The 2026 numbers
Installed cost of commercial solar PV in the UK currently runs:
- £900-£1,200 per kWp for systems under 100 kWp (typical small managed office, professional services suite, ground-floor retail-office)
- £780-£950 per kWp for systems 100-500 kWp (typical multi-let office, mid-sized HQ, serviced office building)
- £700-£850 per kWp for systems above 500 kWp (typical headquarters, business park, multi-building campus)
- £640-£780 per kWp for systems above 1 MWp (typical large business park, portfolio rollout)
Battery storage adds roughly £300-£450 per kWh of battery capacity installed, with the lower end for systems above 200 kWh capacity.
Solar carport over surface parking adds a structural premium of £300-£500 per kWp vs rooftop, reflecting steel canopy structure cost.
What’s included in the per-kWp number
The installed costs above cover the full project delivery: panels, inverters, mounting system, DC and AC cabling, switchgear modification (where needed), grid connection application and commissioning, structural and electrical commissioning to MCS/NICEIC standards, all required documentation, and 5-year workmanship warranty plus manufacturer warranties on panels (typically 25-30 years) and inverters (typically 10-15 years).
Not included: planning permission application fees (typically £120 Prior Approval, £200-£400 full planning), specialist heritage consultancy on listed buildings (typically £3,500-£8,000), or major switchgear replacement where the existing building infrastructure is end-of-life.
Worked example: 4,500 sqm Reading office, 320 kWp install
System scope: 320 kWp rooftop PV on existing flat roof. Two 125 kW string inverters integrated with existing 800A three-phase landlord supply. DC cable runs via existing rooftop plant rooms to main switchroom. No battery storage in this scope.
Installed cost breakdown (excluding VAT):
- Panels (595 × 540W bifacial mono-PERC modules): £77,000
- Inverters (2 × Solis 125 kW string): £15,500
- Mounting (ballasted east-west, 100% roof penetration-free): £28,000
- DC + AC cabling, isolators, switchgear modification: £21,500
- Structural engineering + roof survey: £6,500
- DNO G99 application + commissioning: £8,500
- Project management + design: £18,000
- Install labour (typical 6-8 weeks site presence): £74,000
- Commissioning + documentation + handover: £12,000
- 5-year warranty + monitoring service: £8,000
- Total: £269,000 (= £840/kWp)
For limited companies at current 25% corporation tax with full AIA available, the year-one tax saving is £67,250 — reducing effective net capex to £201,750.
Cost trends
Commercial solar capex per kWp has fallen roughly 30% in real terms since 2019, driven primarily by:
- Panel manufacturing scale (China-led capacity expansion through 2023)
- Inverter market maturation (Huawei + Sungrow + Solis price competition)
- Improved installation productivity (typical 6-8 week site time vs 10-12 weeks five years ago)
- DNO application process maturity
Forward expectations suggest a further 8-15% real-terms cost reduction through 2030 as battery prices fall and inverter integration consolidates. For most UK office projects, the marginal benefit of waiting is modest — the cumulative grid electricity cost of delaying a 5-year-payback project for two years usually exceeds any system cost reduction.
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Regional cost variation across the UK
Installed costs are not uniform across the UK. Three factors drive regional variation of roughly 8-14% between the cheapest and most expensive areas.
Labour rates. London and the South East carry a 10-15% labour premium over the Midlands, Yorkshire, and the North West. On a 500,000 project this represents a meaningful 50-75k difference.
DNO connection complexity. UKPN (London/South East) and ENWL (Greater Manchester/Lancashire) networks face higher congestion than NGED (South West/Midlands) and SPEN (Scotland). G99 applications in constrained London network areas may require dedicated engineering studies adding 5,000-20,000 to project cost.
Structural costs. Older commercial building stock concentrated in city centres (London, Bristol, Birmingham, Edinburgh) often requires more expensive structural surveys and sometimes reinforcement before PV install. Northern England’s converted mill buildings regularly need additional steel surveys costing 3,000-8,000.
Indicative regional cost comparison for a 300 kWp flat-roof office system:
| Region | DNO | Cost range (per kWp) |
|---|---|---|
| London | UKPN | 870-920 |
| South East | UKPN | 820-870 |
| South West | NGED | 780-840 |
| Midlands | NGED | 760-820 |
| North West | ENWL | 780-840 |
| Yorkshire | YEDL | 760-820 |
| Scotland | SPEN/SSEN | 790-860 |
Component-level cost breakdown
Understanding which components drive cost helps you evaluate quotes and identify where value engineering is possible.
For a typical 300 kWp UK office system, the cost split is approximately:
| Component | Cost range | % of total |
|---|---|---|
| Solar panels (Tier-1, bifacial mono) | 65,000-85,000 | 24-28% |
| Inverters (string, 100-125 kW) | 14,000-18,000 | 5-7% |
| Mounting system (ballasted flat-roof) | 25,000-35,000 | 9-12% |
| DC cabling, combiner boxes, fusing | 12,000-16,000 | 4-6% |
| AC cabling, switchgear, metering | 14,000-20,000 | 5-7% |
| Structural and electrical engineering | 6,000-10,000 | 2-3% |
| DNO G99 application and network study | 5,000-15,000 | 2-5% |
| Planning (Prior Approval or full) | 2,000-8,000 | 0.7-3% |
| Project management and design | 15,000-22,000 | 6-8% |
| Install labour | 65,000-80,000 | 24-28% |
| Commissioning + IEC 62446 docs | 8,000-14,000 | 3-5% |
| Warranty and monitoring (5yr) | 6,000-10,000 | 2-3% |
The two dominant cost lines are panels and labour — together 50-55% of total project cost. Panel prices have fallen approximately 60% in real terms since 2012 and continue to decline modestly. Labour rates have risen with the broader UK construction market and are broadly stable in real terms.
How commercial solar quotes are structured
A professionally-structured commercial solar quote should contain six specific items to allow meaningful comparison between providers.
1. System specification sheet. Panel model, quantity, and nameplate wattage. Inverter model, quantity, and rated output. Mounting system type and manufacturer. Battery specification if included.
2. PVSyst yield model summary. Projected annual generation (kWh), self-consumption ratio, export, and specific yield (kWh/kWp). The model assumptions — orientation, tilt, shading, degradation — should be explicitly stated.
3. Full cost breakdown. Line-by-line as above, not just a headline total. Hidden within poorly-structured quotes are often omitted items (structural survey, G99 fee, planning fee) that create cost surprises later in the project.
4. Electricity savings forecast. At stated grid tariff assumption, escalation assumption, and SEG tariff assumption. If the quote does not state assumptions explicitly, you cannot compare the economics with any other quote.
5. Warranty schedule. All four layers: panel manufacturer, inverter manufacturer, workmanship, and Insurance-Backed Warranty (IWA). The IWA insurer name and A.M. Best rating should be stated.
6. Programme. Key milestones including G99 application date (typically the critical path item), planning route, design completion, procurement lead time, and commissioning target.
Quotes missing these six items require follow-up questions before comparison is meaningful. Be wary of quotes presenting only a headline capex and a headline annual saving — these are always incomplete and frequently over-optimistic.
Cash purchase vs asset finance: the real cost comparison
The effective cost of a solar installation depends on which funding route you choose.
Cash purchase for a 250,000 system. Net-of-AIA outflow at year 0: 187,500 (after 25% corporation tax relief at full Annual Investment Allowance). Annual electricity saving: 65,000/year. Simple payback on after-tax capex: 2.9 years. The AIA deduction makes cash the highest-return route for profitable UK limited companies that can absorb the full AIA in the year of purchase.
Asset finance (5-year, 7% APR). Monthly repayment approximately 4,950 on 250,000 — 297,000 total repayment. Financing cost 47,000. Annual electricity saving net of finance payment: approximately 5,600 cash-flow-positive from year 1. After the finance term clears in year 5, the full 65,000/year saving continues for the remaining 20 years.
Salix PSDS (public sector). Full grant funding: 0 net capex, 65,000/year saving from day one. Transformatively favourable but not available to private-sector buyers.
For profitable owner-occupying limited companies, cash purchase maximises 25-year NPV. For cash-constrained businesses, asset finance creates positive cash flow from year 1 — often the more important metric for SME finance directors.
Five-year cost trajectory
Between 2021 and 2026, UK commercial solar installed costs followed this trajectory (100-500 kWp range):
- 2021: 1,050-1,300/kWp
- 2022: 1,100-1,400/kWp (supply chain pressures, panel price spike post-Ukraine)
- 2023: 980-1,200/kWp (normalisation as supply chains stabilised)
- 2024: 870-1,080/kWp (panel oversupply, inverter competition)
- 2025: 820-1,020/kWp
- 2026: 780-950/kWp
The 2022 spike was driven by module price increases (up 30% in 12 months), shipping bottlenecks, and UK labour market tightness post-COVID. Since 2023, declining module prices have more than offset labour and materials inflation. Further installed-cost reductions of 10-18% are plausible by 2028-2030, but the economic case for waiting to install is weak: the cumulative electricity cost of a 2-year delay on a 300 kWp system typically runs to 120,000-160,000 — far exceeding any installation cost saving from waiting.
Key takeaways
- UK commercial solar installed costs run 640-1,200/kWp in 2026 depending on system size; 300 kWp is a common office benchmark at 780-850/kWp
- Components (panels, inverters, mounting) and labour each represent roughly 50% of total installed cost
- Regional variation of 8-14% exists, with London/South East at the upper end and Midlands/Yorkshire at the lower end
- AIA tax relief reduces effective after-tax capex by 25% for UK limited companies, making the real net cost materially lower than the headline invoice
- A professionally-structured quote has six specific elements; missing any of them makes cross-supplier comparison unreliable
- Waiting for further cost reductions is rarely justified: accumulated electricity savings during delay typically exceed the installation cost reduction