Solar ROI for Medium Factories (150–500kW): The Business Case
The 150-500kW range is the sweet spot for UK industrial solar. Large enough for G99 to be routine, small enough for full AIA coverage, and generating savings of £40,000-£140,000 per year. Here is the complete ROI analysis.
Quick Answer: Medium Factory Solar ROI
A 300kW solar system for a medium manufacturer typically costs £195,000–£270,000 installed. Annual savings of £70,000–£95,000 at 2026 rates give a payback period of 2.5–4 years. This is the sweet spot for UK industrial solar — large enough for G99 connection to be straightforward, small enough for the AIA £1M cap to cover the full installation in a single tax year.
Medium Factory Solar: Complete Cost and ROI Table 2026
Figures based on 2026 installed costs, 28p/kWh electricity rate, 88% self-consumption, 900 kWh/kWp/year generation, and 25% corporation tax for AIA calculation.
| Size | Installed Cost | Annual Generation | Annual Savings (28p) | AIA Tax Saving | After-Tax Cost | Payback |
|---|---|---|---|---|---|---|
| 150kW | £100,000–£135,000 | 135,000 kWh | £37,800 | £25,000–£33,750 | £75,000–£101,250 | 2.5–3.5 yrs |
| 200kW | £132,000–£180,000 | 180,000 kWh | £50,400 | £33,000–£45,000 | £99,000–£135,000 | 2.5–3.5 yrs |
| 300kW (sweet spot) | £195,000–£270,000 | 270,000 kWh | £75,600 | £48,750–£67,500 | £146,250–£202,500 | 2.5–4 yrs |
| 400kW | £255,000–£350,000 | 360,000 kWh | £100,800 | £63,750–£87,500 | £191,250–£262,500 | 2.5–3.5 yrs |
| 500kW | £315,000–£425,000 | 450,000 kWh | £126,000 | £78,750–£106,250 | £236,250–£318,750 | 2.5–3.5 yrs |
AIA Note for 400-500kW systems: At £300,000-£425,000 installed cost, the full system cost falls below the annual AIA cap of £1,000,000 and qualifies for 100% first-year deduction in a single tax year. For companies with annual taxable profit below the AIA threshold, phasing across two tax years is recommended to maximise the benefit.
G99 Grid Connection: What Medium Factory Owners Need to Know
All systems in the 150-500kW range require G99 connection. While this adds some time and cost versus the simplified G98 process, it is routine and well-managed by experienced industrial solar installers.
Typical G99 Process Timeline
Installer submits enquiry to DNO with basic site details. DNO provides initial feasibility feedback within 5 working days.
Full application submitted with equipment schedules, site drawings, protection relay scheme, and fee payment (typically £150-£800).
DNO reviews application, conducts load flow studies, and issues Technical Acceptance Certificate (TAC). Timeline varies by DNO and local grid capacity.
Physical installation proceeds (2-4 weeks for 300kW system). Post-commissioning G99 notification and energisation by DNO.
G99 Costs for 150-500kW Systems
| Cost Item | Typical Cost |
|---|---|
| G99 Application Fee | £150–£800 |
| Protection Relay Equipment | £800–£2,500 |
| DNO Infrastructure (if required) | £0–£15,000 |
| Smart Meter Upgrade | £200–£600 |
| Typical Total G99 Costs | £2,000–£8,000 |
How to Accelerate the G99 Process
Submit the application at project inception — not after panels are ordered. The DNO clock starts on receipt.
Installers with established DNO relationships and complete application submissions avoid common rejection delays.
Agreeing to limit export to grid can speed DNO approval by removing the need for infrastructure upgrades in constrained areas.
The Three-Phase Advantage for Medium Factories
Medium factories with three-phase electrical supplies enjoy significant advantages when installing solar in the 150-500kW range. Understanding your supply configuration helps optimise system design.
Three-Phase Benefits for Solar
- ✓ Allows balanced load distribution across all three phases
- ✓ Supports multiple string inverters for redundancy and performance monitoring
- ✓ Enables larger total system capacity within standard DNO connection parameters
- ✓ Compatible with three-phase machinery — no phase imbalance issues
- ✓ Better grid stability and voltage management at point of connection
Inverter Configuration Options
For a 300kW three-phase system, common configurations include:
- ● 3 × 100kW string inverters — balanced, individual phase control, good redundancy
- ● 1 × 300kW central inverter — lower cost, slightly reduced redundancy
- ● 6 × 50kW string inverters — maximum redundancy, more complex monitoring
Our engineers will recommend the optimal configuration based on your roof layout, shading profile, and operational requirements.
IETF Grant Eligibility for Medium Manufacturers
The Industrial Energy Transformation Fund (IETF) is one of the most significant grant programmes for medium and large UK manufacturers pursuing energy efficiency and decarbonisation projects.
IETF Eligible Sectors for Solar Projects
Case Studies: Medium Factory Solar in Action
Three representative examples from our installation portfolio.
350kW — Ready Meals Producer
35% IETF grant under the food manufacturing sector. G99 approval in 9 weeks. Refrigeration and cooking loads provided 91% self-consumption rate.
420kW — Pressings Supplier
East-West split roof with 210kW each orientation. Twin-peak generation profile matched shift-pattern consumption perfectly. CDP supply chain requirement was key driver.
500kW — Distribution Centre
Large flat roof with optimal south orientation. EV charger bank installed simultaneously to maximise self-consumption. Battery storage added 12 months later.
ROI Sensitivity Analysis: What If Electricity Prices Change?
A well-designed solar ROI analysis should test how returns change under different electricity price scenarios. Here is the sensitivity analysis for a 300kW system with £220,000 installed cost.
| Electricity Price | Annual Savings | Simple Payback | After-Tax Payback | 25-Year Lifetime Savings |
|---|---|---|---|---|
| 22p/kWh (-10%) | £59,400 | 3.7 years | 2.8 years | £1,175,000 |
| 28p/kWh (base case) | £75,600 | 2.9 years | 2.2 years | £1,490,000 |
| 32p/kWh (+10%) | £86,400 | 2.5 years | 1.9 years | £1,700,000 |
| 38p/kWh (+25%) | £102,600 | 2.1 years | 1.6 years | £2,010,000 |
Key finding: Even at electricity prices 10% below current rates, the 300kW system still pays back in under 4 years (3.7 years simple, 2.8 years after-tax). The downside scenario remains very attractive. If electricity prices remain elevated or increase — which most energy market forecasts suggest is more likely than sustained reduction — returns are substantially better than the base case.
Frequently Asked Questions
What is the ideal solar system size for a medium factory? ▼
For medium factories spending £200,000-£500,000/year on electricity, the ideal system size is typically 250-400kW. This range maximises the benefit of three-phase connection capacity, falls well within the AIA £1 million annual limit, and generates enough savings (typically £60,000-£110,000/year) to achieve payback in under 4 years. The 300kW system is the most commonly specified size for medium UK manufacturing sites.
Does G99 add significant cost to a 300kW system? ▼
No. G99 adds relatively modest cost to a 300kW installation — typically £2,000-£8,000 for the connection application, protection relay equipment, and any DNO-required infrastructure upgrades. Against an installation cost of £195,000-£270,000, this represents less than 3-4% of total project cost. The primary impact of G99 is time: allow 8-16 weeks for DNO approval on a 300kW three-phase system.
Can I phase a medium factory solar installation? ▼
Yes, and phasing can be financially advantageous for two reasons. First, if your annual taxable profit is less than £1 million, phasing across two tax years allows you to claim full AIA on each phase. Second, phasing allows you to assess actual generation and self-consumption data from Phase 1 before committing to the full system design of Phase 2. Typical phasing: 150-200kW in Year 1, then expand to 350-500kW in Year 2 once performance data confirms the investment case.
What grants are available for 300kW solar systems? ▼
Medium-sized manufacturers may qualify for the Industrial Energy Transformation Fund (IETF) for up to 30-50% of eligible project costs. UKSPF grants are also available for qualifying companies. Additionally, the AIA regime allows 100% first-year deduction — grants reduce the AIA base cost but the remaining cost still qualifies for full AIA relief. For a £270,000 installation with £80,000 IETF grant, the AIA applies to £190,000, saving a further £47,500 in tax.
How long does G99 take for a 200kW system? ▼
G99 approval for a 200kW system typically takes 8-16 weeks from application submission to receiving the Technical Acceptance Certificate from the DNO. The timeline varies by DNO (National Grid Electricity Distribution, UK Power Networks, Northern Powergrid, SP Energy Networks, and Electricity North West all have different process timelines). Applications submitted in Q4 can experience longer times due to DNO workload. Your installer should submit the G99 application at the start of the project, not at the end, to avoid delays to your installation programme.
Related Guides and Resources
Factory Solar Panel Costs
Full 2026 pricing guide including all cost components.
Three-Phase Solar Integration
Technical guide to three-phase solar integration for factories.
Grants and Funding 2026
All IETF, UKSPF and other grants for industrial solar.
Solar Financing Options
PPA, lease, and asset finance options for medium factories.
ROI Calculator
Model your specific payback period with your own numbers.