Renewable energy for small businesses

What actually changes when the site is small

The Department for Business and Trade counted 5.7 million private sector businesses in the UK at the start of 2025. Of those, 5.68 million were SMEs, 99.85 per cent of the total, and only 8,335 businesses employed 250 or more people. Almost all published guidance on commercial renewables is written for that last group, and very little of it transfers cleanly to a single small site.

At small scale the binding constraints change. You have one meter rather than a portfolio. The roof is 200 to 1,000 square metres, so the array lands between 30 and 150 kWp rather than in the megawatts. Nobody in the business has energy in their job title, so a project competes for the finance director's attention with stock, vehicles and payroll. And in a great many cases the roof belongs to a landlord.

One fact governs the economics more than any other. A unit you generate and consume yourself is worth what you would have paid to import it, currently 25 to 45p per kWh on UK commercial supplies. A unit you export is worth 4 to 15p under the Smart Export Guarantee. That gap is roughly five to one, so the design question is never how much roof you have. It is how much of your own generation you can use during the working day.

• One supply point, so one grid application and one tariff to model against
• Roof area, not demand, often sets the ceiling on system size
• Design, scaffolding, connection and commissioning cost much the same on a 30 kW job as a 300 kW one, so they weigh far more per kWp
• No in-house energy manager, so the feasibility work has to be done for you and written down
• Capital is genuinely scarce, which makes the funding route as important as the technology

The order a small project runs in

The sequence is fixed, and skipping a step produces the quotes that collapse at survey. It starts with twelve months of bills and consumption data. Many smaller supplies are still settled on estimated profiles rather than half-hourly meter data, which hides the daytime shape of your load. That is changing, with the market-wide half-hourly settlement programme passing 50 per cent of meter points migrated in August 2026, but where the data does not yet exist a fortnight of logging on the incoming supply gives the same picture.

Next comes the roof. Sheet type, age, remaining life, purlin spacing and fixing method decide whether an installation is straightforward or expensive. Asbestos cement sheeting, which could lawfully be installed until white asbestos was banned on 24 November 1999 and so may be present on any unit built or re-roofed before 2000, is always fragile and cannot be relied on to bear weight, and the Health and Safety Executive records falls through fragile materials as the largest single cause of death in roof work. It does not rule solar out, but it changes access, cost and sometimes the answer.

Then the electrical survey and the grid application, which is the step most likely to change a project. G98 covers generation up to 16 A per phase, meaning 3.68 kW on single phase and 11.04 kW on three phase, and is notified to the distribution network operator after the work. Everything larger falls under G99. Up to 50 kW on three phase there is a simplified application route; above that you submit a full application, and the network operator can refuse it or make it conditional on reinforcement you would have to fund.

Planning follows. Rooftop solar on a non-domestic building in England is normally permitted development under Class J, provided equipment does not protrude more than 0.2 metres beyond the plane of a pitched roof, does not sit more than 1 metre above the highest part of a flat roof, and is not installed within 1 metre of the external edge. Microgeneration is defined in law as up to 50 kW of electrical capacity, so above 50 kW you apply to the local planning authority for a determination on whether prior approval is required for design, external appearance and glare.

Installation, commissioning and certification close the sequence. An MCS certificate is what allows a system up to 50 kW to register for the Smart Export Guarantee, so confirm it before contract rather than after.

Sizing a 30 to 150 kW roof, with the arithmetic shown

Three numbers carry most of the sizing. One kWp of panels needs roughly 5 to 6 square metres of usable roof, produces about 900 to 1,000 kWh a year in the UK, and costs £600 to £1,300 per kWp installed. Small systems sit in the upper half of that cost band, because the fixed elements do not shrink with the array.

As a modelled scenario, take a light engineering unit on a three phase supply using 60,000 kWh a year, importing at 28p, with about 300 square metres of clear south-facing roof. That supports a 50 kWp array producing 45,000 to 50,000 kWh a year at an installed cost near £50,000. Because output and demand both peak in the working day, self-consumption lands mid-range in the 55 to 85 per cent band, say 70 per cent. That is 33,600 kWh displaced at 28p, worth £9,408, plus 14,400 kWh exported at 5p, worth £720.

Gross return is a little over £10,000 a year against £50,000 spent, which reads as five years. We quote six. Inverter replacement falls due between years ten and fifteen, inspection and cleaning cost money, and no roof is perfectly clear. A six year payback against a 25-year panel performance warranty is a strong case that does not need optimistic assumptions to reach.

A battery lifts self-consumption into the 80 to 95 per cent band. In the same modelled scenario, moving from 70 to 88 per cent shifts about 8,640 kWh a year from 5p export to 28p avoided import, worth roughly £1,990. Against a 30 to 50 kWh battery at small-site prices that is a twelve year payback on its own, which is why we say it plainly: at this scale storage rarely justifies itself on self-consumption uplift alone. It earns its place when it also provides resilience through an outage, shaves a peak that is driving a capacity charge, or exploits a time-of-use contract.

The floor matters as much as the ceiling. Below roughly 30,000 kWh a year of electricity use, fixed costs take too large a share and payback stretches past ten years. Ofgem's microbusiness threshold of 100,000 kWh a year is a useful marker: a site near the top of that band is comfortably in scope, and a site near the bottom needs checking before anyone mentions panels.

• 30 kWp: roughly 150 to 180 square metres of roof, 27,000 to 30,000 kWh a year
• 50 kWp: roughly 250 to 300 square metres, 45,000 to 50,000 kWh a year, and the largest size using the simplified G99 route
• 100 kWp: roughly 500 to 600 square metres, 90,000 to 100,000 kWh a year, a full G99 application and a planning prior approval determination
• 150 kWp: roughly 750 to 900 square metres, and usually a site with spare three phase capacity or an export limitation scheme

Paying for it: allowances, grants and the zero-capex route

The Annual Investment Allowance is the route that matters. It gives a 100 per cent deduction against taxable profits in the year expenditure is incurred, capped at £1m a year. At small-business scale that cap is irrelevant; the binding constraint is how much taxable profit you have to set it against. Solar panels are designated special rate plant by HMRC, so any cost not relieved through AIA is dealt with in the special rate pool, where the writing down allowance is 6 per cent a year on a reducing balance; a company spending above the cap should confirm with its accountant whether a first year allowance is available on the balance before assuming the pool rate.

What the deduction is worth depends on where profits sit. Up to £50,000 of profit, corporation tax is 19 per cent, so £50,000 of AIA saves £9,500. Above £250,000 the main rate is 25 per cent, and between the two, marginal relief produces an effective 26.5 per cent on each additional pound, making the same claim worth £13,250. Both thresholds, and the allowance itself, are shared between companies under common control.

Two smaller points are worth getting right. Commercial installations are standard rated for VAT at 20 per cent, because the zero rate on energy saving materials covers residential accommodation and buildings used solely for relevant charitable purposes, not business premises. A VAT registered company reclaims it, so the effect is cashflow, but a business trading below the £90,000 registration threshold carries it as real cost. Against that, eligible plant used in onsite renewable generation and storage is exempt from business rates until 31 March 2035, with nothing to apply for.

The named grants a small business can realistically use are narrow. The Workplace Charging Scheme covers up to 75 per cent of the purchase and installation cost of EV chargepoints including VAT, capped at £500 per socket for installations completed from 1 April 2026 and 40 sockets per applicant, and it closes on 31 March 2027. The EV infrastructure grant for staff and fleets has closed; it stopped accepting installer claims on 26 May 2026, which leaves the Workplace Charging Scheme as the only OZEV route still open to an ordinary small business. In Scotland, the SME Loan Scheme lends up to £100,000 interest free with cashback of 75 per cent up to £20,000 for efficiency measures and up to £10,000 for renewable heat, though solar PV is not on its eligible measures list.

What is not available matters too. The Industrial Energy Transformation Fund closed to new applications in July 2025 with no successor planned, the Public Sector Decarbonisation Scheme is restricted to public sector bodies, and the Boiler Upgrade Scheme in England and Wales does reach business premises the owner occupies, paying £7,500 towards an air source or ground source heat pump on individual systems up to 45kWth, but nothing comparable exists for larger commercial plant. If a quote leans on a grant, ask which scheme, which window and which eligibility test.

For funding rather than tax relief, three routes cover most small projects. Asset finance secured on the equipment spreads cost over five to seven years, and where payback is shorter than the term the savings can exceed the repayment from month one. The Growth Guarantee Scheme supports facilities up to £2m with a 70 per cent government guarantee to the lender, which helps when a thin balance sheet is the obstacle. Where there is no capital at all, a power purchase agreement puts a funder's money on your roof: they own and maintain the system, you buy its output at an agreed rate below your import price, typically over 10 to 25 years. You give up the capital allowances, the business rates position, the export income and a good deal of flexibility, and you sign something that will outlast most business plans.

Reporting, leases and the questions buyers now ask

Most small businesses sit outside the mandatory reporting regimes, and it is worth knowing that for certain rather than assuming it. Streamlined Energy and Carbon Reporting applies to large companies and LLPs, and since the company size thresholds were uplifted for financial years beginning on or after 6 April 2025 that means meeting two of three tests: turnover of more than £54m, a balance sheet total of more than £27m, or 250 or more employees. A qualifying company using 40,000 kWh or less can report as a low energy user, though it must still say so in the directors' report.

The Energy Savings Opportunity Scheme catches organisations with 250 or more UK employees, or turnover above £44m together with a balance sheet above £38m. The Phase 4 notification deadline for the Environment Agency is 5 December 2027. The trap for smaller firms is group membership: if one UK entity in your corporate group qualifies, the group is in scope.

If you lease your premises, minimum energy efficiency standards matter more than either. Since 1 April 2023 a landlord has been prohibited from continuing to let non-domestic property rated below EPC E, not merely from granting a new lease, unless a registered exemption applies. Government's interim response proposes that from 2031 privately rented buildings over 1,000 square metres in England and Wales reach EPC B where cost effective, and confirms that the previously proposed interim EPC C milestone for 2027 will not be taken forward. Nothing beyond the existing EPC E standard is in force, and the position for smaller properties has not been settled. Most SME premises fall under that threshold, which makes this a conversation with a landlord rather than a compliance emergency.

The pressure that actually reaches small firms arrives through tenders. A larger customer inside SECR or ESOS needs its own supply chain figures and increasingly asks suppliers for annual kWh, tonnes of CO2 equivalent, and what has been installed. Being able to answer with a number and a date is the practical reason many small businesses start.

On contracting, protections have improved. Ofgem defines a microbusiness as one using no more than 100,000 kWh of electricity or 293,000 kWh of gas a year, or having fewer than 10 employees with turnover or a balance sheet total no greater than £2m. Since 1 October 2024 suppliers must show broker fees in non-domestic contracts, and from December 2024 they may only work with brokers signed up to a redress scheme when securing Small Business contracts. Businesses under 50 employees with turnover no more than £6.5m or a balance sheet no more than £5m can take unresolved complaints about a supplier or a broker to the Energy Ombudsman.

Where the numbers do not work

There are sites where the answer is no, and it is cheaper for everyone if that comes at assessment rather than after a survey.

None of these is permanent. A shaded roof can be revisited when a neighbouring building changes, a low-consumption site when a process is electrified, a short lease when it is renewed. What they are is a reason not to spend the money this year.

• Annual electricity use below roughly 30,000 kWh, where fixed project costs swamp the savings
• A load that runs at night or at weekends while the roof generates on weekday afternoons, unless storage or a shifted process closes the gap
• A lease with fewer than seven or eight years left and no agreement with the landlord about what happens at the end
• A roof due for replacement inside five years, where the sensible sequence is roof first and panels second
• Fragile or asbestos cement sheeting where safe access costs more than the array itself
• Heavy shading from adjacent buildings, or a roof that only faces north
• An incoming supply with no spare capacity, where the network operator quotes reinforcement that dwarfs the project
• A company with no taxable profit, where AIA has nothing to relieve and asset finance or a power purchase agreement is the better structure

Fitting solar into the other six technologies

Solar is one of seven technologies we work across, and at small-business scale the order you take them in matters more than any single choice.

The sequence we recommend to most small businesses is efficiency, then solar, then EV charging if there are vehicles, then storage once the export data is measured, then heat at the point existing plant needs replacing. Taking them in that order stops you sizing generation to a demand you were about to remove.

• Energy management and efficiency: site-wide, £2,000 to £100,000, about 3 years, cutting 8 to 25 per cent of consumption. Always first, because every unit removed is a unit you never have to generate
• Commercial solar PV: 30 kW to 2 MW, £25,000 to £1.5m, about 6 years. At SME scale the realistic band is 30 to 150 kW
• EV charging: 7 kW to 350 kW, £3,000 to £150,000 or more, about 5 years, and still covered by the Workplace Charging Scheme until 31 March 2027
• Battery storage: 30 kWh to 1 MWh, £20,000 to £500,000, about 7 years. Best added after solar, once the export shape is measured rather than modelled
• Heat pumps: 30 kW to 1 MW thermal, £30,000 to £750,000, about 8 years, running at a coefficient of performance of 3 to 4. Best timed to the end of a boiler's life
• PPA and procurement: any scale, no capital outlay, funder-owned. The route when capital is the blocker rather than the case
• Wind and CHP: 5 kW to 500 kW, £40,000 to £1m or more, about 9 years. Rarely the right first move on a small urban site

How we assess a small site

We start with a free, no-obligation assessment: twelve months of consumption data, a look at the roof and the incoming supply, and a straight conversation about the lease if you rent.

Desk feasibility follows. That means a modelled yield for your specific roof pitch and orientation, a self-consumption estimate built from your load shape rather than a national average, the grid position under G98 or G99, the planning position under Class J, and the capital allowance treatment at your company's profit level. If the answer is that a project does not pay at your consumption, that is what the feasibility says.

If it does stack up, you get an itemised written quote: equipment by make and model, the scope of the electrical and roofing work, the grid application, commissioning and certification, and the assumptions behind every figure in the payback. Nothing is bundled into a single number.

We are MCS certified, NICEIC Approved, OZEV approved, TrustMark registered and a RECC member, we work across seven technologies, and we operate UK-wide. Panels carry a 25-year performance warranty and workmanship is covered by an insurance-backed guarantee. To begin, send us your details and your last twelve months of electricity use using the form on this page or the quote page, and we will come back with an honest first view of whether the numbers work at your site.