Five to eight years, for a daytime-heavy business — and the rest of this article shows where that number comes from, because a payback claim without the working is a brochure. We install commercial solar across County Durham and the North East, and the figures below are the ones we actually plan with: local yields, 2026 installed costs, and the tax treatment as it currently stands, sourced as we go.
The arithmetic is simple; the assumptions do the work
Simple payback is installed cost divided by what the system saves and earns in a year. Three inputs decide the bottom half of that fraction: how much the array generates, how much of that generation you use on site, and what each of those kilowatt-hours is worth.
The last one is where most payback claims quietly go wrong. A unit of solar used inside the building displaces electricity you would have bought at your full import rate — manufacturing businesses averaged around 17–19p per kWh through 2025, and smaller commercial users typically pay more.
A unit exported to the grid earns whatever export rate your supplier offers under the Smart Export Guarantee — rates are market-set and, as at July 2026, sit well below import prices; we use a deliberately cautious 5p in our planning maths.
So the same kilowatt-hour is worth perhaps three times as much used as exported, and payback is mostly a measure of how well the system is matched to the building’s daytime consumption — not of how sunny the postcode is.
A worked example: 100 kWp on a warehouse roof
Here is the example we use across our commercial solar page, with nothing hidden. A 100 kWp array on a mid-sized warehouse roof costs somewhere around £80,000 at the middle of the 2026 planning band of £700–£1,100 per kWp installed.
- At the 850 kWh per kWp we plan with for a well-oriented North East roof, it generates 85,000 kWh a year.
- A daytime-heavy business typically uses around 70% of that on site: 59,500 kWh no longer bought at 17p is about £10,100 a year kept.
- The remaining 25,500 kWh exports at our cautious 5p assumption: about £1,275 a year earned.
- Year-one benefit ≈ £11,400. £80,000 ÷ £11,400 ≈ seven years simple payback.
And then tax moves the whole picture. Solar panels are special-rate plant for capital allowances — which means the 100% “full expensing” some installer sites promise does not apply to them — but a company claiming the Annual Investment Allowance can still deduct the full £80,000 from taxable profits in year one: up to £20,000 off the tax bill at the 25% main rate of corporation tax, taking effective payback in this example to a little over five years. The detail, including the 50% special-rate first-year allowance route, is in our capital allowances article.
The five levers that actually move payback
1. Self-consumption share. The dominant lever. Push the example’s self-use to 85% — cold storage, shift manufacturing, anywhere that never really switches off — and payback heads toward six years. Drop it to 50% and it stretches toward nine, which is the point where a smaller array, or battery storage, is the better design and the one we will recommend instead.
2. Your import price. We model at 17p — the cautious end of the 2025 manufacturing average — but plenty of businesses buy power at more. At 20p per kWh, the same example pays back in about six years without anything else changing. Your bill beats our average, which is why we model from it.
3. Yield and orientation. We ran the European Commission’s PVGIS model for Durham rather than quoting a national figure: about 937 kWh per kWp a year at an ideal 35° south-facing pitch, 841 on the shallow-pitched sheet roof most commercial buildings actually have, 770 facing east or west. That spread — not latitude — is why two identical systems three miles apart can be a year apart on payback, and why 800–950 is our honest planning band.
4. Scale. Fixed costs — survey, scaffold, design, the grid application — spread across more panels as systems grow, which is why the £700–£1,100 band exists at all. Government cost data shows the same curve: the median installed cost per kW falls by roughly a third between the smallest band of systems and the 10–50 kW band alone, and the curve keeps falling into the hundreds of kilowatts.
5. The tax treatment. Covered above — and worth ranking this high because it is the one lever that acts on the whole capital sum at once rather than on the yearly benefit.
What flatters other people’s numbers
When a competing payback claim looks dramatically better than ours, it is usually one of four assumptions doing the flattering. A national-average yield applied to a North East roof. An import price from a worst-case tariff. An assumed electricity-price escalator compounding the savings upward year after year. And — the quiet one — no budget line for the inverter, which is working electronics with a realistic 10–12 year life inside a 25–30 year panel system. Our payback modelling includes that replacement; make sure any quote you compare does the same.
Our own savings calculator runs the other way: no degradation, no price-rise assumptions, no tax effects — each would flatter the result, and we would rather the surprises ran in your favour. Put your own building through it; it asks for no contact details.
After payback, the asset keeps working
Payback answers “when am I made whole?” — but the reason to do this is what happens afterwards. A system that pays back in year seven has around two decades of designed panel life still ahead of it, generating against whatever electricity costs by then. In the worked example, the year-one benefit is about 14% of the capital — arithmetic, not a promise, and it repeats every year the sun comes up.
Two rules hold that position steady. Eligible onsite commercial solar is 100% exempt from business rates in England until 31 March 2035, applied automatically by the Valuation Office Agency, so the array does not creep into your rateable value while it earns.
And export income under the Smart Export Guarantee remains available for installations up to 5 MW — covering effectively every commercial rooftop in the North East — as the margin on top, not the case itself.
Get the number for your building, not the average
Everything above is honest, and all of it is still an average. Your payback lives in your half-hourly consumption data, your roof’s pitch and orientation, and your actual tariff. Send us the building and a recent bill, or run the calculator first — and if the answer for your site is “not yet”, that is the answer you will get, with the numbers that would need to change before it became “yes”.