The business case for solar – why 2026 is the year UK businesses should stop buying and start investing in electricity

Article summary 

• Electricity costs are structurally rising and increasingly volatile, driven by non-commodity charges and global geopolitical tensions. 

• Solar is now the cheapest, most predictable form of electricity, fixing costs for 25–30 years. 

• 2026 is a unique window where solar prices are at the bottom and rising: delay means higher capex and higher energy costs. 

Introduction 

For UK commercial and industrial (C&I) energy users, 2026 is not just a good year to consider solar; it is a strategic window unlikely to repeat.   

Electricity prices remain structurally high, non-commodity charges continue to rise, UK sunshine records keep breaking, and global solar module prices have reached an unsustainable floor. Together, these factors make the business case for on-site solar in the UK in 2026 the strongest it has ever been.  

The question is no longer “Should we invest in solar?” but “How much money are we prepared to lose by waiting?”   

A short history of electricity 

When Putin invaded Ukraine, the wholesale electricity price rocketed. Wholesale electricity prices have eased since their 2022 peak, but are still double what they were pre-war / 2022. UK business energy bills remain stubbornly high, with some of the highest electricity rates¹  in the developed economies. More recently, geopolitical tensions in the Middle East, particularly around the Strait of Hormuz, have added further pressure and volatility to global energy markets. 

The future of electricity 

Amid renewed energy price volatility, there is an additional cost burden in the form of non-commodity charges: network reinforcement, balancing costs, and policy levies required to maintain and decarbonise the grid. These costs are rising irrespective of wholesale market movements as outlined in an October 2025 select committee hearing². 

In 2026:   

• Non-commodity costs are set to significantly increase over time.  

• Commodity costs are set to become even more volatile due to ongoing geopolitical pressures.  

Whilst businesses can negotiate their commodity rate, they cannot negotiate their share of network and policy costs. As a solution, solar is arguably the most effective long-term hedge for many businesses against rising non-commodity charges and broader electricity price volatility. How this works is that every kWh generated onsite is a kWh not exposed to these rising charges, so solar fixes most of your electricity cost for 25–30 years, turning a volatile cost base into a stable, predictable one. From a loss-aversion viewpoint, every year you delay locks in another year of unnecessary exposure.  

Solar is already the cheapest electricity in history   

Regardless of your political views, the facts are that solar is the cheapest source of electricity in history. In a landmark 2020 report, the International Energy Agency (2020)³ found that solar is the cheapest source of electricity in history in many regions. This has been reinforced by 2025 International Renewable Energy Agency (IRENA) data⁴ showing that around 90% of new renewable capacity added in 2024 undercuts fossil fuel alternatives. At the same time, global investment trends show that clean energy investment now significantly exceeds fossil fuels, with solar representing the largest single share, according to the IEA’s 2024 Global Energy Outlook Report⁵. 

Regardless of political ideology, the global direction of travel appears increasingly clear. Even regions historically associated with fossil fuel production, such as Texas, have become some of the largest deployers of renewable energy globally, driven primarily by economics, energy security and infrastructure demand rather than political alignment alone. 

For UK commercial and industrial sites, the contrast is stark:  

• 25p/kWh : The average UK grid-supplied electricity (inclusive of non-commodity costs), which is variable.   

• 5p/kWh: commercial & Industrial rooftop solar delivers electricity at this fixed rate.    

• 20p/kWh: representing an 80% saving, which will compound over time.   

Solar module prices are rising: 2026 is the last year of “bottom-of-the-cycle” pricing  

Global module prices collapsed in 2023–25 due to Chinese oversupply. This created today’s historically low prices, but at the expense of manufacturers’ margins.  

The cycle is now turning:  

• Many major manufacturers posted significant losses, selling below cost.  

• China is abolishing its 9% export VAT rebate on solar modules from April 2026.  

• Raw material costs have increased.   

• Module prices have already risen 30%+ since late 2025 as suppliers adjust.  

• Transportation costs have increased due to fossil fuel price rises.  

The conclusion is clear;  the market floor appears to have been reached and is heading upwards. Buying in 2026 allows businesses to secure hardware before global pricing resets higher.  

Waiting means paying more for the same system whilst losing even more money due to higher electricity rates and thus higher operating costs.   

Climate trends are quietly improving UK solar economics  

Australia is often seen as the antithesis of the UK climate and, unsurprisingly, has one of the largest rooftop solar markets in the world. However, despite the electricity rates outlined above, the business case is often stronger in the UK. 

The outdated perception that the UK is “too cloudy for solar” is increasingly misaligned with reality.  Solar works on the daylight irradiance received, with the best generation days often being the brighter but cooler days, as experienced in spring, for example. The UK is becoming consistently sunnier as climate patterns shift due to climate change.  

• 2025 was the sunniest year on record. 

• England recorded its sunniest year ever, with Wales and Scotland close behind, recording near-record levels.   

• Since the 1980s, the UK has warmed by approximately 0.25°C per decade, increasing the frequency of high-pressure, sunny periods.  

Recent UK irradiance and sunshine-hour trends have generally been favourable for solar generation performance. 

The loss-aversion lens: what inaction costs  

Most investment decisions focus on return. Strategic decisions should also account for irreversible loss. By delaying solar investment, businesses incur:  

1. Lost profits due to higher operating costs.   
2. Risk exposure to rising electricity rates .
3. Missed sustainability improvements.  

What forward-thinking businesses are doing now  

In 2026, forward-thinking businesses are:   

• Securing grid capacity, as this is one of the critical paths for a solar project.   

• Locking solar panel pricing to protect against expected global panel price increases.   

• Quantifying the “do nothing” cost and making it visible at the board level.  

• Exploring funding options that divert cash flows from energy companies to solar assets.   

• Choosing the right partner to design, build and maintain their solar system.  

Life on Earth would be unsustainable without the sun. Businesses worldwide are harnessing the power of the sun to generate electricity. Large tech giants, retail behemoths, and titans of industry are deploying solar at speed and scale.   

Conclusion: 2026 is the inflexion point  

Rising electricity rates, commercially competitive solar, coupled with record sunshine, and the final window of bottom-cycle pricing have all aligned in 2026.  

Viewed through a loss-aversion lens, not investing in solar in 2026 is not a neutral decision. It is an active choice to:  

• Overpay for electricity.  

• Remain exposed to rising electricity costs.   

• Miss record-yield years.  

• Purchase the same asset later at a higher price.  

For UK businesses, the question is no longer whether solar makes sense, but what waiting will cost.  

Ineco Energy: Commercial solar solutions defined by excellence and unmatched expertise  

Ineco Energy is a market-leading solar provider, delivering expert, end-to-end commercial and industrial solar rooftop solutions for large sites and properties across the UK. Other services include specialist solar carport and ground-mounted solar farm solutions. 

Rest assured knowing that strict professional health & safety standards and industry accreditations, including NICEIC, MCS, SafeContractor, CHAS, and Constructionline, underpin our process. 

Our solutions are specialised for every step of your solar journey: from feasibility assessment, design, and development, to installation, operations, and maintenance. 

Sources  

1. Trading Economics. (n.d.). United Kingdom Electricity Price. 
2. House of Commons Energy Security and Net Zero Committee. (2025–2026). The cost of energy. UK Parliament Committees. 
3. International Energy Agency (IEA). (2020). World Energy Outlook 2020. 
4. International Renewable Energy Agency (IRENA). (2025). Renewable Power Generation Costs in 2024. 
5. International Energy Agency (IEA). (2024). World Energy Investment 2024.