Before investing in solar panels, it is important to identify and understand the return on investment (ROI) solar panels provide. After all, there’s a reason why so many commercial companies are turning to solar power to fuel their daily operations.  

It is important to understand, too, that the return on investment very much depends on certain factors like:  

• The location of the system

• The type of business you need to run

• The amount of energy consumed

Our experts can offer you a free consultation, by calculating your solar panel ROI, enabling you to find out what your exact ROI and savings would be when installing commercial solar panels.  

All we need from you is documentation that gives us your energy usage data, like half-hourly data. We would take all the relevant information into account to come up with a plan that works for your business.  

Solar energy’s return on investment  

There are various factors that influence the return on investment solar panels will bring you, making investing in solar energy worth it.  

Location

Having your solar panels situated in a good location will determine your ROI. For example, the direction your solar panels face will determine how much energy you generate.  

South-facing panels work best in areas located in the northern hemisphere, receiving maximum sun exposure during the day. Any east or west-facing panels tend to demonstrate 15-20% less energy than south-facing panels, and panels facing northward will generate a substantial amount less.  

Also, you need to ensure that there is nothing obstructing your panels because this will also determine how efficient the solar panels are and how much return on investment your solar panels will bring.  

If your business is based in England, you will also notice that you’ll receive more sunlight in the south of England compared to the north, however, it’s worth noting that well-designed solar panels will still be able to generate a substantial amount of energy, no matter where your business is located in England. In fact, panels may not be as effective in scorching hot conditions.  

Energy consumption

The more energy your business consumes, the higher you can expect your return on investment to be. Businesses with lower energy consumption, on the other hand, will result in lower ROIs.  

Also, solar battery storage will further increase your ROI, especially during periods when sunlight is limited. Another smart way of using solar energy is to ensure that you conduct energy-intensive activities during times when the sun is shining.  

So, we can see that by using solar energy smartly, you’ll increase the efficiency of your solar panels, thereby enhancing your ROI.  

Initial installation costs

Installation costs will also have an impact on your solar energy return on investment. For example, how much site preparation needs to take place, including the amount of labour that needs to be done and the equipment that needs to be purchased. The more money used in the initial installation process, the longer the ROI will be.  

Government policies and incentives

There are various incentives from the government that can be accessed by businesses.  

These incentives can help offset installation costs and can shorten the time it takes for your solar system to pay itself off, enhancing your return on investment with solar panels.  

How to calculate ROI for commercial solar panels  

If you’re looking to implement solar panels or have already done so, you may want to find out how much money you’ve saved over time. Fortunately, there’s a specific formula you can use to do so accurately.  

The first step is to deduct the total installation cost from the amount of money saved on energy usage over the solar system’s lifespan. So, for example, if the initial cost of installing your solar system costs you £100,000 and it generates savings of £20,400 per year for 10 years, the total amount of savings would be £204,000.  

The calculation that can be used to calculate this is this:  

ROI = (Total savings - Initial cost) / Initial cost x 100

Industry-specific ROI examples

Let’s take a look at how different industries are saving money by using solar energy and different examples.  This will help you put into perspective how much money you could save.  

Manufacturing facilities  

One of our manufacturing clients that has reaped the rewards of investing in solar panels that is worth highlighting is British American Tobacco Southampton (BATS). We installed a PV solar system for this client which earned them a return on investment in a 3-year period, earning a lifetime savings of £4.7m.  

With 1.7k solar panels installed, and an installation size of 700kW, our client has managed to generate 639,729 kWh annually and is 7% self-sufficient, only needing to rely on the grid 7% of the time.  

Retail stores and shopping centres

Next, we take a more general look at retail stores and shopping centres and how they enhance their return on investment with solar panels. Retail facilities will also use a lot of energy during their operational hours due to things like climate control, digital signage, and lighting.  

So, by using solar energy, retail facilities will acquire lower electricity bills. This will bring more business as consumers who are environmentally conscious will be drawn to these facilities.

Now, let’s take a look at an example of how retail facilities and shopping centres will enhance their return on investment:  

If a retail chain spends £150,000 on a 150 kW system, saving £25,000 annually, after 6 years, they will recover their investment and continue saving for decades.  

Average solar energy return on investment  

By now you’re probably aware that the type of return on investment that your business will acquire due to solar panels depends completely on the amount of energy generated and used. The more energy your facility uses, the quicker your solar panels will pay off.  

The payback period for solar panel installations will vary depending on the type of industry or business, but it usually ranges between 1 and 25 years. Factors that determine the payback period are things like the size of the solar system, the amount of energy consumption, and the amount of money initially invested.  

For example, the payback period will be a lot shorter for commercial buildings than for residential buildings. The average payback period for a commercial building is 1-3 years.  

Non-financial benefits that impact return on investment for solar panels  

Besides the high return on investment that solar panels bring, there are other non-financial benefits, too, that businesses will benefit from, for example:  

• Enhanced property value resulting from energy independence  

• Positive brand image as a sustainable business  

• Contributing towards the Net Zero initiative and Environmental, Social, and Governance (ESG) goals.  

For more information on how your business can benefit from an enhanced return on investment with solar panels, get in touch with our team of experts at Sustain Commercial Solar on 0333 880 0891.  

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