Despite increased government backing for renewable energy adoption, many small and medium enterprises (SMEs) in the UK are finding it difficult to join the green energy transition due to high upfront costs associated with clean technologies like solar panels.
While large-scale government-funded projects such as the £200 million investment in solar photovoltaic (PV) installations across NHS hospitals and schools are projected to deliver long-term savings of up to £400 million, a significant number of smaller businesses remain on the sidelines. Geo Green Power, a leading renewable energy installer, estimates that nearly one-third of UK SMEs feel excluded from this transition because of the financial burden of initial investment.
A standard 100kWp solar PV installation, for example, costs about £70,000. Although it can generate estimated annual savings of £20,000 in energy costs, many SMEs are unable to make that upfront commitment. For businesses already dealing with higher national insurance contributions, increased minimum wage obligations, and rising business rates, the financial leap is simply too steep. Broader economic uncertainties, ranging from trade tensions to the pressures of competing with AI, further compound the issue.
Geo Green Power points to alternative models that could ease this barrier. Power Purchase Agreements (PPAs), commonly used by large corporations like Tesco and Amazon, allow businesses to install solar systems without any upfront cost. Instead, they pay a fixed rate for energy generated over a long-term period, typically 15 years providing both cost stability and access to clean power.
Other options available to SMEs include leasing solar equipment, applying for grant schemes, or seeking asset finance packages tailored to renewable energy projects. These approaches, according to Geo Green Power’s Managing Director, James Cunningham, are already helping some businesses embrace solar technology.
He noted that advances in solar systems have significantly improved their efficiency and affordability. “We are regularly working with businesses that use finance options like PPAs to start benefiting from solar energy without the upfront cost,” Cunningham said.
While the UK’s broader clean energy ambitions continue to progress, the path to net zero will require tailored financial solutions that ensure SMEs are not left behind in the renewable transition.
