Are Solar Panels Worth it for British Businesses?
Rising costs are probably putting your business under increasing strain. While a solar panel installation isn’t a magical solution, it can help you to reduce your operating costs, highlight your unique green credentials and improve profitability.
In this post, we’ll highlight some of the key factors that British businesses need to consider when deciding to purchase or lease commercial, agricultural or industrial solar panels.
Can Solar Panels be Claimed as a Business Expense?
Although a solar installation can be a considerable investment, the UK governments Capital Allowances programme provides additional commercial incentive to buy your solar panels now rather than later.
What are the Main Advantages of Solar Energy for Businesses?
Switching to solar panels brings direct benefits to your business, such as reduced electricity bills and benefits that impact the environment in a positive way.
Lower Electric Costs
Investing in solar panels means you can lock in your electricity costs and reduce your exposure to grid supplied price rises again. At current market prices, a solar system can deliver electricity at a rate of approximately 5p per kWh. When you consider that standard electricity charges are 34p per kWh (as of October 2022), it’s a no-brainer!
Lower Carbon Emissions
Investing in renewable energy, such as solar, means we can collectively reduce our reliance on fossil fuels and nuclear energy. This in turn means your business will have a smaller carbon footprint.
Improved Brand Image
Solar panels visibly demonstrate your business’ eco-friendly commitments and show that you’re living your Corporate Social Responsibility (CSR) values. Environmental impact increasingly drives consumers’ shopping habits and companies that improve their green brand image will have a better competitive edge in the longer term.
Creates New Jobs
The British solar power industry is growing and as a result, new job opportunities are opening across various disciplines, including solar panel manufacturing, installation and maintenance.
Are Businesses Required to Pay VAT on Solar Panels?
The 2022 Spring Statement’s reduced VAT charges on installing energy-efficient systems, including solar panels only applies to residential installations. Businesses are still required to pay 20% VAT but can reclaim the VAT paid on their solar panel installation through their usual quarterly returns. Instead, businesses can benefit from the Capital Allowances scheme.
Will Solar Panels be Cheaper in the Years to Come?
Although the cost of solar panels has fallen considerably since 2010, it’s difficult to predict what will happen to prices in the medium-to-long term.
Demand for solar panels is higher than ever. This increased demand, coupled with the rising cost of raw materials and, of course, energy costs, increased solar panel prices in 2021/22. Whether prices continue to rise remains to be seen.
Despite the higher prices for panels, investing in a solar panel system now makes sense as you’ll fix your electricity prices for the foreseeable future.
Are Solar Panels a Good Business Investment?
While there’s no single figure for solar installation, a typical commercial solar panel system could range from £75,000 to £100,000 for a 100 kWp system, which is not a small chunk of change.
Many commercial solar PV systems can break even within 5-6 years, such as engineering manufacturer, Quickgrind, who installed a 194.04 kWp solar PV system. This system was initially forecast to break even within 4.9 years.
So, despite the substantial upfront cost, the reduced electricity charges, the potential to sell surplus energy, and protection from electricity price rises make solar power attractive for many businesses.
The Best Time of the Year to Get Solar Panels for Your Business
Installing a solar PV system shouldn’t significantly impact your business’s operations, so you won’t need to wait for a lull. However, as solar panels are installed outside, the weather plays a big part in when they can be installed safely and efficiently. In the summer, you’ll likely face a long waitlist as everyone probably had the same idea, and summer heat may not be the ideal conditions.
Spring can be a great time to install a solar PV system as the weather is usually more suitable for rooftop work and your system will be ready in time for the peak sunshine-filled summer months. However, there are a number of permissions required before commencing a commercial installation, and these can take some months. Couple this with installation lead times once an order has been placed, then you should be planning at least 6 months ahead if you have an installation timeframe in mind.
Explore Our Solar Solutions
Mypower has years of experience designing and installing solar panel systems for clients across all sectors, including agriculture, industrial and commercial. With no moving parts, well designed solar PV systems using quality products rarely need post installation support, however, at Mypower we provide asupport service for our clients with any warranty claims, technical issues or questions. Get in touch with our friendly team today for more information.
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