With rising electricity prices and growing pressure on UK companies to reduce their carbon emissions, switching to renewable energy is no longer a niche consideration but a strategic business decision.
We’ve developed this guide in response. It’s a comprehensive resource, updated for 2025, for business owners and decision-makers looking to transition to renewables and in the process of evaluating their options.
In this 10-minute read, we explore the different types of renewable energy for businesses, financial advantages, government incentives, and how you can make the switch as seamlessly and cost-effectively as possible. You’ll find up-to-date advice on:
What is renewable energy, and what are the benefits for businesses?
You’ve probably come across different terms such as “green”, “clean”, “sustainable” or “alternative” energy – all of which are pretty broad, and may include nuclear, low-carbon or carbon-offset sources.
When we discuss renewable energy, we’re referring specifically to energy generated from natural sources that replenish themselves, primarily sunlight, wind, and water – so, solar power, wind power and hydroelectric power.
The most obvious driver for adopting these commercial renewable energy sources is environmental responsibility, but there are also compelling commercial reasons to make the switch.
- Cost savings: Generating your own electricity reduces the impact of ever-increasing energy bills, a particular issue in the UK. Long-term, this can mean thousands of pounds in savings that can be reinvested in core business activities.
- Additional revenue: Depending on the system you choose, you may be able to earn additional revenue by selling excess energy generated back to the grid, taking advantage of variable pricing to maximise your profits.
- Brand positioning: Making a commitment to renewable and sustainable energy generation strengthens your company’s reputation in an increasingly eco-conscious marketplace, from customers to investors, partners and other stakeholders.
- ESG: Investing in renewables is a direct and measurable way to meet Environmental, Social, and Governance (ESG) targets, demonstrating your business’s proactive approach to environmental stewardship.
- Compliance: UK legislation is constantly evolving in the context of the country’s ambitious net-zero targets. Adopting renewable generation to meet all or part of your business’s energy needs can help ensure regulatory compliance, now and in the future.
Types of renewable energy available to UK businesses
Depending on your location, sector, and energy needs, a wide range of renewable energy sources is available to you, each with its own unique requirements and advantages.
Solar energy
Solar photovoltaic (solar PV) systems capture sunlight and convert it directly into electricity. Modern panels are highly efficient, compact, and can be installed on rooftops, unused land, or even carports. They can generate significant power even on cloudy days, making them a reliable option for the UK climate. For a detailed breakdown, learn how solar PV can power your business.
Wind energy
Wind turbines work by converting kinetic energy (from the wind turning the blades) into electricity. Wind power is an ideal option for businesses that have access to open land in regions with strong, consistent winds. Initial setup costs are generally higher than for a solar PV system, but properly sited wind turbines can generate a substantial amount of power, especially where there is sufficient space for large-scale installations.
Biomass and biogas
Biomass involves generating energy by burning organic materials, such as wood, crop residues, or specific energy crops. Biogas is produced from the breakdown of organic waste (agricultural waste or food scraps) in an anaerobic digester. The resulting methane is captured and used to generate electricity and heat. This is a particularly relevant option for businesses in the agricultural and food production sectors.
Hydropower
Hydropower harnesses the energy of flowing water to generate electricity; therefore, it is typically limited to businesses located near a suitable river or water source. It can often involve significant infrastructure and regulatory hurdles, but for businesses in a suitable location, it offers the potential for a consistent, long-term energy supply.
Renewable energy types at a glance
| Energy type | Average cost | Availability & space | Ideal for… |
| Solar PV | Solar PV Moderate initial cost with multiple financing options to remove the upfront expense. | Suitable for most rooftops, carports, and unused land. | Offices, warehouses, manufacturing sites,farms, retail, and schools. |
| Wind | High initial investment. | Requires significant open space and consistent high winds. | Large industrial sites, farms, and businesses in remote, windy locations. |
| Biomass/Biogas | Variable, dependent on fuel source and technology. | Requires space for plant,fuel storage and processing. | Agricultural sector, food processing plants, and large industrial facilities. |
| Hydropower | Very high initial investment. | Limited to specific geographic locations with strong water flow. | Industrial operations located next to fast-flowing rivers. |
Considering switching to solar power?
We’ve prepared a guide for businesses covering everything you need to know about solar panels:Commercial Solar Panels – Everything Businesses Need to Know.
Financial considerations and ROI
The initial investment required to switch to a commercial renewable energy source can present a barrier. However, there is now a range of financing models that make renewable energy for businesses accessible without requiring significant upfront capital expenditure.
CapEx
Best for: Highest lifetime returns
For businesses with available capital, a direct purchase (CapEx) delivers the highest long-term returns. A typical 150kW solar system can have a payback period of just 4-5 years, after which the electricity generated is virtually free, leading to savings of over £400,000 in 20 years.
Power Purchase Agreements
Best for: Highest lifetime returns
PPAs are a popular zero-upfront-cost solution. A provider like JLM Energy installs and maintains the renewable energy system on your property. Your business then agrees to purchase the electricity generated at a fixed rate that is significantly lower than grid prices, often up to 50% cheaper. PPAs can even include essential upgrades, such as new roofing or air source heat pumps, at no additional cost.
Asset Finance/Leasing
Best for: Spreading the cost over time
For businesses that want ownership but need to manage cash flow, asset financing or leasing is an ideal middle ground. This model allows you to spread the cost of the system over a fixed term with predictable monthly payments. The newly installed system serves as collateral, making it easier to secure funding. Once the term is complete, you own the asset and benefit from 100% of the energy savings.
Want to learn more?
Explore our webpage onflexible financing for renewable energy solutions to determine which option best suits your business needs.
Government incentives and support (updated for 2025)
As of June 2025, the UK government is incentivising the adoption of renewable energy for businesses through several schemes. Please note that this list is based on the most recent guidance available through GOV.UK and other official sources, and may change over time. If you have questions about which specific schemes are available and their eligibility criteria, please don’t hesitate to contact one of our team.
- Smart Export Guarantee (SEG): A scheme requiring licensed electricity suppliers to pay businesses for any surplus low-carbon energy they export back to the National Grid, including energy generated using renewable technologies.
- Climate change agreements (CCAs): Voluntary agreements between businesses and the Environment Agency under which businesses receive a substantial discount on the Climate Change Levy as long as they meet energy efficiency targets.
- VAT reductions and business rates relief: Some energy-saving materials and infrastructure qualify for a reduced rate of VAT. On-site renewable generation may also be exempt from business rates in some circumstances.
- Local and sector-specific grants: In the absence of any national grants (at the time of writing), some local authorities and regional bodies offer funding and support for businesses in specific areas or sectors, usually detailed on local authority or council websites.
How to switch to renewable energy for your business (in 5 steps)
Making the transition to commercial renewable energy is a significant undertaking, but with a structured process in place, it should be a straightforward one. Here are the key steps to follow to ensure you select the right technology, partner, and finance model for your needs.
| Conduct an energy audit to know where you stand. | A professional energy audit will analyse your usage patterns, identify inefficiencies, and determine the correct size and type of renewable system for your business. JLM offers a free remote energy audit, which includes a detailed PDF report with personalised recommendations. |
| Select the most suitable renewable energy source for your specific needs. | Based on your audit, location, and operational needs, select the most suitable technology. For most UK businesses, solar PV offers the best balance between cost, flexibility, and return on investment. |
| Choose a certified provider to work with. | Partner with an experienced, certified installer – ideally a turnkey provider like JLM. We can handle the entire process, from consultation and design to installation, commissioning, and maintenance, for a seamless process and ongoing support. |
| Evaluate the different financing options available. | A reputable provider will help you navigate options such as direct purchase, PPA, or asset finance models to find the most profitable terms, the shortest payback time, or the lowest total cost of ownership (TCO), depending on your financial priorities as a business. |
| Monitor and optimise your system over time. | Once your system is up and running, it should be monitored – either in-house or by your provider – to ensure optimal performance. To further enhance efficiency, you can add energy storage to maximise efficiency and reduce reliance on the grid. |
Challenges to consider (and how to overcome them)
For most businesses, transitioning to renewable energy is surprisingly straightforward, but it’s normal for business owners to have some initial reservations about making the move. Having said that, the most common concerns we encounter are often based on misunderstandings around costs or capabilities, which don’t necessarily apply to today’s renewable solutions. Here are the top three:
The upfront costs are too high
The initial outlay required to set up solar or wind generation can be substantial, especially for larger commercial systems. However, several options are available to businesses that prefer to avoid capital outlay, including asset financing, leasing options, or Power Purchase Agreements. Refer to the Financial Considerations and ROI section above for details.
We don’t have room on-site for the infrastructure
Today’s high-efficiency solar panels generate more power from a smaller footprint. If roof space is limited, ground-mounted systems or innovative solutions, such as solar carports, can be installed to meet energy needs without disrupting operations.
We can’t rely on solar or wind power 24/7
A common worry about renewable energy sources is what happens when the sun doesn’t shine or the wind doesn’t blow. However, there is a solution – combining your generation system with a Battery Energy Storage System (BESS). A BESS allows you to store any excess energy generated when conditions are right, and use it at a later time, when your solar panels or wind turbines aren’t generating. Combining renewable generation with a BESS gives you a resilient, reliable and always available energy source.
Is renewable energy right for your business?
For UK businesses not already using renewable energy, the question is no longer whether they should make the switch, but when. The advantages are too compelling to ignore: lower operational costs, true energy independence, and a more sustainable business model – plus the ability to unlock additional revenue streams, depending on the technologies used. And with today’s advanced infrastructure, flexible financing, and clear returns on investment, the decision has never been easier.
If you answered yes to one or more of these, it’s time to take the first step. Encouraging a move towards a greener future starts with a conversation with a trusted provider who can guide you through the process.
That’s what you’ll find at JLM. We offer a no-cost, no-commitment, comprehensive remote energy audit where we’ll review your current energy use and advise on the most suitable renewable options for your business. This can include zero-upfront-cost options, allowing you to transition to renewable energy without capital expenditure.
Each audit includes a personalised PDF report with full details of the available options, costs, ROI/payback periods, and more. Contact one of our expert consultants to book your free remote energy audit today.
