Business solar finance options compared

Q: Can my business get solar with no upfront cost?

Yes. Either a PPA, where a funder owns the system and you buy the cheaper power, or 100% finance, a green loan, hire purchase or lease repaid from the energy saving. Both aim to be cash-flow positive from day one. The trade-off is that zero upfront usually means giving up some ownership, tax relief or lifetime return, so it is worth modelling the true cost of each rather than just chasing the £0 headline.

Q: With hire purchase, do I still get the tax relief even though I pay monthly?

Yes. Under hire purchase you are normally treated as the owner and claim the AIA or 50% first-year allowance, but roof-mounted panels are usually fixtures and the hire-purchase rules do not apply to fixtures, so agree with your accountant when the allowance falls due. The interest element is separately deductible. It is one of the main reasons owners choose HP over a lease or PPA when they want both the relief and a spread cost.

The seven ways a business can fund solar, lined up on the measures that actually decide it: what it costs up front, who owns the asset, who claims the tax relief, how it hits your balance sheet, and what it returns over its life.

Comparing business solar finance options

Quick answer

Buying outright keeps every pound of saving and the full first-year tax relief but ties up working capital. For the lease case in detail, see our lease vs buy solar panels comparison. A green loan or hire purchase lets you own the system and still claim the relief while paying from the energy it saves. Asset finance is the umbrella term for HP and finance leases, so the exact structure decides your tax and ownership position. An operating lease is a rental, once reliably off balance sheet but no longer, and you never own the kit. A PPA needs no capital at all but gives the lowest lifetime return, because the funder owns the system and keeps the allowances while you just buy the power. There is no universal best route, only the one that suits your cash position, your tax profile and how long you will hold the building.

Compare the routes here, the companies and the figures elsewhere. This page weighs the funding routes against each other (PPA, hire purchase, asset finance, lease, loan or outright) so you can settle on the right structure for your business. Once you know the route, two sibling sites take you further: see which lenders and finance companies fund business solar, or move straight to numbers and request costed quotes for your building.

All seven funding routes, side by side

Funding route	Upfront	Who owns it	Term	Balance sheet	You get tax relief	Best for
Buy Outright (Capital Purchase)	Full installed cost	Your business, from commissioning	No finance term	On balance sheet as an owned asset	Claim the Annual Investment Allowance (100% up to £1m) or the 50% special-rate first-year allowance on the whole cost, and reclaim the VAT if you are VAT-registered	Cash-comfortable businesses that want the maximum lifetime return and the full tax relief
Power Purchase Agreement (PPA)	£0	The PPA funder, for the life of the contract	Long-term, set in the contract	Intended to be off balance sheet, confirm under your framework	The funder owns the asset, so the funder, not you, keeps the capital allowances and the export income	Businesses that want cheaper power immediately with no capital, no maintenance and a long stay in the building
Hire Purchase	A deposit set by the lender	The lender during the term, your business at the end	Fixed, set by the lender	On balance sheet from the start	You are treated as the owner for tax, so you claim the year-one allowance on the full cost even though you pay over time	Businesses that want to own the asset and capture the tax relief without paying all the cash up front
Asset Finance	Low or none, deposit varies	Depends on the structure: you at the end under HP, the lessor under a lease	Fixed, set by the funder	On balance sheet under hire purchase or a finance lease	Under an HP or finance-lease structure you typically claim the capital allowances, and the finance charge is separately deductible	Businesses that want the equipment to be the security rather than pledging other assets or facilities
Operating Lease	£0 to low	The lessor, throughout the term	Fixed, set by the lessor	On the balance sheet for most FRS 102 lessees from 2026 (short-term and low-value leases excepted)	The lessor keeps the capital allowances; your rental payments are deductible as a normal business expense	Businesses that value off-balance-sheet treatment and smooth P&L costs over owning the asset
Business or Green Loan	£0, the loan funds the purchase	Your business, from day one	Set by the lender	The asset is on the balance sheet, the loan shows as debt	As the owner you claim the year-one allowance on the full cost, and the loan interest is deductible	Businesses that want full ownership and tax relief without draining cash, and prefer a clean, separate debt
No Upfront Cost	£0	Depends on the structure underneath	Varies by structure	Depends on the structure underneath	Depends on the structure, so always check who ends up with the allowances and export income	Businesses that will not commit capital but still want solar cutting their bills now

Balance-sheet treatment depends on your accounting framework (IFRS 16 or FRS 102) and the exact structure; confirm with your accountant. Last updated July 2026.

Which route fits your business

Cash-comfortable and after the strongest return?Buy outright, from reserves or a green loan. You keep every pound of saving, all export income and the full first-year allowance, and a well-matched system typically pays back in around four to six years.

Want to own it without draining working capital?Hire purchase or asset finance. You are normally treated as the owner for tax, spread the cash over two to seven years and own the system outright at the end; roof-mounted panels are usually fixtures, so agree the timing of the relief with your accountant.

Cannot commit capital, and want no maintenance?A PPA. A funder owns and maintains the system, you just buy the power below your grid rate. Cheaper energy from day one with nothing spent up front, in exchange for the lowest lifetime return.

Value a clean, fixed monthly cost through the P&L?An operating lease expenses the rentals against profit, but off-balance-sheet treatment is no longer guaranteed under IFRS 16 or FRS 102, so confirm it with your accountant before you rely on it. If the project also covers batteries, chargepoints or heat pumps, renewable energy finance sets out how each route and relief applies by technology.

Sources and official guidance

Figures on this page are based on the following primary sources. This is general information, not tax advice.

Comparing the routes: common questions

How can a business finance solar panels?

There are six main routes: buy outright from cash, a business or green loan, hire purchase, asset finance, an operating lease, or a Power Purchase Agreement. Owning the system, through cash, a loan or hire purchase, keeps all the savings, export income and tax relief. A PPA or lease needs little or no capital but the funder keeps the asset and the relief. The right one depends on your cash position, tax profile and how long you will hold the building, which is what the comparison and calculators here are for.

Can my business get solar with no upfront cost?

Yes. Either a PPA, where a funder owns the system and you buy the cheaper power, or 100% finance, a green loan, hire purchase or lease repaid from the energy saving. Both aim to be cash-flow positive from day one. The trade-off is that zero upfront usually means giving up some ownership, tax relief or lifetime return, so it is worth modelling the true cost of each rather than just chasing the £0 headline.

Will the monthly finance payment be less than my energy saving?

Often yes, if the annual saving plus any export income beats the annual finance or PPA cost, which is the whole self-funding case. Whether it works for you depends on system size versus your consumption, your unit price, how much power you use on site and the finance rate, so it has to be modelled for your building. The finance calculator here shows the monthly payment next to the monthly saving so you can see the net position before you commit.

Should my business own the solar or use a PPA?

Own it if you have or can borrow the capital and want the maximum return, because ownership keeps every pound of saving, the export income and the tax relief. Use a PPA if you cannot commit capital, want no maintenance risk and will hold the building long enough to benefit, accepting a lower lifetime return in exchange. A middle path, hire purchase or a green loan, lets you own the asset and claim the relief while still paying monthly.

Does a lease keep solar off my balance sheet?

An operating lease traditionally did, but under current accounting rules most leases now sit on the balance sheet, and a finance lease and hire purchase are on it too. If off-balance-sheet treatment is the reason you are considering a lease, confirm the current position with your accountant first, because it can no longer be assumed.

With hire purchase, do I still get the tax relief even though I pay monthly?

Yes. Under hire purchase you are normally treated as the owner and claim the AIA or 50% first-year allowance, but roof-mounted panels are usually fixtures and the hire-purchase rules do not apply to fixtures, so agree with your accountant when the allowance falls due. The interest element is separately deductible. It is one of the main reasons owners choose HP over a lease or PPA when they want both the relief and a spread cost.