How Much Do Solar Panels Cost in 2026?
- Tony Porter
- Jan 14
- 6 min read
As a solar developer working in the Commercial and Industrial sectors, a question that we often get asked early on in conversations is also one of the most logical ones: "What is this going to cost?"
The short answer, albeit not hugely helpful alone, is that you should expect to see costs ranging from around £500/kWp to, at times, over £1,100/kWp.
So, what does ‘£ per kWp’ actually mean?
kWp stands for kilowatt peak, this is a measure of the maximum power output of your solar system under ideal conditions. So, when I say £500/kWp, I am saying it will cost £500 to install each 1-kilowatt peak of generating capacity and to simplify that, 1kWp equates to around about 2 average sized solar panels.
So, now lets translate that into a more useable metric - 1kWp of solar in the UK will typical generate around 850-1000kWh per year (1kWh = 1 unit of electricity). Factors impacting this range include geographic location, shading and orientation etc. So, a 1,000kWp system would therefore generate somewhere between 850,000 to 1,000,000 kWh (units) of electricity per year. To bring this back to £’s, with an average grid electricity rate of 25p used as reference, this means a 1,000kWp system could cost £500,000 to install and be able to generate ~£231,250 of electricity in year one alone.
This somewhat broad range exists because the cost of a commercial solar installation is influenced by a large number of project-specific variables. If you are considering investing in solar for your business, understanding what sits behind these numbers is key. To start making sense of the figures and the at times wide cost range, the first thing we look at is where the solar panels are going, because the physical location often dictates the amount of engineering, steel and labour required. Broadly, we categorise commercial solar projects into three primary types:
Installation Type | Primary Cost Drivers | Typical Cost (per kWp) |
Rooftop | Mounting type (dictated by roof type), AC and DC cable lengths, type of roof access required and building height | £500 – £700 |
Ground Mount | Ground conditions impacting our ability to pile the system and AC/DC cable lengths | £500 – £900 |
Solar Carports | Significant amount of structural steel, as well as foundations and associated civils works | £1,100+ |
Rooftop installations typically remain the most cost-effective form of solar for most customers. We are essentially using your building’s existing structure to support the system. The price variance here usually comes down to the type of roof, for example a modern trapezoidal metal roof is more economical to install solar on when compared to a flat roof due to additional costs associated with the mounting and ballast (weights) which hold down the system. Additionally, the height of the building and pitch of the roof can have a considerable cost implication due to the required degree of scaffolding to enable safe access for our teams.
See an example of our rooftop installations in this case study for Forthglade Foods
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Ground-mounted systems often mean moving slightly higher up the pricing scale because we are creating the structure from scratch. This involves an increase in mechanical labour and time, taken up by tasks such as driving piles into the ground and trenching works. Another thing to consider here is the distance between solar panels and your electrical connection, often these are further away than with rooftop installations. However as with all installations, there is an economy of scale at play here and for the right system size and ground conditions, ground mount installations can at times be more economical and less impactful to site than rooftop installations
See an example of our ground mount installations in this case study for West Buckland School
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Solar carports typically represent the ‘premium’ end of the market. While they are generally the most expensive form of solar per kWp due to the sheer volume of structural steel and civils works, they are becoming more increasingly popular for businesses looking to maximise "dead space", support a transition to electric vehicle fleets or that have no spare land for ground mounts and their rooftops are unsuitable for one reason or another. In addition to ground mount projects, generally electrical connections for carports are further away from the solar than if we were installing on rooftops and to get to these locations, more trenching and therefore remediation works will be required.
See an example of our car port installations in this case study for the North Devon Hospice
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The hidden variables
Whilst the solar panels, inverters, mounting systems, access equipment and labour represent a large chunk of the cost of a solar installation, there are other factors that can have a significant impact on overall costs.
The most well-known of these is the grid connection. Very early on in a project’s development journey, Eden will submit an application to your local Distribution Network Operator (DNO) on your behalf. This process effectively determines whether the local electricity network can accept the additional generation from your solar system. In some parts of the UK, the grid is currently classed as “constrained”. This can mean the DNO may require reinforcement works or network upgrades before your system can be connected, which can at times introduce additional cost and timescales.
Another often overlooked factor is the existing electrical infrastructure on site. The age, capacity and condition of your electrical switchgear, transformers and distribution boards, along with their physical distance from the proposed solar array can also materially affect project cost.
At Eden, we have a very experienced Electrical Engineering Team managed by our Senior Electrical Design Engineer, Steven Rowland. Steven works closely with our design engineers to assess both grid constraints and existing on-site electrical infrastructure, helping to identify the optimum system size and technical connection solution. The aim is always the same: to deliver the required return on investment, while staying within the “sweet spot” for minimising grid and infrastructure upgrade costs wherever possible.
Funding options - Do you need to pay upfront at all?
For many landlords, business owners or FD’s/CFO’s that we speak with, the real hurdle isn't so much the cost itself, but the allocation of capital. Because let’s face it, even with a rapid payback period, spending £500,000 or £1,000,000 of company funds on solar panels ultimately means that money isn't being spent in other areas like new machinery, expansion of business, staff, or R&D for example. This is why we have seen a massive shift toward the Power Purchase Agreement (PPA) funding option in recent years.
Through our parent company Ampyr Distributed Energy (ADE), we are able to fully fund the design, installation and life-long maintenance of the solar array on your building. In this model, the "cost" of the solar panel installation effectively drops to £0/kWp and instead of a large upfront capital outlay (capex), you/your business simply agree to purchase the electricity generated by the solar panels at a rate significantly lower than your electricity provider – Generally offering savings of 30% to 50% compared to your current grid rates.
For most Finance Teams, the PPA funding option is often the ‘cleaner’ solution. It moves the project from the balance sheet to the P&L as a now reduced operational expense (OpEx). In addition, because we own and maintain the system, the operational risk sits with us for the full life of the system, so we are incentivised to ensure the installation is performing as expected. You gain the ESG benefits and the energy price security without touching your credit lines or cash reserves.
Conclusion
Whether you choose to own the asset yourselves or use a PPA to preserve cash flow, it is clear that there is a commercial solar solution that can work for almost every business. The key is ensuring that everything from site suitability, system design and technology selection through to grid strategy, compliance and funding is aligned to maximise long-term performance and returns.
With electricity prices remaining volatile, the real question for UK businesses is no longer simply “How much does solar cost?”, but “What is the cost of staying reliant on the grid?” The right development partner will work with you to navigate the complexity, fully understand your site, and unlock its true solar potential.