Manufacturing: Commercial Solar PV

Why commercial solar PV makes sense for manufacturing and factories

Manufacturing sites have the best solar economics of any commercial building type in the UK, and the reason is simple. A factory runs a high, steady daytime process load, so it consumes most of what its roof generates the moment it is produced. Self-consumption on a well-designed factory array routinely tops 80%, and that single figure is what drives the strongest payback of any sector covered here. Every unit of solar you use on site displaces grid electricity at 25p to 45p per kWh; every unit you export earns far less. The more you self-consume, the harder the numbers work, and factories self-consume more than anyone.

There is a second structural advantage. Most manufacturing sites already have a three-phase, often HV, supply on site to feed motors, compressors and process plant. That existing infrastructure simplifies the connection of larger inverters and takes some of the friction out of scaling a system to genuine size. Where roof area falls short of demand, a factory site frequently has the yard space to add ground-mount or a solar carport, so the design is rarely constrained the way a town-centre office is. For energy-intensive processes, the Industrial Energy Transformation Fund was aimed at decarbonising industrial and manufacturing plant but is now closed to new applications (gov.uk).

Put those together and a factory becomes close to the ideal candidate. Large unshaded roof, heavy daytime load, existing electrical capacity, dedicated grant support, and a finance director already tracking energy as a line item that has doubled since 2021. If you want to see how the capital stacks up in isolation, the typical costs and payback page breaks pricing down per kWp across the full size range, and the savings calculator lets you model your own consumption.

The factory load profile and self-consumption

Solar pays back on self-consumption, not headline capacity, and the factory load profile is why this sector wins. A typical manufacturing plant draws a large, flat baseload through the working shift: compressed air, extraction, process heating and cooling, motors, conveyors, refrigeration and lighting all running together from early morning to late afternoon. That demand curve maps almost perfectly onto the solar generation curve, which peaks through the middle of the day. When your consumption shape and your generation shape line up, very little of the power ever leaves the site.

Most commercial buildings with 09:00 to 18:00 occupancy reach 55% to 75% self-consumption without any storage. A factory with a genuine process load pushes past that, often to 80% and beyond, because the demand does not dip at lunchtime or drop off at weekends the way an office does. Sites running a second shift, overnight refrigeration, or a 24/5 line have baseload outside daylight hours too, and that is exactly where battery storage earns its place. Adding storage lifts self-consumption into the 80% to 95% range and is usually worth modelling on any system above 100 kWp or where evening and overnight load is significant.

None of this should be estimated from roof area or floor space. Sizing should come from your half-hourly meter data, the actual half-hourly record of what your building drew across a full year. That is the only way to see the real shape of your demand, model self-consumption honestly, and set the system size that maximises the value of every panel rather than overbuilding into low-value export.

System sizing for a factory

Manufacturing systems span a wide range because the sector does. A small light-industrial unit might take 200 kW; a large process plant can justify 2 MW. In panel terms that runs from roughly 370 panels at the small end to around 3,700 at the top, occupying somewhere between 1,200 and 12,000 square metres of roof. The design target on almost every factory is annual generation equal to 60% to 85% of current consumption, which captures the bulk of the saving while avoiding the point where you are exporting large volumes at low value.

The useful rule of thumb is that 1 kWp of PV needs about 5 to 6 square metres of unshaded roof and generates roughly 900 to 1,000 kWh a year in the UK. Across the manufacturing range that means annual generation of about 184,000 kWh at the small end and up to 1,840,000 kWh on a full 2 MW system, displacing in the region of 42 to 420 tonnes of CO2 every year. Those are meaningful numbers for Scope 2 reporting and for the supply-chain sustainability questions that increasingly filter down from larger customers.

Where a factory's demand outstrips its available roof, the design does not stop at the roofline. A combination of rooftop PV, a ground-mount array on spare yard land, and a solar carport over staff or fleet parking can lift total capacity to meet the load. The point is always to match generation to consumption, then decide whether storage is worth adding on top. If you want to sketch your own figures before speaking to anyone, the savings calculator is the fastest starting point.

A worked cost and payback example

Manufacturing projects typically sit between £150,000 and £1.5m fully installed, and the sector's average simple payback is around 5 years, the shortest of any building type covered here. The reason, again, is self-consumption: when you use 80%-plus of what you generate, almost every unit displaces expensive grid power rather than earning a modest export rate.

The table below shows how the capital and payback move across three illustrative factory sizes. Figures are indicative modelled illustrations drawn from current per-kWp pricing, not delivered projects; a firm proposal should come from a yield model built on your own data.

System size	Indicative installed cost	Annual generation	Typical self-consumption	Simple payback
250 kW	£190,000 to £240,000	approx. 230,000 kWh	80%+	5 to 6 years
500 kW	£350,000 to £425,000	approx. 460,000 kWh	80% to 88%	5 years
1 MW	£600,000 to £750,000	approx. 920,000 kWh	85%+	4 to 6 years

The headline price is not the net cost for a profitable company. 100% Annual Investment Allowance lets a limited company deduct the full capex from taxable profit in the year of purchase, an effective saving of roughly 25% for a business paying corporation tax. On a £600,000 system that is around £150,000 back through reduced tax, so the effective net outlay is closer to £450,000. VAT is reclaimable in the normal way for a VAT-registered business, and the Smart Export Guarantee pays for whatever surplus does reach the grid, typically 4p to 15p per kWh depending on tariff and supplier. Because factory self-consumption is so high, export is a small part of the picture, but it is not nothing. For the full breakdown of tax relief and grant routes, see grants and funding routes.

Planning, compliance and grid connection

Most factory rooftop arrays fall under Permitted Development (Class J of Part 14 of the GPDO 2015), subject to the usual size and siting limits, so no full planning application is needed for the typical install. Ground-mounted arrays above the permitted-development thresholds do require a planning application, which is worth factoring into the timeline if roof area alone will not meet demand.

Grid connection is where the manufacturing timeline is really set. Larger connections mean a full G99 application to your Distribution Network Operator, and above roughly 1 MW there is the real possibility of network reinforcement being required, which can stretch timescales to 6 to 18 months. Export limitation under G100 is often used to secure a connection quickly and avoid the cost of reinforcement, capping export while leaving self-consumption untouched. Because self-consumption is what drives factory economics, an export-limited system frequently loses very little value while gaining a much faster route to energised. The DNO application is best submitted early, usually before the site survey, because it is almost always the critical path.

Two compliance points are specific to industrial buildings. First, CDM 2015 applies to the construction works on any larger install, which means proper principal-designer and principal-contractor arrangements, not a two-man crew turning up unannounced. Second, older factory roofs may carry asbestos cement, so any building constructed before 2000 gets an asbestos management survey before work begins, and sometimes a roof replacement is the honest recommendation. Roofs over about 1,000 square metres also get a structural survey for the additional dead load and wind uplift the array will impose.

On accreditation, the work should be covered by MCS commercial certification, NICEIC Approved Contractor registration, RECC or TrustMark membership and an insurance-backed workmanship warranty. Solar also lifts the building's EPC rating, which supports MEES compliance and, on the balance sheet, tends to add value to the asset.

Funding routes that fit manufacturing

Manufacturing is the one sector with a dedicated national grant for solar and wider decarbonisation, alongside the standard tax relief and finance routes. The right approach depends on your capex appetite, your tax position and whether you own or lease the building.

• 100% Annual Investment Allowance. The primary lever for any profitable company. Solar PV qualifies as plant and machinery, and the full capex is deducted from taxable profit in year one up to the £1m AIA cap, which covers most manufacturing installs. Solar is special-rate expenditure, so anything above the cap does not qualify for full expensing; the balance is relieved through the capital allowances pool instead.
• Industrial Energy Transformation Fund (IETF). Closed to new applications: the government confirmed on 3 July 2025 that there will be no further extension or competition window, and no successor has been announced; awarded projects continue. It offered grants from £100,000 for energy-intensive industrial and manufacturing sites in England, Wales and Northern Ireland. gov.uk
• Asset finance. Spreads the cost over 5 to 7 years and is usually cash-flow positive from month one, because the finance payment comes in below the bill saving it replaces. You own the system at the end.
• Power Purchase Agreement (PPA). Zero capex. A funder installs and owns the system, and you buy the power it generates at a fixed rate below grid. This suits leased sites and boards that will not commit six figures of capital, and it transfers cleanly if the building is sold.
• Smart Export Guarantee. Pays for the surplus you export, typically 4p to 15p per kWh. A small part of factory economics given high self-consumption, but a genuine one.

A good installer models cash purchase, asset finance and PPA side by side, with the IRR for each, so the board sees the real comparison rather than a single pushed route. The full detail sits on the grants and funding page.

Worked example: hypothetical factory

Consider a hypothetical food manufacturer running a 24/5 process line in a 9,000 square metre plant in the North West, with an annual electricity spend of around £310,000. The demand profile would suit solar: high, steady load through both day shifts, with an early-shift ramp that starts before peak generation. That last point matters, because it makes a strong case for pairing the array with storage.

Consider a hypothetical 750 kW rooftop system alongside a 400 kWh battery. Modelled annual generation comes to around 690,000 kWh, and self-consumption reaches roughly 88%, with the battery covering the early-shift ramp before the roof is producing at full output. Modelled annual saving is in the region of £165,000, giving a simple payback of about 4.5 years on a system carrying a 25-year performance warranty. In this example the system is paid for by cash purchase, and the tax relief through 100% AIA reduces the effective net cost further still. These are modelled illustrative figures, not a delivered project.

How much do solar panels for a factory cost in the UK?

A typical UK factory installation runs from £150,000 to £1.5m fully installed, depending on system size. Cost per kWp is typically £750 to £950 for systems above 250 kW, falling toward £600 to £800 above 500 kW. In real terms a 250 kW system is around £190,000 to £240,000 and a 1 MW system around £600,000 to £750,000. After 100% Annual Investment Allowance, the effective net cost for a profitable company is roughly three-quarters of the headline price. Model your own figures on the savings calculator or see the full cost guide.

Why do factories get better solar payback than other buildings?

Because of self-consumption. A factory's high, steady daytime process load means it uses 80% or more of what its roof generates, and every self-consumed unit displaces grid electricity at 25p to 45p per kWh rather than earning a modest export rate. That is why manufacturing sees simple payback around 5 years, the shortest of any sector, while lighter-use offices and retail sit at 6 to 8 years. High self-consumption is the single factor that determines commercial payback, and factories have the most of it.

Can we install solar on an asbestos or older factory roof?

Any building constructed before 2000 gets an asbestos management survey before work begins, because older factory roofs may carry asbestos cement. Where the survey finds it, the honest recommendation is sometimes a roof replacement before install rather than fixing an array to a failing roof, and a reputable installer will say so if that is the case. Roofs over about 1,000 square metres also get a structural survey for the extra dead load and wind uplift. Non-penetrative clip-fix mounting suits most metal industrial roofs and preserves the roof warranty.

How long does grid connection take for a large factory system?

Larger factory systems need a full G99 application to your DNO, and above roughly 1 MW there is a real possibility of network reinforcement, which can push timescales to 6 to 18 months. Export limitation under G100 is often used to secure a faster connection and avoid the cost and delay of reinforcement, capping export while leaving your high self-consumption untouched. Because the DNO application is best submitted early, usually before the site survey, the grid connection is managed as the critical path from day one rather than discovered late.

Do we need to take our production line offline for the install?

No. Rooftop work happens above the building and is planned around your production schedule, with the electrical connection and commissioning sequenced to fit a planned shutdown or a low-demand window where one is needed at all. CDM 2015 governs the works on larger installs, which means proper coordination, method statements and site management rather than disruption to the line. The programme should be planned with your facilities team so the plant keeps running.

What other sectors do you cover?

The design principles carry across a range of building types. Factories share a lot with warehouses and industrial units, which offer the same large steel-portal roofs and daytime baseload, and with agricultural buildings where grain drying and cold storage create similar strong on-site demand. If you are ready to move, request a quote; a good installer will model your factory from your half-hourly data.