Commercial Solar Panels Edinburgh: Costs and Tax Relief
Business electricity in the UK costs more per unit than most households pay, and there's no price cap to limit it. For an Edinburgh office, workshop, shop or warehouse, that makes the electricity bill one of the hardest overheads to control.
Solar panels give a business some of that control back. Most firms use the bulk of their power during the day, which is exactly when panels generate, so very little of the output goes to waste. Add the fact that the full cost can usually be set against profits in the first year, and the numbers look quite different from a typical home installation.
Quick take:
Small businesses paid an average of around 28p per kWh for electricity in spring 2026, and micro businesses around 38p. Businesses aren't covered by the Ofgem price cap.
Because most businesses use power in daylight, they typically use far more of their solar output on site than homes do.
A 50 kW system on an Edinburgh business roof could save around £7,800 a year, with a simple payback of around four to eight years.
The Annual Investment Allowance lets most businesses deduct the full cost from taxable profits in the year they buy the system.
Most rooftop systems on Scottish business premises don't need planning permission, with no size limit, though listed buildings, the World Heritage Site and sites near Edinburgh Airport are exceptions.
Why Business Energy Bills Hit Harder
The Ofgem price cap only protects households. Businesses agree contracts with suppliers directly, so prices follow the wholesale market and whatever rate your firm locked in at renewal.
Government figures show what that means in practice. These are average prices paid by UK businesses between April and June 2026, including the Climate Change Levy but excluding VAT:
On top of the unit price, business electricity carries the Climate Change Levy, set at 0.801p per kWh from April 2026. Every unit your panels generate and you use on site is a unit you don't buy, so you avoid the unit price and the levy on it.
Why Solar Suits Businesses Better Than Homes
A typical home uses most of its electricity in the morning and evening, when panels produce little. Without a battery, a lot of a home's solar power ends up exported to the grid at a low rate.
Most businesses work the other way round. Lights, computers, machinery, chillers and air conditioning all run through the working day, which lines up with the hours panels generate.
That overlap is the main reason commercial solar tends to pay back faster than domestic systems. The more of your own output you use, the more each panel is worth, because a unit you use saves you around 28p, while a unit you export may earn only a few pence.
Weekends and holidays matter too. An office closed on Saturdays and Sundays will export more than a shop or care home that runs seven days a week. A battery can store some of that spare power for Monday morning, though it adds to the upfront cost.
Does Solar Work in Edinburgh?
Yes, and better than many business owners expect. Government meter data from thousands of Scottish systems shows the typical Scottish installation produced more electricity per kilowatt of panels than the typical London system in both 2023/24 and 2024/25. Over the past 14 years London still edges ahead on average, but the gap is small.
Edinburgh also sits in a stronger zone than many UK cities on the Microgeneration Certification Scheme's official ratings, ahead of Manchester, Leeds, Newcastle, Aberdeen and Glasgow. Our Scotland vs London analysis sets out the full data and sources.
What Commercial Solar Costs and Saves
The table below shows illustrative figures for three common system sizes. Costs are typical installed prices, and savings assume:
output of 745 kWh per kW of panels a year, which is what Scottish systems recorded in 2024/25, the dullest year for sunshine since 2012/13
70% of the power used on site
electricity bought at 27.67p per kWh, the April to June 2026 average for small to medium businesses
spare power exported at a cautious 5p per kWh
Payback figures are before any tax relief. A micro business paying closer to 38p per kWh would save more on every unit it uses, and a firm that uses 80% or more of its output on site would see a faster return. Your installer can model this from your own half-hourly meter data.
Tax Relief: Writing Off the Cost
HMRC classes solar panels as "special rate" spending, which on its own would only earn a 6% writing-down allowance each year. In practice, most businesses don't need to use that slow route.
The Annual Investment Allowance (AIA) lets sole traders, partnerships and companies deduct the full cost of qualifying plant and machinery from profits in the year they buy it, up to £1 million. HMRC guidance confirms the AIA can be set against special rate items, so solar panels qualify.
Here's what that can mean for a company paying the 25% main rate of Corporation Tax:
A £40,000 system, claimed in full through the AIA, reduces taxable profits by £40,000.
That cuts the year's Corporation Tax bill by up to £10,000.
In effect, the system costs around £30,000, which shortens the payback period by roughly a quarter.
The saving is smaller for businesses paying the 19% small profits rate, and the AIA only helps if you have taxable profits to set it against. Speak to your accountant before you commit, as they'll know how it fits with your other claims for the year.
A note on VAT: the 0% VAT rate on solar only covers homes and certain charity buildings. Business installations carry the standard 20% rate, which VAT-registered businesses can usually reclaim.
Do You Need Planning Permission?
Usually not. Since May 2024, Scottish permitted development rights (Class 6J) have allowed solar panels on non-domestic buildings without planning permission, and the old 50 kW cap has gone. There are still limits:
That last rule matters in West Edinburgh. Business premises close to Edinburgh Airport fall outside the permitted development rights, so check the distance early. Panels in the Old Town and New Town also need planning permission, given the World Heritage Site status.
If you lease your premises, you'll also need your landlord's agreement before anything goes on the roof.
Connecting to the Grid
Every system has to be registered with SP Energy Networks, the local network operator for Edinburgh. Small systems, up to 3.68 kW per phase (11.04 kW on a three-phase supply), only need a notification under the G98 process. Most commercial systems are larger than that, so they need a G99 application, which has to be approved before the system is switched on and can take several weeks. Your installer normally handles this, but it's worth building into your timeline.
Getting Paid for Spare Power
Any electricity you don't use can earn money through the Smart Export Guarantee (SEG), which covers solar installations of up to 5 MW. You'll need an export meter, and your installation must meet the scheme's certification rules.
Business export rates vary between suppliers, and some of the better rates are only offered to households. That's why the figures above assume just 5p per kWh. For most businesses, export income is a small extra, and using the power on site is where the real savings are.
How to Get Started
A few things help your installer give you an accurate quote:
Your last 12 months of electricity bills. These show your unit rate and total use.
Half-hourly meter data, if you have it. Most business meters record it, and it shows exactly when you use power, which matters more than the annual total.
Roof details. Size, direction, condition and whether it can take the extra weight.
Your lease, if you rent. You'll need permission for roof works.
From there, our vetted installers will survey the building, check the planning and grid position, and give you a written proposal with projected savings and payback.
Take Control of Your Business Energy Costs
Electricity prices for businesses aren't capped, and they're not likely to get simpler. Solar on your own roof gives you a share of your power at a fixed cost, paid for largely through the savings and, in most cases, written off against your profits.
Get in touch, and we'll connect you with our accredited local installer for a free, no-obligation survey of your premises.
FAQs
Is commercial solar worth it in Scotland?
For most businesses that use power during the day, yes. Scottish systems produced more per kilowatt than London's in each of the last two years, and businesses pay more per unit than households, so every unit used on site is worth more.
Can I claim tax relief on solar panels?
Most businesses can deduct the full cost through the Annual Investment Allowance, up to £1 million a year. Your accountant can confirm how it applies to your business.
Do I pay VAT on commercial solar panels?
Yes, at 20%. The 0% rate only applies to homes and certain charity buildings. VAT-registered businesses can usually reclaim it.
Do I need planning permission for solar on a business roof in Edinburgh?
Usually not. Listed buildings, the World Heritage Site, front or road-facing roofs in conservation areas, and sites within 3km of Edinburgh Airport are the main exceptions.
What size system does my business need?
That depends on your roof space and when you use power. Your installer will size the system so you use as much of the output as possible, rather than exporting it cheaply.
Should I add a battery?
If your premises close at weekends or you use a lot of power early in the morning or into the evening, a battery can store spare solar for later. Our battery storage page explains the options.
Figures accurate as of October 2026. Savings and payback periods are illustrative and depend on your premises, tariff and pattern of use. Tax treatment depends on your circumstances; speak to your accountant.
