Energy strategy
Business electricity prices: why on-site generation is now a cost decision
Most businesses negotiate the unit rate and ignore the rest of the bill. The non commodity elements are where on-site generation quietly changes the numbers.
19 August 2026 · GRID Asset Finance · 6 min read
Read the whole bill, not the headline rate
A commercial electricity bill is a stack. There is the wholesale commodity element, then standing charges, network charges for transmission and distribution, balancing costs, policy and levy costs including the Climate Change Levy where applicable, and VAT on top.
When a broker quotes a competitive renewal, they are usually competing on one part of that stack. The rest arrives regardless.
Why self consumption is worth more than export
Every kilowatt hour a business generates and uses on site is a kilowatt hour it does not import. That avoids the delivered cost, not just the commodity price, which is why the value of self consumed solar is typically much higher than the value of exported solar.
It also explains why two identical solar arrays can produce very different returns. A site that runs machinery through the middle of the day uses most of what it generates. A site that operates in the evening exports it cheaply.
- Match generation to the hours the site actually draws power
- Size the system to the load profile, not to the available roof area
- Consider storage where generation and demand do not line up
- Model the delivered cost avoided, not just the wholesale price
Where storage earns its place
Storage shifts energy from when it is produced or cheap to when it is needed or expensive. On a commercial site that can mean holding midday solar for an evening shift, or reducing the peak that drives capacity related charges.
It is not automatically worthwhile. The case depends on the spread between periods, the site peak and how predictable the load is. That is a data question, and half hourly data answers it.
Turning a cost problem into an asset decision
Energy spend is an operating cost that leaves the business every month with nothing to show for it. On-site generation converts part of that spend into an owned asset with a useful life measured in decades.
Funded properly, the monthly cost of that asset can sit alongside the saving it creates rather than ahead of it. That is the practical reason on-site generation has become a finance conversation as much as an engineering one.
Common questions
Why are UK business electricity prices so high?
The delivered price includes wholesale energy plus standing charges, transmission and distribution network costs, balancing costs and policy levies. Several of those elements move independently of wholesale prices, so bills can stay high even when wholesale falls.
Does commercial solar reduce the whole bill or just the unit rate?
Electricity generated and consumed on site avoids the delivered cost of that unit, which includes network and policy elements as well as the commodity price. Exported electricity earns considerably less, which is why self consumption matters.
Is battery storage worth it for a commercial site?
It depends on the load profile, the price spread between periods and the site peak. Where demand and generation are poorly matched, or where peak demand drives charges, storage can be strong. Half hourly data is the fastest way to find out.
More insight
- GRID adds Power Purchase Agreements to its UK energy routes
GRID now helps UK businesses compare a commercial Power Purchase Agreement with solar and energy asset finance before committing to a route.
- Capital allowances on commercial solar: what UK businesses actually claim
How capital allowances work on commercial solar in the UK, why solar sits in the special rate pool, and how the Annual Investment Allowance and the 50% first year allowance affect year one cash.
- Grid connection delays: the line item that breaks UK energy project budgets
Why DNO connection timescales and supply upgrade costs derail UK solar, battery and EV charging projects, and how businesses plan funding around them.