Maximising ROI on Commercial Solar Panel Installations

With benefits including reducing your energy bills, enhancing your brand reputation and cutting your carbon footprint, it’s no surprise that businesses transitioning to solar energy are continuing apace. But as with any investment, those putting the money in will be expecting a return on it, so it’s important to understand how solar panel installations interact with those returns. 

Understanding Solar Panel ROI

Return on Investment (ROI) is at the core of our entire economic system. If somebody is putting money into a project, it’s reasonable for them to feel confident that they will profit from it.

The price of solar panels has dropped dramatically in recent years, but they are still a significant financial commitment for many businesses to make, with some costs coming upfront. Those initial investment costs aren’t the only factor that affects ROI either. The amount of money that will be recouped from energy savings has to be taken into account, as well as any government incentives and subsidies received and maintenance and upkeep costs. 

Calculating Your Solar Panel ROI

1. Subtract your initial investment from your lifetime savings. Don’t forget to make sure that you include everything, because this figure represents your potential solar ROI over the lifetime of your system.

2. Divide your solar ROI by your initial investment and multiply the result by 100. This is your solar ROI given as a percentage.

For example, lifetime savings of £50,000 minus an initial investment of £40,000 gives you a solar ROI of £10,000. Divide the ROI by that initial investment and multiply by 100, your result is a solar ROI of 25%. This is more than double the national average ROI of 10%, meaning that this solar panels project could be a good investment for your business. 

You’ll also need to bear in mind that your return on investment will vary depending on where you live. This is in part due to differences in climate and annual sunny days, but also to regionally-specific solar costs and incentive programmes. It’s also critical to take into account the lifespan of the panels. They should come with a guarantee, which normally lasts for twice the amount of time that it takes to pay any investment down in full. 

Maximising Your Solar Panel Investment

Of course, you will want to maximise this return, and one of the best ways to do this is to increase the efficiency of your panels. Ensuring that maintenance and cleaning is carried out promptly is one of the best ways to do this, and even the location and positioning of your panels can impact the efficacy of your panels. South-facing roofs are usually the best place to put them, though your installer should be able to advise further.

There have been considerable technological advancements in recent years which have only increased panel efficiency. Higher-quality solar systems and battery storage components promise greater longevity, durability and efficiency. They may cost more upfront, but the rewards should outweigh that increased initial cost. You should also stay informed about technological advancements in solar systems and battery storage systems. As new improvements emerge, consider upgrading or retrofitting components to capture additional benefits and maintain peak performance.

Navigating Government Incentives and Schemes

Such is the importance of transitioning businesses over to renewable energy sources such as solar that there are at any time numerous incentives and schemes available to act as inducements for businesses to make that leap. These may be at either a local or national level, and it’s always worth checking with your local authority before you start your calculations. 

Balancing the needs of the environment against the needs of our economy is a delicate act. However, it remains the case that transitioning solar power carries significant benefits to businesses bold enough to make that step up. By correctly measuring your ROI, you can give your investors (including yourself, if you’re the one doing the investing) confidence that such an investment would be a wise use of their money. Switchpal can help to negotiate you through this. Contact us today for a consultation, and take those first steps towards bringing your business into a cleaner future for all of us!