with renewable technology installed can earn money by selling surplus energy back to energy suppliers.
Your business will be eligible so long as it has installed renewable or low-carbon technology, including solar photovoltaic (solar PV), wind, micro combined heat and power (micro-CHP), hydro, and anaerobic digestion (AD). You'll also need to have a smart meter or half-hourly meter installed so automatic readings can be sent back to suppliers.
The rates you'll get for the energy you sell back will depend upon your supplier. All licensed energy suppliers with more than 150,000 customers - which includes all the big ones like British Gas, EDF Energy, Octopus Energy, ScottishPower, and SSE - must offer an SEG tariff.
Enhanced Capital Allowances
The Enhanced Capital Allowances (ECA) scheme aims to encourage businesses to invest in more efficient technologies. Your business can then claim 100% tax relief. This means you can deduct the whole cost, or up to the published claim value of the energy-saving product against your taxable profits.
A lease-purchase agreement allows you to rent out your energy equipment and pay for it via any income that’s earned through subsidies.
Once the total cost has been paid, you’ll then take full ownership of the systems.
Renewable Heat Incentive (RHI)
Almost all renewable energy technologies are covered under this incentive. It provides financial support for businesses that are looking to install a renewable heat option.
People who join the scheme and stick to its rules will receive quarterly payments for seven years for the amount of clear and green renewable heat that their system is estimated to produce.
However, the Domestic RHI closed to new applicants in Great Britain on 31 March 2022.
Why solar power is a smart investment for your business
Investing in a renewable energy source for your business can be a smart and exciting move — but it will require a lot of thought and planning. While it isn’t a straightforward process, the benefits that you’ll receive in the long term — as well as the positive impact this will have on the plant — can mean all the more.
To discover more about renewable energy, head over to our energy guides page. Or, if you’re thinking of switching energy suppliers, get in touch with the Bionic team today to discuss your business energy needs, including business electricity and business gas and compare quotes from more than 20 trusted UK energy suppliers.