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Commercial Solar Panels

Commercial solar panels are large-scale solar energy systems designed for businesses, factories, warehouses, offices, and other commercial buildings.

They capture sunlight and convert it into electricity, enabling businesses to reduce energy bills and lower carbon emissions.

Purchasing solar panels for your business requires a significant upfront investment in hardware and installation, but they can pay for themselves by generating free electricity for decades.

This guide provides an independent assessment of whether solar panels are a worthwhile investment in 2025. Here’s what we cover:

• How do commercial solar panels work
• Components of a commercial solar system
• Differences between commercial and residential solar panels
• Why should a business use solar panels
• Commercial solar panel configurations
• Commercial solar panel types

How do commercial solar panels work

Commercial solar panels generate renewable alternating current (AC) electricity, directly replacing power from a business electricity connection through the following three steps.

1. Solar absorption

Commercial solar panels are typically installed on a roof or empty land, tilted in a south-facing direction to maximise sunlight exposure.

Solar panels are made from semiconductor materials that convert light energy into an electrical current.

The panels generate direct current (DC) electricity, with the output varying with the intensity of sunlight they receive.

2. Inverter

Commercial solar panels are wired in series to combine the direct current output from all panels. This collective output is then fed into a solar inverter.

The inverter converts the electricity generated by the panels into a stable alternating current (AC) power supply, which can be safely used as an alternative to the power supplied by the local grid.

3. Power Distribution

The output from the inverter flows into a mains distribution board, where it can be allocated to different electrical circuits:

• Direct on-site use – Power is used by devices such as lighting, computers, and other equipment currently operating.
• Battery storage – If an energy storage system has available capacity, any unused power can be stored for later use.
• Export to the grid – Excess electricity can be exported back to the grid using a Smart Export Guarantee tariff or a corporate PPA.

Components of a commercial solar system

Here are the five key components of a commercial solar panel system:

• Photovoltaic cells – Panels that convert sunlight into electricity, typically mounted on a rooftop.
• Mounting and racking – Used to secure the solar panels in place at an angle that optimises sunlight exposure.
• Inverter – A device that converts power produced by the cells into usable alternating current (AC) electricity.
• Batteries (optional) – Store excess solar energy for use during low sunlight hours or peak pricing periods.
• Smart meter – A smart energy meter that measures solar production, on-site consumption, and exports to the grid.

Differences between commercial and residential solar panels

The technology used in commercial and residential solar panels is similar. However, the main differences in setup arise due to the larger scale of a commercial solar panel installation.

The table below summarises the key differences between typical commercial and residential solar panels:

Why should a business use solar panels

Purchasing and installing a commercial solar system requires a significant upfront investment, but it can deliver a strong return on investment over time.

This section outlines the key reasons why businesses should consider installing commercial solar panels.

Reduce business electricity unit charges

All business energy contracts include a unit charge for each kWh of electricity consumed, and business electricity prices per kWh typically make up the largest portion of commercial energy bills.

In contrast, power generated from solar panels only requires sunlight, providing a cost-free alternative to mains electricity.

💡 At Business Energy Deals, we specialise in helping businesses eliminate unnecessary energy costs with our business energy comparison service.

Reduce business electricity standing charges

The output from commercial solar panels enables businesses to reduce their reliance on the grid connection.

Business electricity standing charges scale with the capacity of your connection to the local grid and can be particularly expensive for large commercial sites. Businesses with a large solar panel installation and a solar battery system can request a reduction in their Maximum Import Capacity from their Distribution Network Operator.

Find out how to reduce your Maximum Import Capacity in our guide to maximum demand charges.

Reducing peak-time energy costs

Large business energy customers typically pay for their electricity using a multi-rate business electricity tariff, which includes peak and off-peak unit prices.

A commercial solar panel and battery system can be used strategically to eliminate power consumption from the grid during peak times.

An Energy Management System (EMS) optimises energy usage by applying the following logic:

• Peak periods – Prioritises energy consumption from both solar panels and solar batteries to minimise reliance on the grid.
• Off-peak periods – Prioritises charging solar batteries for use during later peak periods.

Sell excess electricity

Commercial solar panels can provide an additional source of revenue for businesses.

When solar panels generate more power than is required on-site, the Smart Export Guarantee scheme allows businesses to export excess electricity to the grid, selling it back to a business energy supplier.

Government incentives

The UK government encourages businesses to invest in commercial solar by offering an upfront deduction to corporation tax through the following schemes:

• Annual Investment Allowance (AIA) – The purchase of solar panels can be included in the AIA, providing a 100% deduction against corporation tax in the year the costs are incurred.
• First Year Allowance (FYA) – If a business has already fully utilised the AIA, the FYA can be claimed for investments in commercial solar panels, enabling a 50% upfront corporation tax deduction.

Reduced carbon emissions

The electricity generated by commercial solar panels relies on a renewable energy source, the sun, making it an entirely carbon-neutral power source.

In contrast, the national grid depends on gas power stations to generate electricity, producing harmful carbon emissions. Therefore, commercial solar panels help reduce the carbon footprint of business operations.

Larger businesses must include their carbon emissions in their public annual reporting, so investing in solar panels can enhance their green credentials.

Generating REGOs

Commercial properties with solar panels can generate Renewable Energy Guarantees of Origin (REGOs) for each MWh of electricity they produce.

REGOs registered with Ofgem can be sold to energy suppliers that need to validate their green business energy tariffs.

Find out how in our guide to generating and selling REGOs.

Are commercial solar panels worth it?

Commercial solar panels are a long-term investment that can bring considerable benefits to businesses.

An upfront investment in commercial solar panel costs (and associated VAT on commercial solar) will pay for itself through long-term energy cost reductions and environmental benefits.

In this section, we summarise the two principal reasons why solar panels offer a strong long-term investment opportunity for businesses.

Solar power at scale

The return on investment for a large commercial solar system is significantly higher than that of an equivalent domestic installation.

Commercial properties have the space for a large number of panels, allowing power to be generated at scale.

Additionally, costs such as purchasing the inverter and paying for installation do not increase proportionally with system size, making larger installations more cost-effective.

Lifetime of commercial solar panels

Solar panels are long-term investments that can generate electricity for over 40 years, degrading at a rate of only 0.5% per year.

Other components, such as the inverter and solar batteries, typically need replacing every 10 to 15 years.

The upfront investment in a solar installation should provide businesses with long-term power, protecting them from future energy price rises.

Commercial solar panel configurations

Commercial solar panels require a large, sunlight-exposed area for the array to be mounted.

Here are the three most popular configurations used by businesses in the UK:

Rooftop solar panels

Rooftop solar panels are ideal for warehouses, factories, and schools, which typically have large flat roof surfaces.

On a flat roof, panels are mounted at an optimal tilt angle to maximise exposure to sunlight.

Businesses with a south-facing sloped roof can mount panels flush with the roof surface.

Ground-mounted solar panels

Businesses with unused open land often choose ground-mounted solar panels.

Ground-mounted solar panels are easier to maintain compared to roof-mounted systems but come with the drawback of occupying space that could otherwise be utilised for other purposes.

These systems typically require the preparation of concrete foundations, making installation more expensive.

Solar canopies over carparks

Solar canopies allow car parks to serve as locations for solar panels while also providing covered parking for employees and customers.

This is a common option for corporate offices and universities with large car parks.

Commercial solar panel types

In this section, we explain the three most common types of solar panels businesses use.

Monocrystalline solar panels

Monocrystalline solar panels are the most efficient type currently available on the market, with a lifespan of up to 40 years. However, they also have the highest cost per panel.

These panels are the most popular option for businesses with a budget for investing in high-quality equipment.

Polycrystalline solar panels

Polycrystalline panels offer a more affordable option that is viable for businesses where space is not a restriction.

These panels are approximately 30% less efficient than monocrystalline panels but around 20% cheaper per panel.

Thin film solar panels

Thin-film solar panels are a lightweight and versatile alternative for businesses.

They perform better in partially shaded environments and areas with sub-optimal sunlight exposure, such as vertical surfaces.

However, the peak efficiency of thin-film solar panels is significantly lower than that of polycrystalline and monocrystalline panels.

Commercial solar panel sizes and output

Standard monocrystalline and polycrystalline solar panels used by most UK businesses have the following specifications:

• Surface area – 2.0 x 1.0 metres
• Thickness – 2 – 5 centimetres
• Weight – 20 – 30 kg
• Max power output – 400W to 600W
• Expected UK power output – 1.5 – 2 kWh per day

Alternative options exist for bespoke solar installations, such as solar canopies. However, the specifications above provide businesses with the most cost-effective £/Watt solution.

How many solar panels do I need for my business?

Two key factors typically determine the number of solar panels a business can install:

• Available space – How much space does your business have for solar panels?
• Energy consumption – What is the maximum amount of generated power your business can use on-site?

The optimal number of panels is the lower of these two figures. Below, we describe how to estimate each.

The approach outlined below provides a high-level estimate. However, we recommend consulting a professional commercial solar specialist to assess both factors accurately. This typically involves a site visit, taking into account local weather conditions and the business’s energy consumption profile.

Available space

Available space is the most common limiting factor in a commercial solar panel installation.

A standard commercial solar panel requires approximately 2 square metres (21.5 square feet) of space.

We recommend calculating how many solar panels your commercial property can accommodate using the dimensions above.

Electricity consumption

Assessing how much solar power your business can utilise each year is important. While it is possible to export excess electricity back to the grid, the rates received under the Smart Export Guarantee are significantly lower than those available through our business electricity comparison service.

This means the optimal commercial solar setup should produce approximately the same amount of power that is consumed on-site.

Here is an approximate calculation for determining the optimal number of standard solar panels:

Annual business energy consumption on-site in kWh ÷ Expected annual power output per standard panel (500 kWh)

Using this calculation, a small business energy customer consuming 15,000 kWh per year would require 30 commercial solar panels.

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