Are Commercial Solar Panels Worth It?
The environmental benefits of commercial solar panels are obvious. But what other advantages do they carry? And are there any drawbacks? Read our guide to find out more about whether commercial solar panels are suitable for your business.
We could all do with being greener when it comes to our energy. And that’s even truer of businesses than it is of domestic households.
One potentially energy-efficient avenue for domestic and business consumers alike are solar panels. But when it comes specifically to commercial solar panels in the UK, are they worth it?
Below we take a look at how commercial solar panels work, what kind of planning permission you might need, and how much they cost.
How do commercial solar panels work?
Photovoltaic (PV) solar panels convert sunlight into electrical energy, which can then be used to power your business.
Not only that, if you are based in Great Britain, you can potentially also sell the energy you generate to the National Grid, thanks to the Smart Export Guarantee (SEG), while in Northern Ireland, you can sell excess power your solar panels generate to Power NI.
The only real difference between domestic and commercial solar panels is scale, and even that isn’t necessarily always the case.
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Do I need planning permission for solar panels on commercial buildings?
In most cases, you do not need planning permission for solar panels on commercial buildings. It is important to check first, however, before you find yourself making a costly mistake.
Even if you do not need planning permission, you will still need to meet certain requirements and limits. These include rules around how far solar panels can stick out from the wall or roof they are installed on, and the distance from the edge of the wall or roof.
The full list of requirements and limits for England and Wales can be found at the government’s Planning Portal website here. For more information on planning rules in Scotland, visit ePlanning Scotland, while for Northern Ireland contact NIdirect.
It is also important to note that you may need to get permission from your landlord or the freeholder of the building before installing the commercial solar panels.
Commercial solar panel installation explained
Depending on the size of your commercial property, there will be a number of different steps to the installation process before you get to fixing on the panels themselves.
First, due diligence will need to be carried out to make sure that your building can actually support the solar panels themselves.
Your energy usage, and your aims when it comes to renewable energy, may also be evaluated, to help decide on the best course of action to take.
Then blueprints and proposals will need to be drawn up that are suitable for the exact specifications of your business and the commercial building in question.
Once the proposal is approved, the solar panels will need to be constructed and physically installed. How long this takes will depend on the size of the building. For a smaller property this could be weeks; for a larger building, it might be a matter of months. You should factor in some disruption to your regular business activities, including temporary power outages.
Next is arguably the most important, and final, stage: the commissioning phase. This is when the installer confirms that the commercial solar panels have been fitted correctly, and electrical checks are carried out. If all is OK, your installer will then contact your district network operator to ensure that your system will be connected to the electricity network.
How much do commercial solar panels cost in the UK?
This is the big question: cost. And there’s no simple answer.
How much commercial solar panels will cost depends on the size of your commercial building, the level of kilowatt output it requires, and which company you choose to install the panels. This means the solar panels alone can range anywhere between £8,000 and £74,000 for small- to medium-sized businesses.
You’ll also need to factor in VAT, and the costs of the installation itself, which can run into the thousands, depending on the size of the installation.
But when thinking about cost, you also need to consider how much money you will save once they are installed. Although it may take a while to recoup the upfront installation costs – commercial solar panels are a long-term investment – overtime, you should hopefully end up in the green.
What starts as a few pence per kilowatt hour can add up to hundreds and thousands of pounds in savings per year.
Breaking even will be accelerated if you are eligible to benefit from a Smart Export Guarantee tariff, and can sell your energy to the grid.
Pros and cons of commercial solar panels
Before purchasing commercial solar panels, it is important to weigh up their advantages and disadvantages, and how they might apply to your business.
Benefits of commercial solar panels
Some of the key advantages of installing solar panels at your business premises include:
- saving money on your business electricity bills each year
- reducing some of the stress of energy price crises, as you are less reliant on external energy suppliers
- making your business greener and more energy efficient
- the opportunity to create a new revenue stream by selling the excess electricity your PV panels generate
- potentially boosting the value of your commercial property
Disadvantages of commercial solar panels
However, you should be aware of the following when it comes to commercial solar panels:
- It can take years before you recoup the upfront costs for solar panel installation.
- You will need a smart meter installed at your commercial building to be able to export energy.
- You will need a large amount of space to install the solar panels, meaning it might not be viable for every business.
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Connor is a writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and The Independent. Read more