If you’re new to commercial solar, you probably have a few questions, one being the financial commitment that comes with it. It’s important to understand how much money will need to be invested into a project like this. Here, we aim to highlight commercial solar installation costs, including the cost of solar farms.

Commercial solar energy is a renewable energy source that businesses can use to generate electricity. It can be installed on the roofs of commercial buildings or on the ground. They can be used to power a variety of commercial properties, including offices, factories, warehouses, and retail stores.

As you may be aware, there is a growing need for businesses to become more sustainable,, especially with the Net Zero initiative, also known as ‘Build Back Greener’, which is an initiative set by the government that has put together policies and proposals that will decarbonise all sectors of the economy by 2050.  

By being a part of the Net Zero initiative, businesses will also become compliant with the non-domestic minimum expected energy standards (MEES), requiring all commercial properties to have an EPC rating of C by 2027,  and ultimately, a rating of B.  

What influences the cost of installing commercial solar?

The amount of solar panels needed

The size of your property or the building on which solar panels will be installed will depend on how much money you need to set aside for panels. Inevitably, the bigger the building is, the more panels you will need, or the larger these panels will need to be.  

The size of the solar system

The solar panel size will also determine how much money needs to be invested to cover costs. Again, the bigger the solar system, the more expensive it will be.  

You may also need to take into account the cost per acre of your land if you’re investing in a solar farm.

The type of solar panels chosen to be installed

You’ll also need to take into consideration the different types of commercial solar panels available, research the different types, and know which ones will benefit your commercial building the most. The different types of solar panel systems that you can include:

• Monocrystalline solar panels are made from a silicon crystal that is cut into wafers. They are the most efficient solar panels for residential use, with an average efficiency of 17–22%. So, it is most likely that your commercial building will not install monocrystalline solar panels. At their highest price point, these solar panels sit at  £1 – £1.50 per Watt.  

• Polycrystalline solar panels are made by melting silicon and pouring it into moulds. They’re also known as multi-crystalline panels. Polycrystalline solar panels work best on commercial buildings, so they may be a great option for your commercial building, with an efficiency of 15-17%. They are generally priced at around 90p per Watt.  

• Thin-film solar panels are made by layering thin layers of photovoltaic material, such as amorphous silicon, cadmium telluride, or copper indium gallium selenide. Due to their lower manufacturing costs, they are typically the least expensive option (usually between 40 and 80p per Watt)  and are mostly used for commercial buildings as they need a lot more space to be able to generate enough energy for the building.  

• Bifacial solar panels capture sunlight on both the front and back of the panel, making them more efficient than traditional panels. Because bifacial solar panels are able to generate energy using both sides of the panels, they inevitably generate more sustainable energy and are also suitable for commercial buildings with flat roofs.  

The complexity of the installation process will determine the amount of money you’ll need to put aside.  

Other factors such as the location of the building will also play a part in deciding the cost of the installation. If your commercial building is situated in a sunny area, you may not need as many panels, for example.  

Additional services or equipment needed

If you need to invest in any further services, you’ll need to take that into account, too. Extra services can include services such as maintenance, storage and cleaning.  

Commercial solar installation cost breakdown

Once you’ve decided on the type of solar panel you want to have installed, you’ll need to consider other costs involved, such as:  

• Inverters convert the DC electricity generated by the panels into usable AC electricity and have an average lifespan of 10 to 15 years. Replacing inverters will cost you an average of  £500 to £1,500.  

• Mounting systems can range from £600–£2,500, with an average cost of around £1,550.  

• Maintenance and operational costs range from £100-£300 and include cleaning fees and annual services.  

• Permitting and inspection fees include planning permissions and building regulations, which include a plan check (averaging at £178) and an inspection fee (£367).  

Financing the cost of installing commercial solar on buildings and solar farms

You may already be aware that there are different financing options available to you that will help you in being able to install solar panels for your commercial business. Here at Sustain we offer a number of different investment options, such as:  

Power Purchase Agreement (PPA)  

A power purchase agreement (PPA) is a financing arrangement that allows a business to install solar panels on its property without paying for the panels upfront. Instead, the business agrees to buy the electricity generated by the panels at a fixed rate over a set period of time.

So, you’ll lease the roof space to a third party who sells the power generated to you at a lower rate than the grid would. This third party will also maintain and upgrade the system, officially owning the panels. These agreements usually last around 25 years.  

Solar panel leasing  

If you decide to lease solar panels, you’ll find yourself in a similar situation as when entering into a PPA, with the only difference being that you lease the solar panels from a third party.  

Asset finance

Here, a financial institution will provide you with the finance needed to install the solar panels. The money your business will make by saving on energy costs will automatically make up for the money you’ll need to repay with this option.  

Hire purchase

With this option, you’ll make an initial deposit on the solar panels, with subsequent fixed monthly payments until they’ve been paid off.  

Finance lease

With a finance lease, you’ll pay monthly rentals for the solar panels and will be able to choose to buy them at the end of the lease, extend the lease, or return them.  

Operating lease  

An operating lease is a short-term option where you pay to use the solar panels, and then return them at the end of the lease.  

Business loan  

Alternatively, you can apply for a loan to finance the solar panels.  

PACE financing  

This option is tied to the property, so you can transfer it if you sell the property. There are no upfront costs, and you repay the loan through property taxes over 10-20 years. However, PACE programs aren't available in all areas, and the assessments create a lien on your property.  

Grants  

The government also offers grants for businesses wanting to install solar panels with many local councils offering support, for example:  

• UK Shared Prosperity Fund

• The Net Zero Grant Programme

• Chamber low carbon programme

So, as you can see,  there are numerous different costs associated with installing commercial solar panels. But, there are also many different ways in which you can finance the installation of your commercial solar panels. This definitely makes it easier to implement greener energy in your commercial property, playing your part in reaching the Net Zero initiative.  

For more information on commercial solar installation costs, be sure to get in touch with our team of experts at Sustain Commercial Solar on 0333 880 0891.  

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