Here is the mistake that sinks more commercial solar business cases than any engineering problem. A business uses 200,000 kWh a year. A proposed array will generate 90,000 kWh a year. Someone multiplies 90,000 by the unit rate, calls it the annual saving, and the whole appraisal is built on a number that cannot happen.
It cannot happen because electricity is not a monthly total. It is 17,520 separate half-hour settlement periods, and a generated kilowatt-hour only displaces a purchased one if your demand exists in the same half hour it was generated. Everything else goes out to the grid for a fraction of the price. The ratio between those two outcomes — your self-consumption rate — is the single biggest lever in a commercial solar appraisal, and it is the one most often asserted rather than modelled.
If you are looking for the capital allowances, grid connection and roof survey side of a commercial project, those sit on our main service page. This article is about the half-hourly arithmetic underneath the savings line.
You probably already have the data you need
Half-hourly consumption data is not something you have to commission. Most non-domestic sites already generate it.
Sites with a maximum demand above 100kW have been half-hourly metered for decades and already settle that way. Below that, Elexon’s P272 modification made half-hourly settlement mandatory for all metering systems in profile classes 5 to 8 where capable metering is installed, with a final implementation date of 1 April 2017 — those classes had been required to carry an advanced meter capable of remote reading and recording half-hourly consumption since April 2014. If your site is a mid-sized commercial or industrial supply, it is very likely already settled half-hourly.
And the remainder are being migrated. Market-wide Half-Hourly Settlement began moving meters on 22 October 2025, a transition Elexon puts at 19 months, with all eligible meter migrations due to complete by 7 May 2027 and both settlement regimes running in parallel until July 2027. The practical upshot for a business considering solar in 2026 is that half-hourly data is the default, not a luxury.
Your profile class is encoded in the supply number — the MPAN block on your bill. Ask your supplier, or your data collector, for twelve consecutive months of half-hourly import data as a CSV. Twelve months, not three: a solar appraisal built on a summer sample will flatter itself and one built on a winter sample will kill a viable project.
The method: overlay, never average
With a year of half-hourly demand and a half-hourly generation profile for the proposed array, the calculation is mechanical. For every half hour of the year:
- Self-consumed = the lower of generation and demand
- Exported = generation minus self-consumed
- Still imported = demand minus self-consumed
Sum each column across the year. The self-consumption ratio falls out of the first column divided by total generation, and it is a derived result rather than an assumption. Any proposal that opens with "assume 70 per cent self-consumption" has skipped the only step that mattered.
What the overlay reveals is that load shape decides the answer, not load volume. Three common shapes behave very differently.
A Monday-to-Friday office or workshop running roughly eight until six matches solar generation well on weekdays and then exports almost everything it makes for 104 weekend days a year, plus bank holidays. Two sites with identical annual consumption can land a long way apart on self-consumption purely because one of them runs Saturdays.
A continuous process with a flat 24/7 baseload — refrigeration, water treatment, a server room, a plant running shifts — is the best case for self-consumption, because midday generation always has somewhere to go. The constraint stops being coincidence and becomes array size: once peak generation exceeds the baseload, the surplus exports regardless.
An evening and weekend-weighted load — hospitality, leisure, a cold store that pulls down overnight on cheap rates — is the hardest case. Demand and generation are genuinely out of phase, and self-consumption can be far lower than the annual totals suggest.
Checking which of these you are is a ten-minute job once you have the CSV. Plot an average weekday and an average Saturday by half hour, and lay a bell curve peaking around solar noon across them. You will see the answer before you calculate it.
What one self-consumed kilowatt-hour actually saves
Having established how many kilowatt-hours you will self-consume, you need the right value per kilowatt-hour. Build it as a stack, and build it excluding VAT.
The commodity rate from your supply contract is the obvious component and the one everybody includes.
Distribution charges are the component usually left out. Distribution use of system unit rates are time-banded, with each network operator publishing its own band definitions and hours in an annual use of system charging statement. Because the rates differ sharply between bands, a displaced kilowatt-hour is not worth the same amount at eleven in the morning as it is at five in the afternoon. Worth noting honestly: the expensive band in most regions sits in the late-afternoon weekday peak, which in a British winter is after dark — so solar does its best work in the cheaper bands. Take your actual band hours from your own operator’s current charging statement rather than a generic figure.
Climate Change Levy applies to business electricity and is a real avoided cost, because electricity you generate and consume on site does not arrive through a supplier. The main rate for electricity is 0.801p per kWh from 1 April 2026 to 31 March 2027, rising to 0.827p per kWh from 1 April 2027. Suppliers are responsible for charging it; it does not apply to domestic consumers or to charities for non-business use.
VAT belongs outside the model. Business electricity for non-qualifying use is standard-rated, and a VAT-registered business recovers that input tax, so including VAT in the per-kilowatt-hour saving overstates the case. Two exceptions are worth knowing. Electricity averaging no more than 33 kWh per day or 1,000 kWh per month at a single premises is reduced-rated under the de minimis limits, which catches small units and unmanned sites. And where 60 per cent or more of a supply is for qualifying use — domestic, or charity non-business — the whole supply is reduced-rated.
One further VAT point that surprises a lot of business owners: the zero rate on installing energy-saving materials, which runs to 31 March 2027 before reverting to 5 per cent, applies to residential accommodation and, since 1 February 2024, to buildings used solely for a relevant charitable purpose. It does not extend to ordinary commercial premises. A commercial installation is standard-rated, recoverable in the normal way if you are VAT registered — but a village hall, church or charity-occupied building may sit inside the relief where the business next door does not.
What solar does not reduce — leave these out
Two line items get credited to solar in optimistic models and should not be.
Fixed network residual charges. Following Ofgem’s Targeted Charging Review, residual network charges for non-domestic customers became fixed banded charges rather than consumption-based ones — distribution residual charges from April 2022 and transmission residual charges from April 2023. For larger half-hourly sites the band is set by voltage level and capacity. Generating your own electricity reduces your units; it does not move you down a band. Model that charge as unchanged.
Your agreed supply capacity. Solar does not lower an agreed or available capacity in kVA by itself, because capacity is sized for your peak import and your peak import may well occur on a December evening when the array is producing nothing. Reducing capacity charges needs peak import reduction, which in practice means storage or genuine load shifting, not panels alone.
Where the export half of the equation lands
Surplus generation has two routes. The Smart Export Guarantee covers installations up to 5MW, requires certification under MCS or an equivalent scheme, and needs export measured at half-hourly intervals through an export MPAN. Crucially, suppliers set their own SEG rates — Ofgem obliges larger suppliers to offer a tariff but does not set the price, and the tariff does not have to come from your import supplier. Larger systems more often sign a power purchase agreement instead. Either way, model export and self-consumption as two separate revenue lines at two very different rates, because that gap is the reason self-consumption matters at all.
This is also where battery storage earns its place in a commercial model, by shifting midday surplus into the evening so that it displaces an imported kilowatt-hour instead of earning an export rate. Whether that arbitrage justifies the capital depends entirely on the shape you found in your own half-hourly data, which is why the data comes first and the kit comes second.
What to ask for before you sign anything
- Twelve consecutive months of half-hourly import data, used in the model — not an annual total
- The self-consumption ratio shown as a derived output of a half-hourly overlay, with the working available
- Self-consumed and exported kilowatt-hours priced separately, at your actual contract rate and a named export rate
- All savings stated excluding VAT, with recoverability treated correctly for your VAT position
- An explicit list of what is not assumed to fall: fixed residual charges, standing charges, capacity charges
- The generation profile’s assumptions, including array orientation, pitch and shading
Modelled properly, the answer is sometimes better than the annual-total shortcut suggested and sometimes considerably worse — but it is an answer you can put in front of a finance director. Our commercial solar page covers the specification, grid connection and allowances side of a project, and our guide to commercial solar ROI for UK businesses takes the payback analysis further.
If you would like your own half-hourly data run against a proposed array before you commit to anything, that modelling is part of a commercial site assessment.