How Commercial Solar PV Works: A Manufacturer’s Guide

If you run the numbers for a manufacturing site but have never had solar explained without a sales pitch, this guide is for you. It walks the electricity from the roof to your machines in plain English, so you can read a proposal, ask the right questions, and see exactly where the savings come from.

We follow one unit of solar electricity on its journey: sunlight hits a panel, the current is converted, it flows into your distribution board, your machinery uses it, and the rest is exported. Along the way we cover the two things that trip up most finance directors: the G99 grid connection, and why self consumption, not roof size, decides your payback.

Step 1: The panels turn daylight into DC electricity

A solar panel is a sheet of crystalline silicon cells behind toughened glass. When daylight lands on it, the cells produce direct current (DC) electricity, with no moving parts and nothing burning. Output peaks around midday, and it still makes power on overcast days.

Panels are wired into long strings and bolted to your roof on a mounting system chosen to suit it: rail or clip fix on profiled metal, clamp fix on standing seam (no penetration), or ballasted trays on flat membrane and concrete roofs that need no holes drilled at all.

You need roughly 5 to 6 square metres of roof per kW using modern 450W plus modules, so a 500 kW array needs around 2,500 to 3,000 square metres of clear roof. Manufacturing sites suit solar because they combine large, unobstructed roofs (1,200 to 12,000 square metres is common) with a strong daytime load. That is close to the ideal profile for commercial solar, which is why a well sized array can self supply 30 to 60 percent of a plant’s annual demand.

Step 2: The inverter converts DC into usable AC

Your machinery, motors, compressors and lighting all run on alternating current (AC) at 400V three phase, but the panels produce DC. The inverter bridges the two: it converts panel DC into grid quality AC, synchronised to the exact frequency and voltage of your supply so it can run in parallel with the grid.

The inverter is the brain of the system. It constantly adjusts to extract maximum power as light levels change, and it is the component that talks to the grid and to your monitoring platform. It is also the part most likely to be replaced once during the system’s life: panels are warranted for 25 years, but inverters are typically warranted 5 to 12 years and swapped out once over a 30 to 35 year real world life.

Inverters sit somewhere ventilated near your main switchgear to keep cable runs short. On chemical or process sites with hazardous zones, inverter location and rating (DSEAR and ATEX) is designed in carefully, and on foundry sites it is selected to cope with harmonics and power quality.

Step 3: The electricity feeds your distribution board

From the inverter, the AC electricity runs to your main distribution board, the LV panel that already feeds the whole site. This is the junction where solar meets grid, wired so that solar generation simply reduces what you draw from the grid, moment by moment.

Here is the key point for how the money works. Electricity takes the path of least resistance, and the solar sitting on your own distribution board is electrically closer than the grid. So your machinery uses the solar first, automatically, and only tops up from the grid for whatever the panels are not covering at that moment. There is no switchover and no risk to production if the sun goes behind a cloud, because the grid seamlessly fills any gap in real time.

Step 4: Self consumption, where the savings are made

This is the most important concept in the guide. Every kWh your site consumes on the spot, called self consumption, replaces a kWh you would otherwise buy from the grid. UK industrial import prices are currently around 18 to 32p/kWh, so every self consumed unit saves that full retail rate.

Manufacturing sites are unusually good at this because the load profile matches the generation curve. Compressors, motors, process heat, refrigeration and machinery run through the working day, exactly when the panels are generating. Food and beverage sites with refrigeration and ovens near 24/7, or pharma sites with cleanroom HVAC on a flat baseload, self consume a very high share, which is why their paybacks are among the fastest.

This is why solar is sized to your baseload, not your roof. The working rule is to install 70 to 90 percent of peak daytime demand, so that almost everything generated is used on site rather than spilled cheaply to the grid. We pull at least 12 months of half hourly meter data and model the load shift by shift before settling on a size, typically 200 to 800 kW for UK manufacturing. Our guide to sizing a manufacturing solar system covers the method.

Step 5: Export, what happens to the surplus

At times, usually a bright weekend or a quiet shift, the panels generate more than the site is using. That surplus flows back onto the grid, and you are paid for it under the Smart Export Guarantee, the Ofgem backed scheme under which licensed suppliers pay an export tariff for every unit you send back.

Export tariffs are supplier set and typically run 4 to 15p/kWh, so it pays to shop around. But notice the gap: you save 18 to 32p on a self consumed unit and earn only 4 to 15p on an exported one. That is the whole reason systems are sized to baseload, so self consumption stays the main event and export just mops up the surplus.

Where each solar unit goes	What it is worth to you	Priority
Self consumed on site	18 to 32p/kWh saved (avoided grid import)	Primary, maximise this
Exported to the grid	4 to 15p/kWh earned (SEG tariff)	Secondary, mops up surplus
Stored in a battery for later	Import avoided on a night shift or red band period	Situational, model case by case

Where battery storage fits

For most manufacturers with a daytime heavy load, self consumption is already high and a battery adds little. Storage starts to pay above roughly 250 kW of PV where night shifts run, where DUoS red band charges are heavy, or where the site wants to trade flexibility. We model the battery case alongside the array so you can see whether it earns its keep. Our battery storage with manufacturing solar guide covers when it stacks up.

Step 6: Monitoring, so you can prove and protect the value

Every commercial system comes with remote monitoring, and for a manufacturer this is not a nice to have. The platform reports generation, self consumption and export in real time, with automated alerts if a string or inverter underperforms, so a fault is caught in days rather than as an annual shortfall.

Monitoring also produces the data your customers now demand. Every kWh of self consumed solar directly reduces your market based and location based Scope 2 emissions, and the figures feed straight into CDP, SBTi and EcoVadis submissions. For manufacturers under supply chain pressure from the likes of JLR, Nestle and Unilever, an on site array with clean data behind it is one of the most verifiable decarbonisation measures you can put in front of a customer audit. Maintenance is light: an annual visit for electrical inspection, inverter firmware and panel washing, typically £8 to £12 per kW per year above 250 kW.

Step 7: The G99 grid connection, the part that takes longest

Because your solar runs in parallel with the grid and can export to it, your Distribution Network Operator (DNO) has to approve the connection. For any install above 17 kW per phase, which covers effectively every manufacturing system, this means a G99 application. It is a formal engineering assessment that confirms the network can accept your generation safely.

This is the longest item in the project programme and the one most likely to surprise a finance director. Typical DNO study responses run to around 65 working days, and actual connection dates commonly land 6 to 18 months out on capacity constrained networks. This is why we submit the G99 application on day one, alongside the structural survey, so the connection clock starts immediately rather than after contract. Our guide to G99 grid connection for manufacturing walks through the timelines in full.

The install itself must be certified too. An MCS Certified commercial installation is what makes you eligible for the Smart Export Guarantee and your assurance the system was built to standard. Physical installation is usually 4 to 10 weeks and rooftop work almost never needs a production shutdown. The only outage is the final grid connection, typically 4 to 8 hours, scheduled into a planned maintenance window, weekend or holiday shutdown.

What all this means for payback

Bring the journey together and the payback logic is straightforward. The panels generate cheap electricity through your working day, your machinery consumes most of it on the spot at a saving of 18 to 32p/kWh, and the surplus earns a smaller export tariff.

For a typical 500 kW install, that self consumption translates to roughly £45,000 to £90,000 of annual bill reduction plus modest export income. Simple payback lands between 4.5 and 7.5 years depending on baseload, tariff and self consumption share, with an IRR usually in the range of 12 to 22 percent. The flattest, most daytime heavy loads sit at the fast end.

Two things sharpen the case. First, the capital is normally fully expensed in year one under the Annual Investment Allowance, worth up to around 25 percent effective tax relief. Second, you need not use your own capital at all: most installs are funded through a PPA (zero capex, day one savings) or asset finance (spread over 7 to 15 years, typically EBITDA positive from year one). Our ppa vs asset finance vs cash guide compares all three routes.

None of these figures are guesses. We model every project from your half hourly meter data and share the full discounted cash flow model so your finance team can stress test it. For the numbers on your own site, see the breakdown on our cost page, check what you qualify for on grants and funding, read how this applies to your sector on our manufacturing plants and food and beverage manufacturing pages, or request a free feasibility study on our quote page.