Cut energy bills with on-site solar and battery solutions

Why Solar Makes Particular Sense for Agri-Food

The energy profile of agri-food processing is, in many ways, well-suited to on-site solar generation. Large roof areas on processing and storage facilities provide significant generation capacity. Daytime electricity demand – running refrigeration, processing lines, ventilation and lighting – aligns well with peak solar output. And the scale of consumption means that even a partial reduction in grid reliance translates into meaningful cost savings.

A well-designed rooftop solar installation can realistically offset a significant proportion of a site's electricity requirement, with battery storage extending that benefit into periods where generation doesn't match demand – evening hours, overcast days, or peak consumption periods where grid electricity is most expensive. The combination of generation and storage is what shifts solar from a useful supplement to a genuinely strategic energy asset.

Performance warranties on commercial solar equipment typically run for ten or fifteen years, meaning the investment case is not speculative – it is based on a known output profile over a defined period, against which the financial return can be modelled with reasonable confidence

The Tax Environment Right Now

There is an honest conversation to be had about timing, and it starts here: the current UK tax environment for renewable energy investment is unusually favourable, and elements of it have a defined end date.

Businesses investing in qualifying solar installations can currently access the Annual Investment Allowance, which allows the full cost of the asset – up to £1 million – to be deducted from taxable profits in the year of purchase. Solar panels qualify for full expensing in 2025/26, with the scheme worth up to £25 for every £100 spent at the current 25% corporation tax rate, making this one of the most valuable capital allowance incentives currently available for green investment. For larger installations where the AIA threshold is exceeded, a 50% First Year Allowance applies to remaining qualifying expenditure – although this is a temporary measure due to expire on 31 March 2026. Additionally, the zero VAT rate on solar panel installations is set to last until 31 March 2027, after which it is expected to return to 5%.

The practical effect of these reliefs is to materially reduce the net cost of installation in the year the investment is made, shortening payback periods and improving the overall returns. For a business paying corporation tax at the standard rate, the combination of capital allowances, zero VAT, and operational savings from reduced grid consumption means the financial case for solar is genuinely strong – and the case for acting before certain reliefs expire is not artificial urgency, it is sound commercial logic.

None of this is a substitute for professional advice. The specifics of what your business can claim, how it should be structured, and how it interacts with your accounting period are questions for your accountant. But if you haven't had that conversation yet, it's worth having soon.

Battery Storage: Completing the Picture

Solar generation alone solves part of the problem. Battery storage solves more of it.

The challenge with solar is that generation peaks at times that do not always align with consumption peaks. A battery system captures surplus generation during high-output periods and makes it available when demand is high, but generation is lower – reducing the need to draw from the grid, precisely when grid electricity is most expensive.

For agri-food businesses with early-morning start-up loads, evening processing shifts, or refrigeration cycles running overnight, the ability to store and deploy energy strategically can be the difference between a solar installation that offsets a portion of costs and one that delivers a step-change in energy cost structure. Battery storage assets also qualify for capital allowances under the same framework as solar, making the tax treatment of a combined system straightforward.

From Cost Centre to Capital Asset

Perhaps the most important reframe in thinking about solar investment is this: unlike almost any other action a business can take to reduce its energy bill, on-site generation does not just reduce a cost, it creates an asset. That asset sits on the balance sheet, delivers a measurable return, depreciates over a long operational life, and strengthens the business's position against future energy price volatility.

It also generates evidence. As sustainability reporting requirements tighten – whether driven by customer due diligence, retailer standards, or regulatory disclosure obligations – having a documented, quantified reduction in Scope 2 emissions from renewable generation is more valuable than a commitment to achieve one. Solar is, in that sense, one of the few interventions that works simultaneously as a cost reduction measure, a capital investment, and a sustainability credential.

What a Realistic Starting Point Looks Like

We work with agri-food clients at various stages of this process – from initial feasibility conversations through to helping structure the business case for board sign-off. In our experience, the businesses that move forward most effectively are those that treat energy and tax analysis as parallel exercises from the outset, rather than approaching the sustainability case and the financial case separately.

A straightforward starting point is a consumption audit and a roof or land survey to establish what generation capacity is technically achievable. That, combined with a conversation with your accountant about the capital allowance position in your specific accounting period, gives you the foundations of a decision rather than a vague aspiration.

The technology is mature, the economics are sound, and the tax support – for now – is meaningful. The question is less whether solar stacks up commercially, and more whether the timing and structure of the investment are optimised to make the most of the current environment.

If you would like to explore what on-site solar might look like for your operation, ESG Made Easy can help you think through the sustainability and business case – and point you toward the right technical and financial specialists to take it forward.