Warehouse solar ROI varies by site — typical UK projects achieve 4-6 year simple payback, 18-25% post-tax IRR, and £1.5-£5m positive NPV over 25 years. The drivers are: system size, self-consumption ratio, grid tariff rate, capital allowance treatment, and any grant funding. This page explains how to model warehouse solar ROI properly — the inputs that matter, the assumptions to challenge, and the financial outputs your finance director will want to see. We also offer free DCF modelling on your specific building from half-hourly meter data.
The five inputs that determine warehouse solar ROI
Most online solar calculators give generic numbers. Real warehouse solar ROI depends on five site-specific inputs. (1) System size (kW DC): determined by roof area, structural capacity, and DNO export limit. Larger systems have lower per-kW cost and higher absolute return but lower self-consumption ratio (more export at lower SEG rates). (2) Self-consumption ratio (%): the share of generation used on site versus exported. Modelled from half-hourly meter data and PV generation profile. Varies from 65% (single-shift cross-dock) to 95% (24/7 cold storage). The single most important driver of payback. (3) Grid tariff (p/kWh): the avoided cost when self-consuming solar. UK warehouses typically pay 16-26p/kWh blended day rate in 2026. Higher tariff = faster payback. (4) Capex (£/kW installed): scales with system size — £800/kW for 250 kW, down to £650/kW for 3 MW+ rooftop. Grant funding reduces effective capex. (5) Capital allowance treatment: 100% AIA up to £1m, Freeport/EZ ECA above. Net post-tax capex 25% lower than gross capex for AIA-eligible projects.
Typical warehouse solar ROI by system size — 2026 benchmarks
250 kW system: £200k-£250k capex, 230,000 kWh/yr generation, 85% self-consumption typical. Annual saving: £42k-£52k. Simple payback: 4.5-5.5 years. After-tax cash payback: 3.4-4.2 years. 500 kW system: £375k-£475k capex, 460,000 kWh/yr generation, 82% self-consumption. Annual saving: £78k-£95k. Simple payback: 4.5-5.5 years. After-tax: 3.4-4.2 years. 1 MW system: £700k-£800k capex, 920,000 kWh/yr generation, 78% self-consumption. Annual saving: £150k-£175k. Simple payback: 4.0-5.5 years. After-tax: 3.0-4.2 years. 2 MW system: £1.4m-£1.5m capex, 1.85 GWh/yr generation, 72% self-consumption. Annual saving: £270k-£320k. Simple payback: 4.0-5.0 years. After-tax: 3.0-3.8 years (or 2.4-3.2 years with Freeport ECA). 3 MW+ ground-mount: £1.95m-£2.15m capex, 2.7 GWh/yr generation, 65% self-consumption. Annual saving: £370k-£440k. Simple payback: 4.5-5.0 years.
IRR, NPV, and 25-year cumulative return
Beyond simple payback, finance directors typically want IRR (Internal Rate of Return) and NPV (Net Present Value) at a discount rate matched to corporate cost of capital. Typical UK warehouse solar metrics. After-tax IRR (25-year, 6% discount rate): 18-25% for AIA-only projects; 22-29% for Freeport/EZ ECA-eligible projects; 28-38% for IETF-grant-eligible projects. 25-year NPV (6% discount rate): £1.5m-£2.5m for 1 MW system; £3m-£5m for 2 MW system; £5m-£8m for 3 MW system. Cumulative undiscounted return over 25 years: typically £3m-£5m on a 1 MW system, £6m-£10m on a 2 MW system. These returns assume 0.5%/yr panel degradation (standard for Tier 1 panels), 1.5% real annual increase in grid tariff (consistent with 2010-2025 trend), and 25-year operational life.
Sensitivity analysis — what shifts the numbers most
Five sensitivity drivers in order of typical impact on NPV. (1) Grid tariff inflation: 1% per year above CPI vs at CPI vs 1% below CPI varies NPV by ±25-35%. The single biggest swing factor in long-term value. (2) Self-consumption ratio: ±5 percentage points varies payback by 0.4-0.8 years and NPV by ±10-15%. (3) Capex per kW: ±10% (from competitive procurement vs single-source) varies payback by 0.4-0.6 years and NPV by ±8-12%. (4) Capital allowance treatment: AIA vs WDA vs ECA varies after-tax payback by 0.5-1.2 years and NPV by ±5-10%. (5) Discount rate (cost of capital): 4% vs 6% vs 8% varies NPV by ±20-30%. We provide all five sensitivity analyses as standard in our DCF output — your finance director can stress-test before approval.
Our free DCF model — what we deliver and when
We deliver a full DCF model for warehouse solar at no cost as part of our standard feasibility service. Week 1: you send 12 months of half-hourly meter data and roof drawing. Week 2: we deliver a comprehensive DCF Excel model containing — site-specific generation forecast (PVSyst-calibrated for your roof orientation, tilt, shading); self-consumption profile derived from your actual half-hourly demand; 25-year cashflow model with monthly granularity; capital allowance schedule (AIA + ECA where applicable); grant funding scenario (where eligible); SEG export tariff and REGO sales income; O&M cost schedule; sensitivity analysis on the 5 key drivers above; summary metrics: simple payback, after-tax payback, IRR, NPV (at 4%, 6%, 8% discount rates), 25-year cumulative return. No charge, no obligation. We will tell you if the numbers do not work for your specific site.
Common questions about solar roi calculator
What is the typical ROI for warehouse solar in the UK?
Typical UK warehouse solar achieves 4-6 year simple payback (3-4 year after-tax), 18-25% post-tax IRR over 25 years, and £1.5-£5m positive NPV at 6% discount rate. Projects with IETF grants achieve 2.5-3.5 year payback and 28-38% IRR. The single biggest driver of ROI is self-consumption ratio (the share of generation used on site), which is determined by your operational pattern.
How do I calculate warehouse solar payback?
Simple payback = capital cost / annual saving. Annual saving = self-consumed kWh × grid tariff + exported kWh × SEG rate. After-tax payback accounts for AIA tax shield (typically 25% of capex returned in year 1 via corporation tax saving). We model your specific site from half-hourly meter data — generic calculators miss the self-consumption variation that drives 30-40% of total ROI difference.
What is a good IRR for warehouse solar?
A post-tax IRR of 18-25% over 25 years is typical for UK warehouse solar without grant funding. With IETF grant (manufacturing-eligible sites) IRR rises to 28-38%. Compare to your corporate cost of capital — most UK warehouse operators have hurdle rates of 8-12%, meaning solar IRR provides 2-3x the required return. The 25-year operational life provides longer cash generation than most other capital projects in commercial property.
Does warehouse solar still pay back with falling SEG rates?
Yes — because UK warehouse solar economics are driven primarily by self-consumption savings, not export income. For a typical 1 MW warehouse with 75% self-consumption: self-consumption saving ~£155k/yr at 22p/kWh grid rate; export income only £8-£12k/yr at 5-8p SEG. Even if SEG rates fall to zero, payback extends by only 6-12 months. Battery storage can further reduce dependence on export by shifting generation to high-demand periods.
How do I model self-consumption properly?
Proper self-consumption modelling requires hour-by-hour matching of solar PV generation profile (from PVSyst or equivalent) with the warehouse demand profile (from half-hourly meter data). Generic calculators using simple percentages miss seasonal variation, weekend reductions, and shift-pattern changes. Our model matches generation and demand at 15-minute resolution across a full annual cycle from your actual data.
How long does the ROI model take?
We deliver a full DCF model in 7 working days from receipt of half-hourly meter data and roof drawing. Week 1: you send the data. Week 2: we deliver the Excel model with all sensitivities. No charge, no obligation. If you do not have half-hourly data we can extract it directly from your DCC smart meter or your energy supplier — we coordinate this on your behalf.