Commercial Solar vs Heat Pumps

“Solar or a heat pump?” is the wrong question. They do two different jobs — solar generates low-cost electricity, a heat pump turns electricity into heat efficiently — and on most commercial buildings the answer is “both, in the right order”. They are not competing products fighting for the same budget; they sit on opposite sides of the meter. This guide sets out what each one actually does, why they reinforce each other, how each moves a commercial EPC and your MEES position, and how to sequence the two when capital and roof space are finite.

If you are weighing decarbonisation capex on a commercial asset, the trap is treating solar and a heat pump as either/or. Do that and you either under-spend (solar only, with the gas boiler still running the heating) or sequence badly (a heat pump that triples your electricity import before you have built any generation to feed it). The two assets are most valuable together — but only if you understand what each one is for.

What each one actually does

The cleanest way to keep them straight is to remember that solar is a generator and a heat pump is a consumer.

Solar PV: it makes electricity

A rooftop or car-park solar array generates electricity on site. Its value comes overwhelmingly from self-consumption — every unit you use as you generate it displaces a unit you would otherwise import at ~24–28p, whereas exporting a surplus to the grid earns only the Smart Export Guarantee rate of ~12–16p. Solar does nothing to your heating directly; it lowers the cost and carbon of whatever electrical load the building already has — lighting, plant, refrigeration, IT, EV chargers and, if you have one, a heat pump.

Indicative numbers (ex-VAT; commercial solar installation has carried 0% VAT since April 2022): around £700–1,100/kWp falling with scale, a 250kWp system at roughly £150–240k, yields of about 950 kWh/kWp a year, and paybacks of four to eight years — faster on a high daytime-load building. The full cost picture is in our commercial solar cost guide, and the panel and installation detail in commercial solar panels.

Heat pumps: they make heat from electricity

A commercial heat pump (air-source or, less commonly, ground- or water-source) moves heat rather than burning fuel. For every unit of electricity it draws it delivers roughly three to four units of heat — a coefficient of performance of 3–4 — which is why it can decarbonise space heating and hot water that a gas boiler currently provides. The point of a heat pump is to electrify heat and take the gas boiler off the building, cutting the direct (Scope 1) emissions from combustion entirely.

The catch is the obvious one: a heat pump increases electricity demand. It shifts load from the gas meter to the electricity meter. That is good for carbon — grid electricity is far cleaner per unit than burning gas, and gets cleaner every year — but it raises your electrical import unless something offsets it. That “something” is very often solar. Heat-pump engineering, sizing and the wider commercial picture sit with our sibling resource on commercial heat pumps.

Why they are complementary, not alternatives

Put the two together and the relationship is plain: a heat pump is a new electrical load, and solar is a new source of cheap on-site electricity to feed it.

On its own, a heat pump raises your electricity bill (while cutting your gas bill and your carbon by more). On its own, solar reduces your existing electricity bill but leaves your gas-fired heating untouched. Run them together and the solar array offsets a share of the heat pump’s consumption — daytime heat, hot-water reheat and the building’s base electrical load all draw, in part, from power you generated rather than imported. The heat pump also helps the solar business case in reverse: it adds daytime electrical load, which raises your self-consumption ratio — the single biggest driver of solar return. A building that exports a lot of midday surplus at 12–16p is leaving money on the table; give that surplus a heat pump (or a battery, or both) to soak up and far more of each generated unit is worth 24–28p instead.

There are practical limits worth stating honestly. Solar generates most in summer; heat demand peaks in winter, when generation is lowest — so on space heating the seasonal profiles are mismatched, and solar will not “run the heat pump for free” through a cold January. Hot water and process heat, which are flatter year-round, line up better. A commercial battery helps by time-shifting daytime solar into evening and shoulder-hour heat demand, lifting self-consumption from the 30–50% typical of solar alone toward 60–80%. The realistic claim is “the array meaningfully reduces the heat pump’s grid import across the year”, not “the sun heats the building”.

EPC and MEES impact of each

Both assets improve a commercial Energy Performance Certificate, but through different mechanisms — and the MEES backdrop matters.

To be precise on the law as it stands in June 2026: the minimum standard to let commercial property in England and Wales is EPC E, and has been unlawful to breach since 1 April 2023. A move to EPC B by 2031 for properties over 1,000 m² was proposed on 18 June 2026 and is subject to legislation — it is not yet law, and the earlier “EPC C by 2027” trajectory was scrapped. The detail and the dates sit in our MEES and EPC guide for commercial property; treat the 2031 figure as a proposal to plan against, not a current obligation.

How each asset moves the rating:

• Solar PV improves the EPC by generating on-site renewable electricity, which the SBEM/SAP-style methodology credits against the building’s calculated energy use and CO₂. It is one of the more reliable ways to lift a borderline rating, especially on an electrically-heated or high-base-load building.
• A heat pump improves the EPC by replacing fossil-fuel heating with an efficient electric source. Swapping a gas boiler for a heat pump can shift the rating materially because the methodology rewards the low carbon intensity and high efficiency of the heat delivered — particularly where heating dominates the building’s energy demand.

Which one moves your EPC more depends on the building. On a heating-dominated property (an older office, say, with a gas boiler), the heat pump is often the bigger single lever. On a building with modest heating but heavy electrical load — a data-light warehouse with refrigeration, or any high daytime-load occupier — solar can do more. In most cases combining them is what reaches and holds a stronger band, which is exactly why the proposed EPC B threshold tends to require more than one measure.

Comparison at a glance

The two columns are not a shortlist to choose from — they are two halves of a decarbonisation plan that interlock.

Sequencing: which first, and when

With finite capital, order matters. There is no universal answer, but the building tells you what to do.

Solar first is the common default, and usually the right one, because:

• It cuts your existing electricity bill from day one with a four-to-eight-year payback, generating savings that can part-fund later works.
• It carries 0% VAT and a strong capital-allowances position — solar is a special-rate asset, and an owner using the array in its own trade can typically claim 100% relief via the Annual Investment Allowance (£1m, permanent); the funding mechanics are in our capital allowances and funding guide.
• It builds the on-site generation before you add the heat pump’s load, so the heat pump arrives into a building that already has cheap daytime power to draw on.

Heat pump first makes sense when the trigger is on the heat side: an end-of-life gas boiler that needs replacing anyway (replace it once, with a heat pump, rather than buying another boiler you will rip out), a heating-dominated EPC that will not reach the required band without electrifying heat, or a hard Scope 1 / net-zero commitment where eliminating combustion is the binding constraint. If you go heat-pump-first, plan the solar to follow so you are not locking in years of higher grid import.

Do them together where a roof or plant-room project is already open — a re-roof, a refurbishment, a fit-out between tenancies. Co-ordinating avoids paying twice for scaffolding, roof access and design, and lets you size the array against the heat pump’s expected load from the outset. This is also the moment to consider a battery to bridge the summer-generation / winter-heat mismatch, and to check the grid connection — a G99 application above ~50kW is the real bottleneck, and a heat pump plus solar can push you over that threshold sooner than solar alone.

A few building-specific pointers:

• Owner-occupier, gas-heated, decent roof: solar first for the quick electrical saving, heat pump at boiler end-of-life, sized with the array in mind. See owner-occupied commercial property.
• Let investment property under a full-repairing lease: the tenant pays the energy bills, so the value you capture differs — heat-pump and solar capex interact with the split incentive. Sequence around lease events and EPC obligations.
• High daytime electrical load, modest heating: solar is the bigger lever; a heat pump is a smaller add for the EPC and the carbon rather than the headline saving.

Whichever order you choose, model the two as one plan rather than two unrelated purchases. Sizing the solar to the building’s future electrical load — including the heat pump — is what turns two good assets into one coherent strategy. Start with a structured assessment of your building’s load profile, roof and EPC, and the order falls out of the numbers.

Frequently asked questions

Should I install solar or a heat pump first?

On most commercial buildings, solar first — unless your gas boiler is at end of life or your EPC is heating-dominated. Solar pays back in four to eight years, cuts your electricity bill immediately and, with 0% VAT and Annual Investment Allowance relief, often part-funds later works — and it builds on-site generation before you add the heat pump’s electrical load. Lead with the heat pump when the trigger is on the heat side: a boiler that needs replacing anyway, a Scope 1 / net-zero commitment that requires removing combustion, or an EPC that will not reach the band without electrifying heat. Where a roof or refurbishment project is already open, doing both together avoids paying twice for access and design.

Can solar panels run a commercial heat pump?

Partly, and that is the point — but solar will not run a heat pump “for free” all year. A heat pump is an electrical load and solar is a source of cheap on-site electricity, so the array offsets a meaningful share of the heat pump’s import across the year and the heat pump’s daytime demand lifts your solar self-consumption (the main driver of solar return). The honest limit is seasonal: solar generates most in summer, while space-heating demand peaks in winter when generation is lowest. Hot water and process heat line up better, and a commercial battery helps time-shift daytime generation into heat demand — but expect “substantially reduced grid import”, not a building heated by sunshine in January.

Do solar and heat pumps both improve a commercial EPC?

Yes — through different mechanisms, and which helps more depends on the building. Solar is credited as on-site renewable generation against the building’s calculated energy use and CO₂; a heat pump improves the rating by replacing fossil-fuel heating with efficient electric heat. On a heating-dominated property the heat pump is often the larger single lever, while on a high electrical-load building solar can do more — and reaching the proposed EPC B threshold for over-1,000 m² properties (suggested for 2031, not yet law as of June 2026) usually takes more than one measure. The current legal minimum to let commercial space in England and Wales remains EPC E; the dates and detail are in our MEES and EPC guide.