Guide · Funding

How can a UK business pay for commercial solar panels?

The short answer: UK businesses fund solar in four ways - cash, a loan, asset finance or a lease, or a Power Purchase Agreement (PPA) with £0 upfront. The best route depends on your cash, tax position and how long you will stay in the building.

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The four ways to fund commercial solar

1. Buy outright (cash)

You pay for the system from cash reserves and keep every unit of electricity it generates.

Upfront cost: Full cost
Do you own it?: Yes, from day one
Tax treatment: Usually eligible for capital allowances, including Full Expensing for qualifying companies.
Best for: Profitable businesses with spare cash and a long-term hold on the building.

2. Business or green loan

A bank or specialist lender funds the system and you repay over an agreed term. Monthly bill savings can offset repayments.

Upfront cost: Low or none (deposit may apply)
Do you own it?: Yes
Tax treatment: As the owner you can usually claim capital allowances; interest is generally a deductible expense.
Best for: Businesses that want ownership and tax relief without spending cash reserves.

3. Asset finance or lease

A finance house funds the equipment. Hire purchase ends in ownership; an operating lease usually does not.

Upfront cost: Low or none
Do you own it?: Hire purchase: at the end. Lease: usually no
Tax treatment: Depends on the agreement. Hire purchase can qualify for capital allowances; lease rentals are usually treated as an expense.
Best for: Businesses that want fixed monthly costs matched to savings.

4. Power Purchase Agreement (PPA)

A funder installs, owns and maintains the system. You buy the electricity it generates at an agreed rate, typically below your grid tariff.

Upfront cost: £0
Do you own it?: No, the funder owns it during the contract
Tax treatment: No capital allowances for you; you simply pay for the electricity used.
Best for: Businesses with large roofs, steady daytime use and a long lease or freehold, who want savings without capital.

Tax treatment is a general summary, not tax advice. Confirm with your accountant. For more detail see our capital allowances guide and PPA guide.

What about grants?

There is no single national grant for business solar in the UK. Local and sector schemes open and close, so most businesses combine tax relief with one of the routes above. Check our grants and funding page, and if you run a school, our school solar funding guide.

How to choose the right route

Before comparing quotes, answer these five questions:

How long you expect to stay in the building, and whether you own or lease it.
Whether your accountant confirms you can use capital allowances.
Your daytime electricity use, since solar saves most when you use the power on site.
Roof condition and remaining life, so the roof will outlast the finance term.
What happens if you move, sell the building or want to buy the system early.

Then compare the saving against the cost of each route. Our commercial solar calculator gives an indicative saving and payback, and the ROI and payback guide explains how to read the numbers. Typical system prices are in our cost guide.

Not sure which funding route fits your business?

A free feasibility review looks at your roof, electricity use and occupancy, then shows which of the four routes are realistic for your site. No obligation.

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Frequently asked questions

Can I get commercial solar panels with no upfront cost?

Yes. A Power Purchase Agreement (PPA) needs no upfront payment: a funder pays for and owns the system and you buy the electricity it produces. Some loans and asset finance agreements also need little or no deposit.

Is it better to buy solar panels or use a PPA?

Buying usually gives the biggest lifetime saving and may unlock capital allowances, but needs cash or borrowing. A PPA gives a smaller saving with no capital and no maintenance responsibility. The right choice depends on your cash position, tax position and how long you will stay on site.

Are there government grants for commercial solar panels in the UK?

There is no single national grant for business solar. Some local authorities, devolved governments and sector schemes offer grants or low-cost loans from time to time, and schools have specific routes. Most businesses rely on tax relief and finance instead. See our grants and funding page for current options.

Can I claim tax relief on financed solar panels?

Often, yes, if you own the system or will own it under hire purchase. Capital allowances such as Full Expensing may apply to qualifying companies. Rules depend on your business and the agreement, so confirm with your accountant before committing.

What if I rent my building?

You will usually need your landlord's consent. A loan or lease should match the time left on your lease, and a PPA usually needs a long occupancy or landlord involvement. Tell us your lease length and we can suggest which routes are realistic.

Will monthly finance repayments be lower than my savings?

Sometimes, but not always. It depends on system cost, the interest rate, the term and how much power you use on site. Our calculator gives an indicative saving, and a feasibility review compares it against real finance options for your site.

Related guides & sector pages

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Business rates & solar panels

The 2023 exemption and what it means for you.

Read Guide

Capital allowances for solar

Full Expensing, FYA and AIA explained.

Read Guide

School solar grants and funding

CIF, SCA, capital and PPA routes explained.

Read Sector

Warehouses & logistics

Large-roof solar for 3PLs and distribution hubs.

Read

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