Solar vs Grid Electricity for UK Manufacturers

Every UK manufacturer buying power faces the same underlying question, even if it rarely gets asked out loud. Should you keep buying all your electricity from the grid, or generate some of it yourself on your own roof? Industrial electricity prices have risen 60 to 120 percent since 2021, which has moved this from a sustainability conversation into a hard cost and risk decision that lands on the finance director’s desk.

The honest answer, for almost every manufacturing site, is that it is not a straight either-or. A correctly sized rooftop array will self-supply 30 to 60 percent of your annual demand. It cannot cover all of it. So the real decision is how much of your load to bring in-house at a fixed lifetime cost, and how to source the balance intelligently. This guide lays out the comparison honestly and gives you a clear framework for deciding.

The two ways to buy a kilowatt-hour

Grid electricity is the default. You buy every unit at your import tariff, currently around 18 to 32p per kWh for industrial users, and that price is a moving target. It is built from a wholesale energy component that spikes with global gas markets, plus network charges (DUoS and TNUoS), policy costs, and supplier margin. You have almost no control over any of those layers. When wholesale prices jumped in 2022, manufacturers absorbed the lot.

Self-generated solar flips the model. You pay the capital cost once (or finance it), and every unit the array produces and you consume on site then costs you nothing further beyond routine maintenance. The lifetime cost of that solar electricity, its LCOE, works out at roughly 4 to 7p per kWh for a UK manufacturing install. That unit is fixed for 25 years and immune to wholesale spikes, network charge increases, and policy shifts. The catch is that solar only generates in daylight and only up to the size your roof and grid connection allow, which is why it offsets a share of your bill rather than all of it.

Solar vs grid: the side-by-side

The table below compares the two sources across the factors that actually drive a manufacturing energy decision. The solar column reflects the self-consumed portion of a typical UK manufacturing install.

Factor	Self-generated solar	Grid electricity
Unit cost	4 to 7p per kWh (LCOE, fixed for 25 years)	18 to 32p per kWh import, and rising
Price certainty	Fixed lifetime cost, no wholesale exposure	Volatile, reset at every contract renewal
Wholesale and network exposure	None on the self-consumed share	Full exposure to wholesale, DUoS, TNUoS and policy costs
Carbon and Scope 2	Direct Scope 2 reduction, feeds CDP, SBTi, EcoVadis	Follows the national grid factor, outside your control
Upfront cost	Capital, or zero capex via PPA or asset finance	None, but no asset and no hedge
Control	You own the asset and the generation profile	Supplier and network control price and terms
Coverage of demand	30 to 60 percent of annual consumption	Whatever you need, on demand, day or night

The pattern is clear. Solar wins decisively on unit cost, price certainty, and carbon. The grid wins on flexibility and instant availability with no upfront cost. Neither is a complete answer alone, which is exactly why the sensible strategy blends them.

The 30 to 60 percent offset ceiling, explained honestly

This is the number that separates a credible proposal from a sales pitch. On its own, rooftop solar rarely covers all demand at a manufacturing site. Most installs offset 30 to 60 percent of annual consumption, and there are physical reasons for that ceiling.

First, solar only generates in daylight, so any night-shift load draws from the grid regardless of array size. Second, manufacturing sites are sized to daytime baseload, not to roof area. The working rule is to install 70 to 90 percent of peak daytime demand to maximise self-consumption and avoid spilling cheap exported units onto the Smart Export Guarantee. Third, roof area, grid connection capacity, and shading all cap the practical system size.

Where a site lands in that 30 to 60 percent band depends heavily on load profile. A food and beverage plant running refrigeration and ovens close to 24/7 has a high, flat daytime baseload that solar matches beautifully, pushing self-consumption towards the top of the range. A single-shift engineering works with a daytime-heavy but variable load sits lower. This is why we always pull at least 12 months of half-hourly meter data before sizing anything, and model the load profile shift by shift rather than as an annual average. Anyone quoting a “100 percent renewable” rooftop system for an energy-intensive site is not being straight with you. For a fuller breakdown of how size maps to output, see our guide to sizing a manufacturing solar system.

Covering the balance: the role of a green PPA

If rooftop solar handles 30 to 60 percent, what covers the rest? Three routes, usually in combination.

On-site battery storage

A battery shifts daytime solar into evening and night-shift hours, lifting self-consumption. It becomes economic 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 in markets such as Dynamic Containment. It is not a fit for every site, so it is modelled, not assumed. Our guide to battery storage with manufacturing solar covers when it pays.

A corporate green PPA

For the demand that rooftop solar and batteries cannot reach, a corporate power purchase agreement is the most common route to a fully renewable supply for heavy industry. Under a PPA you contract for renewable power, typically from a remote solar or wind farm, at a fixed or index-linked price, without owning the generating asset. Combining rooftop PV with a green PPA on off-site generation is how energy-intensive manufacturers get to a genuinely low-carbon, price-stable supply across their whole load, not just the daytime portion.

Continued grid import

Some residual grid import almost always remains, and that is fine. The point is not to eliminate the grid, it is to shrink your exposure to it and fix the price of as much of your load as the economics justify.

Choose solar if, stay on grid if

Here is the decision framework, stripped of jargon.

Choose to invest in on-site solar if

• Your load is daytime-weighted, or you run continuous shifts with a high flat baseload (food and beverage, pharmaceutical, and process sites score especially well here).
• Electricity is now one of your top two or three controllable costs and you want to fix the price of part of it for 25 years.
• You have large, sound, unobstructed roof space, typically 5 to 6 square metres per kW of PV.
• Customers such as JLR, Nestle, GSK or the major grocers are pushing Scope 2 and Scope 3 disclosure down your supply chain, and you need a visible, verifiable decarbonisation measure.
• You can fund it through capital, asset finance, or a PPA, and the modelled payback of 4.5 to 7.5 years clears your investment hurdle.

Stay fully on the grid, for now, if

• Your roof is at end of life or structurally unfit and re-roofing cannot be justified inside the project envelope yet.
• Your site is short-term leased with no landlord agreement and no realistic relocation of the asset.
• Your load is almost entirely on a night shift, so daytime generation would export at low SEG rates rather than offset expensive import.
• A DNO grid-connection constraint or a G99 lead time of 6 to 18 months makes a near-term connection impractical, though this often argues for phasing with a battery rather than doing nothing.

Notice that most of the “stay on grid” reasons are temporary or fixable. An ageing roof can be replaced, often funded alongside the PV, since panels are warranted for 25 years and outlast most industrial roofs. A grid constraint can be phased around. The genuinely permanent blockers are rare.

What it means for your numbers

The commercial case rests on the gap between the two unit costs in the table. You are replacing grid electricity at 18 to 32p per kWh with self-generated solar at a fixed 4 to 7p per kWh, on 30 to 60 percent of your annual demand. For a typical 500 kW manufacturing install that translates to roughly £45,000 to £90,000 of annual bill reduction, plus modest export income under the Smart Export Guarantee.

The capital is normally fully expensed in year one under the Annual Investment Allowance, worth up to around 25 percent effective tax relief. Energy-intensive sectors can stack Climate Change Agreement benefits on top, and larger projects may qualify for the Industrial Energy Transformation Fund. We break down the full picture on our manufacturing solar cost page and our grants and funding guide, and the underlying figures are set out in our manufacturing solar cost guide for 2026.

Just as important as the headline saving is the certainty. Every kWh you self-generate is a kWh whose price you have locked for 25 years, insulated from the next wholesale spike. In an era where energy is treated as a strategic risk rather than an overhead, that hedge often matters as much to the board as the cash saving.

The bottom line

Solar versus grid is a false binary. The grid is not the enemy, it is the flexible backstop that covers your night load and your peaks. Solar is the hedge that fixes the price of the daytime portion you can generate yourself, cheaply, for 25 years. The right answer for almost every UK manufacturer is a rooftop array sized to your daytime baseload, offsetting 30 to 60 percent of demand, with a green PPA and residual grid import covering the balance.

The way to know exactly where your site lands is to model it from your own half-hourly data rather than a rule of thumb. To see your numbers, request a manufacturing solar quote and we will model self-consumption, payback, and the offset percentage from your actual load profile.