What is the payback period for commercial solar in the UK?

What goes wrong with payback figures, and what does it cost?

The usual failure is a board approving a payback figure that nobody can rebuild from the site's own data, so the real return arrives later than the board was told.

The board is asked to approve a quote that says "payback in three years". Nobody in the room can say what sits behind the three.

These are the mistakes that move a payback figure most:

• Counting every kWh at the import price. Power you export earns the export rate, not the import price. If the quote assumes more self-consumption than your half-hourly data supports, payback lengthens.
• Quoting payback after tax relief without saying so. OVO's own example gives 3.7 years after £7,500 of Annual Investment Allowance relief ³. On the same inputs, the payback before relief works out at about 4.9 years.
• Applying 0% VAT. The 0% rate covers residential and charitable buildings only. Offices and factories pay 20% ⁴. A quote built on 0% VAT has the wrong VAT line. Whether you can recover the VAT is a question for your accountant.
• Assuming one export rate. Business export rates differ by up to five times between suppliers, and a variable rate can be cut at any time.
• Sizing the system for export. Export pays far less than the import price you avoid, so a system sized for daytime demand usually beats one sized for the roof.

How is commercial solar payback calculated?

Simple payback equals installed cost divided by annual benefit, where annual benefit is self-consumed kWh times the avoided import price plus exported kWh times the export rate.

Write it as two lines:

1. Annual benefit = (self-consumed kWh x import price) + (exported kWh x export rate).
2. Simple payback = installed cost / annual benefit.

The import price matters most. DESNZ puts the Q2 2026 average for non-domestic users at 24.51 p/kWh including the Climate Change Levy, up 2.0% on a year earlier ¹. Manufacturing averaged 17.4 p/kWh (provisional) excluding the levy ¹. Your own contract rate may differ from these, and it is the figure to use.

A kWh used on site avoids that price. A kWh exported earns only the export rate. At 24.51 p/kWh against exports of 3p to 15p, a self-consumed kWh is worth about 1.6 to 8 times an exported one.

Simple payback ignores panel degradation, price changes and finance costs. Treat it as a screening figure, not a forecast.

What payback do UK businesses actually see?

Public installer sources quote commercial solar paybacks of about 3 to 7 years, and CH Group's four published projects are projected at 2.8 to 6 years.

The public figures come from installers and lead-generation sites, so read them as selling ranges rather than audited results. Several are quoted after tax relief.

CH Group's figures are projections built on each site's own inputs. They do not show that CH Group beats the market, and your site will give a different answer. Merlin's scope also included a 41,000 sq ft full roof over-cladding, so its figure is not a solar-only comparison.

How much does a business earn from the Smart Export Guarantee?

Business export rates published by suppliers run from about 3p to 15p per kWh, they change, and the rate you are offered depends on the supplier and on whether it also supplies your import.

The Smart Export Guarantee (SEG) covers solar PV up to 5 MW total installed capacity in Great Britain ⁶. Licensees set the payment and the contract length, but the rate cannot be zero or below ⁶. Ofgem's 2019 guidance says suppliers with at least 150,000 domestic customers must offer at least one SEG tariff ⁷.

EDF's rates are from its own business page, checked on 13 November 2026. E.ON Next's rate and the low-end rate are from a broker's May 2026 survey. Rates change, so ask for a written quote before you rely on one.

Self-consumption beats every row in this table. At 24.51 p/kWh ¹, a kWh the site uses itself is worth more than the best export rate shown.

Systems above 50 kWp are eligible. Ofgem's 2019 guidance, which may since have changed, asked for installation certification only for systems above 50 kWp up to 5 MW. Each supplier sets its own checks: EDF asks for MCS or an accredited equivalent plus a smart or half-hourly meter ⁷⁸. MCS scope ends at 50 kWp, so ask EDF how it checks a larger system.

SEG income at business premises is taxable income, and VAT can apply if you are VAT-registered ⁹. Check the treatment with your accountant.

Why is payback longer for some sites, and who is solar not right for?

Payback is longer where a site uses little of its solar output in the day, because more kWh are exported at a low rate instead of used at the import price.

A single-shift site with low weekend load exports more. A site with steady daytime demand, such as refrigeration or continuous production, uses more of its own output. Solar4Good's own ranges show the same pattern: 3 to 4 years with strong daytime demand, 4 to 5 years for mixed use ⁵.

Solar is a weaker fit where:

• The roof is short of space or in poor condition, and the roof work is not in the budget.
• Daytime demand is low and export would carry most of the output.
• The lease is too short to cover the payback period.

CH Group is also not the right route if the system is small and simple, or if you already hold comparable quotes and trust your installer. A controlled tender earns its place on larger sites where quotes cannot otherwise be compared.

For the cost side of the sum, see how much commercial solar costs in the UK. For the quote side, see how to compare commercial solar quotes.

How do I check the payback figure in a quote?

Ask the installer for the inputs behind the payback figure, then rebuild the sum yourself with your own half-hourly data and your contract price.

Five questions settle most disputes:

1. What import price was used, and is it your actual contract rate?
2. What share of generation is assumed to be used on site, and what half-hourly data supports it?
3. What export rate is assumed, from which supplier, and is it fixed or variable?
4. Is the figure before or after tax relief, and what relief is assumed?
5. Does the cost include VAT at 20% where it applies, and everything in the scope, such as roof work?

If two quotes show different paybacks, the difference usually sits in these five answers.