Fancy a Payback Period of 0 Years for your Commercial Solar Panels?
- jonnyjetsetter
- 17 minutes ago
- 3 min read
Yes, we did say 0 years, nil years, absolutely no time. Possible? Well let’s look at the options.
The payback time for commercial solar panels in the UK typically ranges from 5 to 7 years, though it can be even shorter depending on the size of the system and energy usage patterns and vitally the efficiency of the panels and equipment chosen by your installer.
⚡ What Influences the Payback Period?
Several factors can affect how quickly a business recoups its investment:
System size: Larger installations often benefit from economies of scale.
Electricity usage: Higher on-site consumption means more savings.
Installation cost: Upfront costs vary based on panel type, roof structure, and installer.
Incentives:, tax relief (see Accelerated Capital Allowances), and the Smart Export Guarantee can reduce net costs.
Energy prices: Rising electricity rates can shorten the payback period.
🧮 Example Calculation
If a business installs a system costing £100,000 and saves £15,000 per year on electricity, the payback period would be:
£100,000 ÷ £15,000 = 6.7 years
This is a simplified example, but it gives a ballpark figure.
However, the best way of ensuring that the payment period is dramatically reduced is to have a commercial solar installation by reputable commercial solar installers but not pay for it as Capital Expenditure.
Possible? Very much so.
The vehicle to achieve this is Power Purchase Agreement (PPA). This is a contract between a power producer and a power purchaser for the sale and purchase of electricity.
Key Features of a PPA:
Long-Term Agreement:
Typically lasts 10 to 25 years.
Provides financial predictability for both parties.
Price Structure:
The agreement outlines how the electricity will be priced—either fixed, escalating, or variable based on market rates or inflation.
Type of Power:
Applies to renewable energy (solar, wind, hydro).
Roles:
Seller (Producer): Often a commercial solar installer.
Buyer (Offtaker): A business, or large power consumer which agrees to purchase the power.
Delivery Terms:
Specifies how and where the electricity will be delivered (e.g., on-site or offiste).
Ownership:
The energy buyer typically does not own the system; they just buy the electricity it produces.
Example Scenario:
A solar developer installs solar panels on a company's roof and signs a PPA with the company to sell the electricity generated at a lower rate than the grid.
Benefits:
For Buyers:
Cost savings
Renewable energy access
Price stability
For Sellers:
Guaranteed revenue stream
Easier project financing (banks like PPAs)
In essence, we the commercial installer installs a solar installation for you. We know how much that costs us and from that we know how much the cost of generating each kW of electricity of a fixed period. During that fixed period we contract to sell that electricity generated from the solar panels at a fixed cost with small amount of indexing of the set period. You as the consumer of this green electricity can:
1) immediately demonstrate a reduction in CO2 emissions
2) keep your capital expenditure for investing in your business
3) are free from maintaining a solar installation
4) can enjoy fixed energy costs rather than variable costs
This is an example; we would be delighted to offer your business a specific example showing the benefits of a commercial solar installation via a Power Purchase Agreement. If you would like this option FOC, please contact us today:
Telephone –
London: 020 3026 1856
Norwich: 01603 975321
Alternatively email:
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