Solar costs are holding back SMEs from achieving net zero

Despite growing government support for on-site renewables to achieve net zero, small and medium enterprises (SMEs) in the UK are struggling with the up-front costs of clean energy technologies like solar panels.

While recent initiatives, such as £200 million in solar PV installations for NHS hospitals and schools, promise long-term savings of £400 million, many businesses remain hesitant to invest due to financial pressures.

Geo Green Power, a leading renewable installer, estimates that one-third of SMEs in the UK feel excluded from the green energy transition because of the high upfront costs.

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A typical 100kWp solar PV installation costs around £70,000 to install but can generate savings of approximately £20,000 per year in energy costs.

However, for businesses already facing rising costs from national insurance hikes, minimum wage increases, and business rates, this investment remains a challenge. Additionally, external factors like international trade tensions and competition from AI further complicate the financial landscape.

Geo Green Power suggests that solutions like power purchase agreements (PPAs) already used by major companies like Tesco and Amazon—could provide a way forward.

These contracts allow businesses to avoid upfront installation costs while still benefiting from fixed energy rates over 15 years. Alternatives such as leasing equipment or applying for grant schemes and asset finance packages may also be viable options.

Geo Green Power Managing Director James Cunningham emphasized the potential of solar technology, saying, “Advancements in solar have made systems more efficient and cost-effective. We are regularly working with businesses that use finance options like PPAs to start benefiting from solar energy without the upfront cost.”