Independent hotel: 60 kWp on asset finance secured against the equipment

An independent hotel with restaurant, spa and a steady all-day load from kitchens, laundry, hot water and guest rooms wanted to hedge against volatile energy prices without pledging its property or tying up the overdraft it relies on through the seasonal swings of hospitality. It funded a 60 kWp rooftop system on asset finance, written as hire purchase and secured against the solar equipment itself.

The funding structure

Asset finance is the umbrella term for borrowing secured against the plant it pays for, delivered here as a hire-purchase agreement from a specialist renewable-energy lender. Because the solar system is the collateral, the hotel preserved its cash, its overdraft and its other credit facilities for the rest of the business. Written as HP rather than a lease, the deal means the hotel is treated as the owner for tax from day one, claims the capital allowance on the full cost in year one, and owns the array outright at the end of the term. The structure, HP versus lease, matters far more than the label, so the hotel confirmed in writing that it was HP before signing.

At an indicative 2026 cost of around £850 per kWp, the 60 kWp system came to roughly £51,000 before VAT, which the VAT-registered business reclaimed. Spread over a seven-year term at an indicative rate of base plus margin, the agreement costs about £8,600 a year, or roughly £720 a month.

The numbers

The system generates around 57,000 kWh a year. Hospitality carries a strong all-day load, so self-consumption sits at about 76%, meaning roughly 43,300 kWh is used on site displacing grid power at 28p a unit, worth about £12,120. The remaining 13,700 kWh is exported under the Smart Export Guarantee at an indicative 15p, adding about £2,055. Together that is a gross annual benefit near £13,200 hedged against every future grid price rise.

Set the roughly £720 monthly payment, about £8,600 a year, against the £13,200 annual benefit and the project runs around £4,600 a year cash-positive across the term, before tax relief. The full cost fell under the £1m Annual Investment Allowance, so the hotel claimed 100% first-year relief and, at 25% corporation tax, recovered roughly £12,750 against its year-one tax bill. Counting that relief, the effective payback is about four years.

At the end of the seven-year term the finance cost stops, the hotel owns the system, and the full saving flows through for the rest of its working life.

Why this route suited them

Hospitality lives and dies on cashflow, and a hotel’s most valuable security, its property, is not something an owner wants to encumber for a rooftop system. Asset finance solves exactly that: the equipment is the security, so the hotel kept its building unpledged and its banking facilities free for refurbishments and the lean months between seasons. Choosing an HP structure rather than a lease meant the hotel still captured the full first-year allowance and ends up owning the asset, rather than handing the relief and the kit to a lessor. With the monthly payment comfortably under the monthly saving and a strong daytime load to soak up the generation, the finance pays for itself while the hotel locks in a slice of its energy cost against future price shocks.

Model this against your own electricity spend in the finance calculator, then get costed quotes when you are ready.