Solar panel finance for UK businesses, route by route

How solar panel finance works for a business

For a business, solar panel finance is a commercial agreement to spread the cost of an installation over time, or to let someone else pay for it. Whichever of the seven routes above you choose, three questions decide what you are signing: who lends, what the funder can fall back on if payments stop, and how the repayments are built. If you are funding batteries, EV chargers or heat pumps at the same time, the wider guide to renewable energy finance covers those too.

Who lends

The British Business Bank describes a mixed market: there are specialist asset finance funders in the UK, as well as funders, including high-street banks, that offer leasing and hire purchase. A business can take a lease or hire purchase agreement directly with a finance provider, from an equipment provider or manufacturer, or through a broker. In practice the finance attached to a solar quote may come from the bank you already use, from a funder the installer introduces, or from a broker you appoint. A power purchase agreement works differently: the PPA provider pays for and owns the system, and your business buys the electricity it produces.

There is government support on the lending side, although it is a guarantee rather than a grant. Under the Growth Guarantee Scheme, accredited lenders, which range from high-street and challenger banks to asset-based and specialist local lenders, lend to smaller businesses with a 70% government-backed guarantee. The guarantee protects the lender, not you: the British Business Bank states that your business remains 100% liable for repayment. The scheme supports term loans and asset finance, generally up to £2 million per business group, and lenders should use it only when they cannot offer equivalent or better terms without it. On 12 July 2026 the Chancellor announced that the scheme would support terms of up to ten years for term loans and asset finance; while lenders put that in place, the existing terms of up to six years apply.

What the funder holds as security

With asset finance, the British Business Bank notes, the asset being bought is the security for the finance provider, so there is no need to put up other assets, and falling behind on payments can lead to the provider repossessing it. Solar complicates that. HMRC lists solar panels among the items normally regarded as fixtures, and in law a fixture belongs to the freeholder of the land. Panels fixed to a roof are harder to recover than a van, so expect a funder to ask who owns the building, how long your lease runs and whether the landlord has consented. The guide on whether a tenant can install solar panels covers the consent question.

Unsecured lending works differently. A personal guarantee is usually required for an unsecured business loan, and unsecured loans tend to carry higher interest rates than secured ones because the lender takes more risk. Under a guarantee, personal assets such as your home, car and savings can be used to settle the business debt. On Growth Guarantee Scheme facilities lenders may take personal guarantees, but they cannot take your principal private residence as security.

How the repayments are built

Most agreements use the same building blocks: an upfront amount, a run of fixed or variable payments, and sometimes a larger final payment. Under hire purchase, in the British Business Bank's description, the business pays a deposit, hires the asset during the agreement and at the end either owns it or has the option to buy it with a final payment. Lease rentals may include an advance rental. A balloon structure lowers the monthly payment, but the total cost over the term tends to be higher. Terms vary by funder and product; the British Business Bank says it is common for an asset finance agreement to run for at least a year. Whatever you are offered, keep the term inside the working life of the equipment and the time you will occupy the building.

Business versus household solar finance: what a business cannot use

Search for solar panel finance, or for solar panels on finance, and most of what comes back is written for homeowners. Those products are built on personal borrowing for a home, and their rules shut out business premises. Each scheme below was checked against its own published terms on 6 October 2026.

The Warm Homes Loan Scheme

The Warm Homes Loan Scheme is the lending arm of the government's Warm Homes Plan. Its scheme rules let participating lenders lend only "on a personal lending basis" to two groups: owner-occupiers of existing domestic properties and private rented sector landlords. The same rules state that lending to business or SPV type structures will not be allowed. Loans are capped at £15,000 for solar PV and £15,000 for a battery, the products and the installer must be MCS certified, and the scheme operates within the Consumer Credit Act. Its initial consumer launch phase runs from September 2026.

One nuance matters for the self-employed. The scheme defines a domestic property as a building used, or suitable for use, as a dwelling. Where a property is both a home and a place of business, an installation is eligible if it is principally intended to meet the energy needs of the household, and incidental business use, such as running a business from home, does not by itself make the property ineligible. A sole trader who works from home may therefore be able to use it for the house. A workshop, shop or office that is not a dwelling falls outside the definition. The guide to solar finance for sole traders covers that overlap.

Warm Homes: Local Grant and Home Energy Scotland

Two other household schemes sit in the same search results. The Warm Homes: Local Grant is England-only and covers privately owned homes with an Energy Performance Certificate rated D to G, usually where household income is £36,000 a year or less; the local council organises and pays for the work it agrees. In Scotland, the Home Energy Scotland Grant and Loan is open where the property is an existing property in Scotland and you own the home you live in as your only or primary private residence, and for solar electricity its funding table lists only hybrid PV-T systems, not standard solar PV. Neither is a route for business premises.

Energy suppliers' 0% offers

Energy suppliers' payment plans are consumer credit for homes. E.ON Next advertises 0% APR finance for up to three years on a solar system for "your UK home", with its installation company acting as a credit broker for HomeServe Finance, the lender. So Energy offers 0% finance on selected products over three years and describes itself as a credit broker offering consumer finance from Tandem Bank and HTG Finance. Offers change often, so treat these as examples of the category rather than current prices: they are household products, and the seven routes on this page are the business equivalents.

VAT works differently too

Household quotes also carry a VAT position a business does not get. The installation of energy-saving materials, which include photovoltaic panels, is zero-rated until 31 March 2027 (from 1 April 2022 in Great Britain and 1 May 2023 in Northern Ireland) when it is in residential accommodation or a building used solely for a relevant charitable purpose. Business premises are outside that relief, and HMRC's notice gives hotels and inns as examples where the standard rate applies. A VAT-registered business can reclaim VAT on items it buys for business use, so compare business quotes net of VAT; see VAT reclaim on business solar.

What a business can use instead

The business equivalents are the seven routes above, plus a small number of public schemes. In Wales, the Development Bank of Wales Green Business Loan Scheme lists solar PV among its typical eligible projects and is open to limited companies, sole traders and partnerships based in Wales that have traded for at least two years with at least one set of filed accounts. In Scotland, Business Energy Scotland's SME Loan is not accepting new applications for solar PV projects, so it is not a solar route at present. Grants are scarce: a Find a Grant search for "solar" returned no grants on 6 October 2026, the government confirmed in July 2025 that the planned second competition window of the Industrial Energy Transformation Fund's Phase 3 will not take place, and the Public Sector Decarbonisation Scheme funds public-sector organisations. More on business support in Scotland, Wales and Northern Ireland.

When consumer-credit rules apply to business solar finance

Consumer-credit rules turn on who is borrowing. The consumer-credit regime in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 applies to credit agreements where the borrower is an individual or a "relevant recipient of credit". That term means a partnership of two or three persons not all of whom are bodies corporate, or an unincorporated body that does not consist entirely of bodies corporate and is not a partnership. A limited company is neither, and nor is a partnership of four or more partners, so their loans, hire purchase and leases sit outside these rules.

For sole traders and small partnerships, the amount and the purpose decide. Under article 60C of the Order, a credit agreement is exempt where the lender provides credit exceeding £25,000 and the borrower enters into it wholly or predominantly for the purposes of a business; the FCA's Perimeter Guidance sets out the same test. Credit of £25,000 or less taken for business purposes stays regulated unless one of the narrower exemptions applies. If the agreement contains a declaration by the borrower that it is for business purposes, the agreement is presumed to be for business, unless the lender knows or has reasonable cause to suspect otherwise.

Two details catch people out. Under hire purchase the credit is not the price of the system: the Order treats it as the total price less any deposit and the total charge for credit. Leases have a parallel test: a consumer hire agreement with an individual or relevant recipient that can last more than three months is exempt only if the hirer has to make payments exceeding £25,000 and enters into it wholly or predominantly for business purposes.

Regulation brings protections a company does not get. A borrower under a regulated consumer credit agreement can withdraw within 14 days without giving a reason, unless the agreement is excluded, for example because the credit exceeds £60,260 or it is secured on land. The borrower can also settle early: in full at any time, and in part unless the agreement is secured on land. A PPA is a contract to buy electricity rather than a loan, so judge it on its price, how that price rises, its term and its exit terms.

What drives the cost of solar panel finance

This guide does not publish lender rates, because they differ by lender, by borrower and over time. What can be set out is what moves the price.

• Bank Rate. The Bank of England held Bank Rate at 3.75% at its decision published on 17 September 2026, and its next decision is due on 5 November 2026. The Bank explains that when it raises Bank Rate, banks will usually increase how much they charge their customers on loans, and the reverse when it lowers it.
• Fixed or variable. A fixed rate does not change over the term. A variable rate may start lower, but if the Bank of England changes rates, your lender adjusts your rate to match, according to the British Business Bank.
• Your risk profile. Lenders weigh the type of business, the size of the loan and your creditworthiness, and the rate depends on the repayment period and any collateral offered.
• Security. Unsecured lending tends to cost more than secured lending and usually needs a personal guarantee.
• Fees and structure. Asset finance can carry fees as well as interest. Under the Growth Guarantee Scheme, lenders' upfront fees, including broker fees, are limited to 5%. A balloon payment lowers the monthly payment but tends to raise the total cost.
• Deposit and VAT timing. Hire purchase is treated like a sale for VAT: VAT is charged on the cash price of the goods and the full amount is normally payable with the first instalment, while a separately disclosed charge for credit is exempt. Under a lease, each rental is subject to VAT. If you are VAT-registered that is mainly a cash-flow difference; if you are not, the VAT is a cost under every route.

To see why the rate matters, take an illustrative balance of £50,000: each percentage point of interest costs about £500 a year on that balance (£50,000 × 1%), before fees. Put your own figures into the finance calculator and compare offers on the total amount payable, not just the monthly payment.

Tax relief by route: who claims what

HMRC designates all capital expenditure on solar panels as special-rate expenditure, from 1 April 2012 for corporation tax and 6 April 2012 for income tax. That fixes which allowances exist; the finance route decides who gets them. The full detail is in the guide to capital allowances on solar panels; the position by route is below.

Buying with cash or a loan

Your business owns the system, so it claims. The Annual Investment Allowance lets you deduct the full value of qualifying plant from profits before tax, up to £1 million a year, and sole traders, partnerships and companies can all use it, although it is only available to partnerships whose members are all individuals. Above the AIA, a company within corporation tax can claim the 50% first-year allowance on new and unused special-rate plant and add the balance to the special-rate pool, which attracts writing-down allowances of 6% a year. Solar does not qualify for full expensing, which is for main-rate plant, or for the 40% first-year allowance on expenditure from 1 January 2026, which excludes special-rate expenditure.

Illustrative only: a company paying the 25% main rate of corporation tax that buys a £60,000 system and claims the AIA on all of it cuts its taxable profits by £60,000, worth £15,000 of corporation tax (£60,000 × 25%). The main rate applies where profits exceed £250,000; at the 19% small profits rate, for profits of £50,000 or less, the same claim is worth £11,400 (£60,000 × 19%).

Hire purchase

GOV.UK's rule for hire purchase is that, once you start using the item, you can claim for all the payments you will make under the contract, though not for the interest. Roof-mounted panels add a complication. HMRC's manual states that the hire purchase legislation does not apply to an asset that is a fixture, and the fixtures rules decide instead; under those rules a business that incurs the expenditure and has an interest in the relevant land is treated as the owner of the fixture. Agree the claim and its timing with your accountant before relying on it. Hire purchase for solar covers the mechanics.

Finance and operating leases

If you lease, you normally cannot claim. GOV.UK says you cannot claim plant and machinery allowances on things you lease unless you have a hire purchase contract or a long funding lease, because you must own them. Where a finance lease is not a long funding lease, HMRC regards the lessor as the owner entitled to the allowances, and the rentals are deductible as revenue expenses for the lessee. For panels fixed to your building, an equipment lessor is treated as the owner of the fixture only where the statutory conditions are met and the lessor and lessee elect for it, so expect an election form in the paperwork for an operating lease or asset finance structured as a lease. HMRC's leasing manual notes that it is being updated for the 2024 amendments to FRS 102, one more reason to ask how your rentals will be deducted.

Power purchase agreements

Under a PPA the provider pays for the system, so the capital expenditure is the provider's and your business has nothing to claim allowances on; it pays for the electricity it uses. Whether the provider can claim on panels fixed to your roof is a question for the fixtures rules. For the detail, see who claims capital allowances on leased or PPA solar.

What lands on your balance sheet under FRS 102 from 2026

The "off balance sheet" pitch that used to come with leasing no longer holds for a business reporting under FRS 102. Amendments to FRS 102 effective for accounting periods beginning on or after 1 January 2026 remove the distinction between operating and finance leases for lessees, who must recognise right-of-use assets and lease liabilities on the balance sheet for most leases. The Financial Reporting Council expects a business that had operating leases to show higher assets and liabilities, lower rental expenses and higher depreciation and interest, with the interest typically front-loaded.

Two exemptions keep a lease off the balance sheet if the business takes them: short-term leases of less than 12 months, and leases of low-value assets. A multi-year solar lease is not a short-term lease. The FRC also warns that gearing, interest cover, the current ratio and EBITDA may change, with possible effects on loan covenants, so check the covenants on existing borrowing before you sign a lease.

Micro-entities reporting under FRS 105 are treated differently. FRS 105 retains the operating lease and finance lease models, and a lessee under it still recognises operating lease payments as an expense over the lease term. A PPA is written as a contract to buy electricity, but the label does not settle the accounting: under FRS 102 a contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Ask your accountant to test any PPA in which your business takes the output of panels on its own roof. If you buy with cash or borrowing, the system is simply your asset and any borrowing a liability.

The seven routes side by side

The table summarises the position set out above. It is general information, so confirm the tax and accounting treatment for your own business with your accountant.

Asset finance arranged as hire purchase follows the hire purchase row. For how the routes compare on cost over time, see the side-by-side comparison of every route.

What to have ready before you apply

A funder checks the business and the project. Having these ready shortens the process and makes offers easier to compare.

• Accounts and credit. Your credit rating matters to approval, and recent accounts show what you owe and are owed. If you use the cash basis, GOV.UK notes that a bank could ask to see accounts drawn up on the traditional basis before agreeing a loan.
• Affordability. For leasing and hire purchase, the British Business Bank says the biggest factor in approval is proving you can make the payments, and providers can also consider the revenues the asset may generate.
• An itemised quote and certification. For solar PV up to 50 kW, Smart Export Guarantee payments depend on showing that both the installation and the installer are suitably certified, for example under MCS; above that, licensees decide what certification evidence they accept. More on Smart Export Guarantee payments.
• The building. Freehold or lease, the years left on any lease, break clauses and landlord consent, because the panels become part of the building.
• Existing borrowing. Covenants that a new lease could affect under FRS 102, and any personal guarantees already given.

The full checklist is in what lenders check before funding business solar. When you are ready to test the routes against real figures, request a costed quote for your building.

Solar panel finance: common questions

Can a business get solar panels on finance?

Yes. A UK business can buy outright or use a business or green loan, hire purchase, asset finance, an operating lease, a power purchase agreement, or a no-upfront package that is one of those underneath. Each route decides who owns the panels, who claims the capital allowances and what goes on the balance sheet.

Can a business get a 0% loan for solar panels?

Not through the household offers that advertise one. Energy suppliers' 0% plans, such as those advertised by E.ON Next and So Energy, are consumer finance for homes, and the Warm Homes Loan Scheme lends on a personal basis only to owner-occupiers of domestic properties and private rented sector landlords; its rules say lending to business or SPV type structures will not be allowed. Business finance is priced lender by lender.

Is business solar finance regulated by the FCA?

It depends on who borrows and how much. Consumer-credit rules cover individuals and partnerships of two or three people that are not all companies, so lending to a limited company is outside them. Credit of more than £25,000 taken wholly or predominantly for business purposes is exempt, while £25,000 or less to a sole trader or small partnership can be regulated.

Who claims the capital allowances on financed solar panels?

If your business owns the system through cash, a loan or hire purchase, it claims: the Annual Investment Allowance covers 100% of up to £1 million a year, and companies can claim the 50% first-year allowance above that. Under a lease or a PPA the funder owns the system and you normally cannot claim. For roof panels on hire purchase the fixtures rules decide, so agree the timing with your accountant.

What interest rate will a business pay on solar finance?

There is no single rate. Each lender prices the deal on the type of business, the loan size, your creditworthiness, the repayment period and any security, and unsecured loans tend to cost more than secured ones. Variable rates move with Bank of England Bank Rate, which was held at 3.75% on 17 September 2026.

Does leasing keep solar panels off the balance sheet?

Usually not any more. For accounting periods beginning on or after 1 January 2026, FRS 102 requires lessees to recognise right-of-use assets and lease liabilities for most leases, with exemptions for short-term leases of less than 12 months and low-value assets. Micro-entities reporting under FRS 105 still treat operating lease payments as an expense.

Is there a government grant for business solar panels?

Not a general one. A Find a Grant search for solar returned no grants on 6 October 2026. The Growth Guarantee Scheme is a 70% guarantee to lenders rather than a grant, and in Wales the Development Bank of Wales Green Business Loan Scheme lists solar PV among its eligible projects. Business Energy Scotland's SME Loan is not accepting new applications for solar PV projects.

Do I need a deposit for solar panel finance?

It depends on the route. Hire purchase starts with a deposit, and lease rentals may include an advance rental. A business loan can cover the full cost if the lender agrees, and under a PPA the provider pays for the system.