Commercial SolarFinance Options
No upfront cost? Full ownership? Flexible payments? Compare every way to fund your commercial solar installation and find the right option for your business.
Four Ways to Fund Your Solar Installation
Every business is different. Compare the options to find what works for your budget, cash flow, and long-term goals.
Cash Purchase
Upfront Cost
Full system cost
Monthly Cost
None
You Own It
Immediate
Contract
N/A
Advantages
- Highest overall returns - you keep 100% of savings
- Full ownership from day one
- Eligible for 100% capital allowance (AIA)
- 0% VAT on installation (until 2027)
- No ongoing finance payments
- Full Smart Export Guarantee income
Considerations
- Requires upfront capital investment
- Business carries maintenance responsibility
- Ties up working capital
Best For
Businesses with available capital seeking maximum long-term returns and full tax benefits.
Power Purchase Agreement (PPA)
Upfront Cost
None
Monthly Cost
Per-kWh rate (typically 10-18p)
You Own It
After 15-25 years (or purchase option)
Contract
15-25 years
Advantages
- Zero upfront cost - start saving immediately
- Guaranteed lower rate than grid electricity
- Provider handles maintenance and monitoring
- No technology risk - provider ensures performance
- Predictable energy costs for contract duration
- Option to purchase system at reduced price
Considerations
- Lower overall savings than cash purchase
- Long contract commitment (15-25 years)
- Provider retains ownership during contract
- May complicate property sale or lease changes
- No capital allowance tax benefits for you
Best For
Businesses wanting solar benefits without capital investment, especially tenants or those preferring to preserve working capital.
Solar Lease
Upfront Cost
None or small deposit
Monthly Cost
Fixed monthly lease payment
You Own It
Purchase option at end of lease
Contract
10-20 years
Advantages
- No or minimal upfront cost
- Fixed monthly payments for budgeting certainty
- You keep all electricity generated
- Lease payments often less than energy savings
- Option to purchase at lease end
- Maintenance often included in lease
Considerations
- Total cost exceeds cash purchase price
- Fixed payments regardless of generation
- Lease obligations affect balance sheet
- May require credit approval
- Early termination penalties apply
Best For
Businesses wanting predictable costs and the benefit of all generated electricity without full upfront investment.
Hire Purchase
Upfront Cost
10-20% deposit
Monthly Cost
Fixed monthly repayments
You Own It
After final payment (typically 3-7 years)
Contract
3-7 years
Advantages
- Full ownership after repayment period
- Capital allowances may apply from day one
- Shorter commitment than PPA or lease
- You keep all energy savings and export income
- Monthly payments often covered by energy savings
- Good balance of cost and ownership benefits
Considerations
- Requires deposit (10-20%)
- Interest charges increase total cost
- Monthly payments during repayment period
- Credit approval required
- Business responsible for maintenance
Best For
Businesses wanting ownership benefits with manageable payments, especially those seeking tax advantages through capital allowances.
Side-by-Side Finance Comparison
How each option compares across the key metrics that matter
| Metric | Cash Purchase | PPA | Lease | Hire Purchase |
|---|---|---|---|---|
| Upfront Cost | Full | None | None/Low | 10-20% deposit |
| Monthly Payments | None | Per kWh used | Fixed | Fixed (3-7 years) |
| Who Owns the System | You | Provider | Lessor | You (after final payment) |
| Total 25-Year Cost | Lowest | Highest | Medium-High | Medium |
| Total 25-Year Savings | Highest | Lowest | Medium | High |
| Capital Allowance (AIA) | Yes - 100% | No | Varies | Yes - 100% |
| 0% VAT Benefit | Yes | Via provider | Via lessor | Yes |
| Maintenance Included | Your responsibility | Yes | Usually | Your responsibility |
| Contract Flexibility | Full - no contract | Low - 15-25 years | Low - 10-20 years | Medium - 3-7 years |
| Ideal Business Size | Any with capital | Any size | Medium-Large | Any size |
Understanding the Numbers
Cash Purchase Example: 50kW System
PPA Example: Same 50kW System
Which Option Saves Most?
Based on a 50kW system, 34p/kWh grid rate, 85% self-consumption. All options deliver significant savings vs doing nothing.
Government Incentives
0% VAT on Solar (until 2027)
All commercial solar installations under 1MW qualify for zero VAT, saving up to 20% on installation costs.
Annual Investment Allowance (AIA)
Deduct 100% of solar installation costs against corporation tax in the first year. On a £50,000 system at 25% CT, that is a £12,500 tax saving.
Smart Export Guarantee (SEG)
Get paid for surplus electricity you export to the grid. Rates vary by supplier but typically 4-12p/kWh.
Enhanced Capital Allowance
Solar equipment qualifies for enhanced capital allowances, providing additional tax relief for energy-saving investments.
Find the Right Finance Option for Your Business
Our team will model every finance option against your specific energy usage, roof space, and financial goals. Get a personalised comparison with your free quote.