Financing and Tax Incentives for Business Solar in Surrey

With rising commercial electricity costs and growing pressure to hit sustainability targets, solar power is no longer just a green choice—it’s a smart business move. For businesses in Surrey, there are now more ways than ever to make solar affordable and financially viable. Whether you’re aiming to reduce overheads, gain energy independence, or meet ESG goals, understanding the available finance models and tax benefits can help your business make the transition with confidence. This guide explains the commercial solar financing options available in Surrey, the tax incentives you could claim, and how Upvolt helps businesses maximise their return on investment.

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Everything You Need to Know in Brief

• Solar power helps businesses in Surrey reduce energy bills, with savings of up to £250,000 over 25 years for a typical 50 kW system.
• Financing options like capital purchase, leasing, and Power Purchase Agreements (PPAs) make solar affordable for businesses of all sizes.
• Government incentives such as Full Expensing and the Annual Investment Allowance (AIA) significantly reduce the upfront cost of commercial solar installations.
• The Smart Export Guarantee (SEG) allows businesses to earn income from surplus solar energy exported to the grid, boosting return on investment.

Why More Surrey Businesses Are Investing in Solar

Adopting solar power for your business offers numerous advantages , including substantial cost savings and enhanced energy independence. Energy costs for UK businesses have surged, with medium-sized commercial users seeing a 70% increase in electricity prices in the past two years alone. Installing solar panels can help mitigate these costs, saving businesses over £10,000 annually for a typical 50 kW system.

Solar systems, combined with battery storage, offer businesses greater control over their energy consumption.  Excess solar power generated during the day can be stored and used during peak demand periods in the evening, reducing reliance on expensive grid electricity. Additionally, businesses can benefit from the Smart Export Guarantee (SEG), earning payments for any surplus energy exported back to the grid.

Solar power also provides tangible environmental benefits, contributing to a company’s sustainability efforts. A 50 kW solar system can reduce CO₂ emissions by 15–20 tonnes annually, equivalent to planting 900 trees.

How Much Do Commercial Solar Panels Cost in Surrey?

The cost of a commercial solar system in Surrey  depends on size, panel quality, roof type, install complexity, and battery requirements. As a rough guide:

• 20 kW system: £15,000–£20,000
• 30 kW system: £25,000–£30,000
• 40 kW system: £35,000–£40,000
• 50 kW system: £45,000–£50,000

Government incentives  like 0% VAT on solar installations, the Smart Export Guarantee (SEG), and capital allowances through the Annual Investment Allowance (AIA) can significantly offset these upfront costs, improving return on investment over time.

Smart Ways to Finance Solar for Your Surrey Business

Not every business wants or needs to purchase a solar system outright. There are several flexible financing routes that allow you to spread costs, reduce upfront spend, or even install solar panels at your Surrey business  without paying anything upfront.

Capital Purchase

Paying for your system outright delivers the highest long-term savings and qualifies you for full ownership benefits, including tax relief. You’ll avoid interest or leasing fees and maximise your energy cost reductions.

It’s best suited to businesses with available capital or those looking for a quick return on investment. Typical payback is around 5 to 7 years, with 25+ years of free solar energy after that.

Solar Lease

With a lease, your business pays a fixed monthly fee to use the solar system, which remains owned by the installer or financier. This spreads the cost over time and can include maintenance.

It’s ideal for businesses that want the benefits of solar without the large initial outlay. Leases can offer predictable budgeting but usually come with longer contract terms.

Power Purchase Agreement (PPA)

A PPA allows you to access solar energy with zero upfront cost. A third party installs and owns the system, and your business agrees to buy the electricity it produces at a set, lower-than-grid rate.

PPAs are popular with larger commercial sites or landlords. They require no capital investment and include system maintenance. However, your business won’t own the system or receive tax benefits unless you buy the asset later.

Tax Relief Options for Commercial Solar Installations

The UK government currently offers several tax advantages that significantly reduce the effective cost of solar systems for businesses.

Full Expensing (First-Year Allowance) and 50% First-Year Allowance

UK companies investing in new and unused commercial solar systems may qualify for Full Expensing or the 50% First-Year Allowance, two powerful capital allowances introduced in April 2023.

• Full Expensing allows you to deduct 100% of the cost of qualifying plant and machinery—such as solar panels, inverters, and battery storage—from your taxable profits in the year of purchase.
• If Full Expensing isn’t applicable, the 50% First-Year Allowance lets you deduct 50% of the cost up front, with the remainder claimed through standard writing-down allowances.

These incentives are only available to limited companies and apply only to new and unused equipment.

Note: You cannot claim both allowances on the same expenditure, but either option can significantly lower the upfront financial burden of going solar.

Annual Investment Allowance (AIA)

Businesses investing in solar panels can claim tax relief through the Annual Investment Allowance (AIA), which allows 100% of qualifying costs—up to £1 million per year—to be deducted from taxable profits.

AIA is available to all businesses, including sole traders, partnerships, and companies, and it applies to both new and second-hand plant and machinery. For a company paying the 25% corporation tax rate, this can equate to a tax saving of up to £250 for every £1,000 invested.

Additional Incentives and Support Schemes

Beyond tax incentives and funding options, businesses in Surrey can take advantage of other schemes that enhance the financial return of solar investments—through either ongoing income or upfront savings.

Smart Export Guarantee (SEG)

The Smart Export Guarantee (SEG) allows businesses to earn income from surplus solar electricity exported back to the National Grid. Payments are made by energy suppliers for every kilowatt-hour (kWh) exported, with typical commercial rates ranging from 5p to 15p per kWh, depending on the provider.

For example, British Gas offers 15.1 pence per kWh of electricity exported under its Export and Earn Plus tariff, which is exclusively for British Gas business electricity customers.

While the SEG won’t cover your full system cost, it provides a steady revenue stream that can improve your solar return on investment. It’s especially valuable for businesses with reduced weekend or seasonal demand, where solar output exceeds on-site usage.

Solar Together Surrey

Solar Together is a group-buying scheme that helps local businesses access discounted solar panel installations through collective purchasing. The programme typically secures savings of 10–25% compared to standard market rates, making solar more affordable for small and medium-sized enterprises.

The scheme includes pre-approved installers and quality-checked equipment to ensure reliability and value. Although the current round is closed, businesses can register their interest online to receive updates when it reopens.

Why Solar Makes Sense for Your Business

Solar is no longer a luxury for businesses in Surrey—it’s a strategic asset that cuts costs, builds energy resilience, and supports sustainability goals. Whether you choose to buy outright, lease, or use a Power Purchase Agreement, there’s a funding route to suit every business model. Government-backed tax reliefs like the Annual Investment Allowance (AIA), Full Expensing, and the Smart Export Guarantee (SEG) help make solar more affordable than ever.

Add in local programmes like Solar Together Surrey, and the case for going solar becomes even stronger.

About Upvolt

Upvolt designs and delivers high-performance solar energy systems for businesses across Surrey and the South East. From feasibility assessments and system design to installation, commissioning, and long-term support, we manage the entire process in-house for a seamless experience.

Every installation includes access to Skygate™, our proprietary energy management platform. Skygate™ gives you real-time visibility over your system’s performance—so you can track generation, monitor savings, and optimise usage to get the most from your investment.

Whether your goal is to cut operational costs, hit net zero targets, or strengthen ESG performance, we’ll tailor a solar solution that fits your business.

Get in touch today for a free, no-obligation quote and discover what solar could save your Surrey business.

FAQ

How much does business solar cost in Surrey?

The typical cost for a commercial solar system varies between £15,000 and £50,000 depending on the system size and complexity of installation.

Can I claim Full Expensing on my solar system?

Yes, commercial solar systems, including panels, inverters, and battery storage, qualify for Full Expensing, which allows businesses to deduct 100% of the cost from taxable profits in the year of purchase.

Is it possible to get solar without paying anything upfront?

Yes, with a Power Purchase Agreement (PPA), your business can access solar energy with no upfront cost, paying only for the electricity the system generates at a reduced rate.

What tax incentives are available for solar installations in Surrey?

Businesses can claim capital allowances through the Annual Investment Allowance (AIA) and Full Expensing, allowing substantial reductions in taxable profits based on solar system costs.

How do solar systems impact energy bills for Surrey businesses?

Installing solar panels can save businesses over £10,000 annually on energy costs, with potential long-term savings of up to £250,000 over 25 years for a typical 50 kW system.

Alex Lomax

CEO & Co-Founder

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