Why investing in commercial solar is the best decision a company can make for its energy needs

Written by
Jani Moran
Published on
October 11, 2024

In today’s business landscape, finding investments that provide high returns, strategic value, and long-term security is no small task. Many companies focus on traditional areas such as technology upgrades, expanding operations, or real estate. While these are all critical investments, there’s one opportunity that consistently outperforms the rest—investing in commercial solar energy.

Turning an expense into a high-performing asset

Every business must buy energy, whether they like it or not. It’s a non-negotiable, ever-increasing expense that erodes profit margins year after year. But what if you could turn this unavoidable cost into a high-performing asset? That’s exactly what commercial solar does: it converts a recurring liability into a profit-generating machine that not only protects your bottom line but also enhances your company’s overall value.

1. Unmatched ROI and long-term returns

Solar energy offers one of the highest returns on investment (ROI) of any energy-related project. For most businesses, the payback period for a commercial solar installation is achieved within four years. After that, every kilowatt-hour of electricity generated is pure profit. With an average Internal Rate of Return (IRR) of 25-35% over the system’s 25-year lifespan, it’s clear that solar consistently outperforms many traditional investment vehicles.

If you’re a business owner weighing whether to invest in new equipment or expand your real estate holdings, consider this: would you prefer a high-maintenance asset that may depreciate over time, or a self-sustaining energy system that generates tax-free savings and reduces operational costs for decades? Solar is the only investment that offers strong financial returns on something you’re already paying for—energy.

2. Energy independence and security

The volatility of energy markets is a risk that businesses can’t afford to ignore. Electricity prices are influenced by a range of factors, from geopolitical events to market speculation and regulatory changes. For companies that rely heavily on stable energy prices to keep their operations running smoothly, solar provides a valuable hedge against this uncertainty.

By installing a solar energy system, you’re not just producing electricity—you’re gaining control over a critical cost factor. This level of energy independence means your company is no longer at the mercy of utility rate hikes or supply chain disruptions. In an era of increasing energy uncertainty, this stability is invaluable.

3. Immediate tax benefits and financial incentives

One of the unique benefits of solar is its immediate financial impact. In the UK, businesses can take advantage of the HMRC Annual Investment Allowance (AIA) scheme, which allows them to deduct up to £1 million of solar installation costs from their taxable profits in the first year. This creates a win-win scenario: you’re not only reducing energy costs but also improving your cash flow through tax relief.

4. Future-proofing against rising costs

No one knows where energy prices will be in 5, 10, or 15 years, but one thing is certain—they aren’t going down. Historically, energy prices have increased by 663% over the last 20 years and 204% over the last 5 years alone. This means that a £10,000 electricity bill today could easily become a £20,000 bill in 15 years, eating into your profit margins and making it harder to forecast long-term budgets.

Solar energy locks in your cost of power. By generating your own electricity, you’re effectively “purchasing” 25 years of energy at a huge discount on today’s prices, shielding your business from future price shocks and allowing for more predictable financial planning.

5. Environmental and ESG benefits

Today, corporate sustainability is more than just a buzzword—it’s a strategic necessity. Investors, customers, and stakeholders increasingly demand that businesses not only achieve financial success but also act as responsible stewards of the environment. Installing a solar system is one of the simplest and most impactful ways to achieve these goals.

Solar drastically reduces your company’s carbon footprint, strengthens your ESG (Environmental, Social, and Governance) profile, and contributes to long-term sustainability targets. With many large organisations using sustainability metrics as a key criterion for vendor selection, having a robust renewable energy strategy in place can be the deciding factor between winning or losing a contract.

6. Enhanced property and asset value

Beyond its role as an energy producer, a solar installation can significantly enhance the value of your property. Properties with lower operational costs and sustainable energy solutions tend to command higher valuations. In the UK, where Energy Performance Certificates (EPCs) are critical, solar systems can drastically improve your EPC rating, making your property more attractive to tenants, buyers, and investors.

7. From a cost to a strategic asset

Perhaps the most compelling argument for commercial solar is its ability to transform an inevitable business expense into a strategic advantage. Right now, your electricity spend is a line item that steadily chips away at your profits. But with solar, that same spend can become an asset that generates returns for decades.

By choosing not to invest in solar, you’re essentially opting to keep paying an ever-increasing bill with no return, leaving thousands—or even millions—on the table. Investing in solar means redirecting that capital into an asset that not only pays for itself but also generates value far beyond the initial investment.

The true cost of waiting

Many business owners hesitate, thinking they want to “wait and see” how the technology evolves or how market conditions change. But what they don’t realise is that the biggest cost is not the upfront investment—it’s the cost of doing nothing. Every month you delay is another month of paying full price for electricity instead of investing in a system that can dramatically reduce these costs for the next 25 years.

Conclusion: Solar is not just an investment—it’s a strategic imperative

In a world where energy costs are unpredictable, and sustainability is paramount, solar is the rare investment that offers a combination of financial returns, risk management, and strategic alignment. It’s an asset that delivers high returns, stabilises cash flow, and enhances your company’s value and reputation. There is simply no other investment that takes a non-negotiable business cost and turns it into a long-term profit centre.

So the real question is: how much longer can you afford not to invest in solar? If you’re serious about reducing costs, boosting profitability, and future-proofing your business, the time to act is now. Solar isn’t just the best investment a company can make for its energy needs—it’s one of the smartest investments any business can make, period.

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Table of contents

Article written by
Jani Moran
Commercial Director
Jani Moran is the Group Commercial Director of Sustain Commercial Solar, overseeing the strategic direction of the commercial division. With a keen eye for identifying market opportunities and a strong background in sales, Jani drives revenue growth and expands the company’s market share.

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The system is helping us apply for tenders. A lot of tenders now ask you how you are working towards Net Zero. Solar has been great in helping us demonstrate that.

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We have made enormous savings on our costs. We now make a 6 figure income on the energy generated by our system.

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