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Commercial Solar Finance UK · Independent
Cost Guide · 1MW

How much does a 1MW commercial solar system cost in 2026?

1MWp commercial solar is the threshold where projects start to look like infrastructure assets rather than facility upgrades. DNO engagement is substantial (often dedicated 11kV connection, AVR, sometimes new transformer capacity), structural design requires full engineered assessment of the entire roof system, and project finance tends to involve multi-party stakeholder management. Per-Wp pricing reaches the cleanest commercial tier — but the absolute capital is large enough to need a structured finance decision.

Capex range

£720,000–£950,000

£/kWp

£700–£900

Annual yield

950 MWh

Payback (post-FYA)

2.6–3.5 years

Cost breakdown — where the money goes on a 1MW project

L01 · 53–55%

Hardware (modules, inverters, mounting)

£395k–£470k

Cleanest volume tier — £0.40–£0.47/Wp on hardware. Central inverter architecture standard. Cable runs more substantial.

L02 · 15–18%

Installation labour (M&E, roof access)

£115k–£160k

Substantial multi-month project with 8–14 crew. Specialist mechanical handling. Often staged across multiple roof sections.

L03 · 12–14%

Soft costs (DNO, structural, design)

£90k–£135k

DNO at 1MW is significant — connection studies £15k–£25k, dedicated transformer often required £40k–£80k, AVR fitting standard. Full geotechnical and structural engineering.

L04 · 5–6%

Commissioning & certification

£35k–£50k

Multi-stage commissioning, full IEC 62446 testing, comprehensive monitoring portal with sub-array breakdown.

L05 · 11–13%

Margin and contingency

£75k–£115k

Margin compressed (8–10%) at scale but project complexity needs more contingency (5–7%). Multi-stage payment terms typical.

Worked example: 1MW commercial solar at central pricing

Capex (central)

£825,000

Year-1 corp tax saved

£103,125 corp tax saved (50% FYA × 25%)

Year-1 electricity saving

£200k (950MWh × ~21p blended)

Year-1 net cash

-£522k (after capex, FYA, savings)

25-year lifetime IRR

16–22%

Simple payback

3.3–4.8 years

Run your own numbers in our interactive calculator →

Best fit

Industrial portfolio owners, mega-distribution operators, automotive plants with continuous shift operations, NHS regional estates with PSDS bundled funding, energy-intensive food production, large agricultural cooperatives with seasonal demand profiles.

Best for

A 1MW system suits industrial estate / portfolio anchor, mega-warehouse operator, automotive plant, NHS regional estate, multi-academy trust portfolio, large agricultural cooperative.

Not suitable

Sites where DNO reinforcement would exceed £100k, locations with restrictive planning constraints around large-format commercial PV, organisations without clear long-term occupation horizon (10yr+ minimum).

Other system sizes

100kW system cost

£850–£1,100 per kWp

200kW system cost

£800–£1,000 per kWp

500kW system cost

£720–£900 per kWp

1MW cost FAQs

Is 1MW too big for my industrial site?
The constraint is rarely roof area at 1MW (typically 5,000m²+ rooftop required, well within scope of mega-warehouses and industrial plants), it's DNO connection capacity. Sites with 1MVA+ existing connection capacity can absorb 1MW solar without major reinforcement. Sites with smaller existing connections face £40k–£100k+ in DNO upgrade costs that materially change project economics. Resolve DNO position first.
Does AIA still apply at 1MW?
Partially. AIA caps at £1m qualifying capex per accounting period. £825k system sits within AIA, delivering £206k year-one tax relief at 25% main rate. Above £1m projects, AIA covers the first £1m and FYA covers the rest. Always model both AIA and FYA paths with your accountant given your wider capex position.
What financing is appropriate for £800k+ projects?
Multiple structures viable. Capital purchase remains best on pure 25-year economics for profitable companies — but absolute outlay £825k often stresses working capital. Green loan over 10 years at 6.5% APR covers the gap and retains FYA capture. Finance lease similar. Operating lease and PPA produce lower lifetime values but compelling for capex-constrained organisations. Most 1MW projects we model land on capital purchase or capital purchase + green loan blend.
How do battery + 1MW solar economics work?
1MW solar paired with 500kWh–1MWh battery starts to access capacity market revenue (T-1 and T-4 auctions where storage is large enough), Firm Frequency Response services, and time-of-use arbitrage. Combined economics can lift project IRR by 3–6 percentage points versus solar-only. Battery capex £200k–£400k. Aggregator partnerships needed to access capacity market revenue. Worth full modelling on 1MW projects with grid-services revenue potential.
What lead time should we plan for a 1MW project?
36–48 weeks from contract to commissioning is realistic. DNO process alone often takes 16–24 weeks (connection study, network upgrade, energisation). Procurement 14–18 weeks. Construction 8–12 weeks. Commissioning 4–8 weeks. Year-end FYA capture requires kicking off the DNO process by January for end-March-following-year commissioning.

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