With energy prices soaring and eco-regulations tightening every year, the allure of solar power for commercial buildings is stronger than ever, leading to the question on the minds of many business owners: “Are commercial solar panels worth the cost?”
Let’s take a look at the financial aspects of commercial solar panel installations, from their potential for savings, maintenance costs, and even their ability to create a new revenue stream by contributing excess energy back to the national grid.
So, whether you’re a small business owner or manage a large industrial facility, commercial solar power could have a notable effect on your operations and your electricity bill, not to mention get you away from relying on fossil fuels.
Let’s see whether they’re a worthwhile investment for you.
- Initial investment vs long-term savings
- Financial incentives and support for your commercial solar panels
- Finance options for commercial solar panels
- Leasing vs. Buying Outright
- Embrace commercial solar with Path Energy
Initial Investment vs Long-Term Savings
The initial investment of solar panel installation for a commercial building can be intimidating for many business owners, considering the cost of installing a solar panel system for an SME can range between £16,000 and £70,000 (depending on system size and energy needs).
While these figures may give some business owners pause, it’s important to view them in the context of more long-term financial benefits that solar panels offer. It’s also important to note that the upfront cost includes:
- The solar panels
- Installation fees
- Any additional equipment needed to get things going
Looking past the initial cost and into long-term savings potential, this is when it’s understood how much of a game changer solar panels can be
For example, a 30kW solar panel system can save an average of £5,200 annually on electricity costs. These savings come from the ability to generate your electricity and reduce your reliance on the ever-rising prices of the grid.
Over just a handful of years, these savings add up, offsetting that initial investment until it eventually helps you turn a profit on your bottom line.
What about maintenance costs?
It’s important to consider the potential maintenance costs when it comes to your commercial solar installation, but generally speaking, these costs are minimal. That’s because solar PV systems are renowned for their low upkeep requirements.
The routine maintenance largely involves keeping the panels clear of debris so they can efficiently take in the most amount of sunlight.
This low maintenance demand, alongside the system’s typically long lifespan (up to 25 years and more) means that after the initial payback period, your business can enjoy lower energy costs, better energy efficiency and increased savings for many years to come.
Financial incentives and support for your commercial solar panels
If those initial investment costs are still putting you off from considering commercial solar panels, there is more good news. Between tax incentives and government solar grants, commercial solar is more accessible than ever before.
For example, the Smart Export Guarantee (SEG) plays a major part in solar panel investment by compensating businesses for the excess power they generate and feed back into the grid. In this way, not only do solar solutions reduce energy bills, they become an additional revenue stream for your business.
Tax benefits for your commercial solar panels
Tax relief and capital allowances are another financial incentive for business owners to consider when it comes to installing commercial solar panels.
Some tax deductions allow you to write off a portion of the cost from your taxable income. This reduces the overall cost of your solar panel installations and speeds up the return on investment.
For example, businesses can take advantage of the Annual Investment Allowance (AIA) which allows them to deduct the full cost of qualifying plant and machinery – including solar panels – from their profits during the year of purchase.
These schemes lower the initial financial barrier to solar adoption whilst letting governments demonstrate their commitment to supporting renewable energy initiatives.
Financing options for commercial solar panels
Investing in commercial solar panels is a big decision, and figuring out how to finance this investment can be as important as choosing the panels themselves. Thankfully, businesses have several options to consider, each with its own set of benefits.
Power Purchase Agreements (PPAs)
Power Purchase Agreements, or PPAs, offer a unique way to adopt solar energy without the hefty upfront cost.
In a PPA, instead of buying the system, you agree to purchase the electricity generated at a predetermined rate, which is often lower than the utility price. This can lead to immediate savings on your energy bills without the financial burden of ownership.
At the end of the agreement, you might have the option to purchase the system at a reduced cost, continue the agreement, or have the panels removed.
Leasing vs. Buying Outright
Leasing solar panels is another way to avoid upfront costs. Similar to renting, you pay a monthly fee to use the solar energy system.
You enjoy the electricity it produces but the leasing company retains ownership, meaning you may miss out on certain incentives like tax credits.
On the other hand, buying your solar panels outright can be more expensive initially but offers greater long-term savings and benefits. You own the system, qualify for government incentives, and enjoy the full reduction in your energy bills.
Loans and other financing methods, such as green loans specifically designed for renewable energy projects, can also make purchasing more accessible by spreading the cost over time.
Each option has its advantages, depending on your business’s cash flow, tax situation, and energy needs.
Embrace commercial solar with Path Energy
The initial solar investment might seem like a lot at first glance. But when you factor in the long-term savings on energy bills, low maintenance costs, and potential revenue from government incentives like the Smart Export Guarantee, the picture starts to look a bit better.
When it comes to commercial solar energy for your business, think of Path Energy as your partner in solar panel installations.
Our premium solar panels for businesses provide years of clean, cheap energy, our solar battery storage service ensures continued power during outages, and optimisation tech boosts efficiency – all leading to cost savings and a sustainable future.
Experience the full spectrum of solar benefits and pave the way for a brighter, greener business journey with Path Energy!
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