# Commercial solar funding: how UK businesses pay for solar

UK businesses fund commercial solar in four main ways: a Power Purchase Agreement (PPA), where a funder pays for the system and you buy the power at a fixed rate below the grid with £0 upfront; hire purchase or leasing, which spread the cost; buying outright (CapEx); and, occasionally, grants. A PPA is the most common route for zero-upfront solar.

## Four ways to fund commercial solar

| Route | Upfront | Payment | Ownership | Maintenance | Accounting | Best for |
| --- | --- | --- | --- | --- | --- | --- |
| Power Purchase Agreement (PPA) | £0 | Fixed rate per kWh | Yours for £1 at end of term | Fully included | Off-balance-sheet (operating cost) | Businesses that want no capital outlay, no risk and no maintenance — just lower bills from day one. |
| Outright Purchase (CapEx) | Full system cost | One-off capital cost | Yours from day one | Optional O&M package | Capital asset | Businesses with capital available that want the strongest long-term return and full ownership. |
| Hire Purchase (HP) | Deposit | Fixed monthly instalments | Yours at end of agreement | Optional O&M package | Asset on balance sheet | Businesses that want to own the system but spread the cost and protect their cash flow. |
| Leasing (Operating / Finance Lease) | Low / none | Fixed rentals (opex) | Return, extend or buy at end | Optional O&M package | Rentals as operating expense | Businesses that want minimal upfront cost and predictable, tax-efficient operating payments. |

**Power Purchase Agreement (PPA)** — Zero upfront. Pay only for the clean power you use.

Pros: No upfront cost or capital outlay; Rate guaranteed at least 30% below the grid; Fully funded, installed and maintained for you; System becomes yours for a nominal £1 at the end.

Consider: A long-term agreement (typically 15–25 years); You don't own the system during the term.

**Outright Purchase (CapEx)** — Own it from day one and keep 100% of the savings.

Pros: Best long-term return on investment; Own the asset and keep every kWh of savings; May qualify for capital allowances / full expensing; No financing or interest cost.

Consider: Ties up capital that could be used elsewhere; You're responsible for maintenance (we can provide it).

**Hire Purchase (HP)** — Spread the cost, own the system at the end.

Pros: Preserve working capital — pay over an agreed term; Own the system outright at the end; Tax-efficient: claim capital allowances and offset interest; Fixed, predictable monthly payments.

Consider: Interest applies over the term; Subject to finance approval.

**Leasing (Operating / Finance Lease)** — Low upfront, predictable rentals as an operating cost.

Pros: Little or no upfront cost; Rentals are typically 100% tax-deductible; Predictable, fixed payments; Flexible end-of-term options.

Consider: You may not own the system at the end (depends on lease type); Subject to finance approval.

## The guide library

### Funding routes

The ways a UK business can pay for commercial solar — and what each means for cost, ownership and risk.

- [Can my business get free solar panels? What “free solar” really means](https://ppafunding.com/guides/can-my-business-get-free-solar-panels) ([md](https://ppafunding.com/guides/can-my-business-get-free-solar-panels.md))
- [What does “£0 upfront” commercial solar actually mean?](https://ppafunding.com/guides/what-does-zero-upfront-solar-mean) ([md](https://ppafunding.com/guides/what-does-zero-upfront-solar-mean.md))
- [What is a corporate PPA?](https://ppafunding.com/guides/what-is-a-corporate-ppa) ([md](https://ppafunding.com/guides/what-is-a-corporate-ppa.md))
- [Types of PPA explained: on-site, off-site, sleeved and virtual](https://ppafunding.com/guides/types-of-power-purchase-agreements) ([md](https://ppafunding.com/guides/types-of-power-purchase-agreements.md))
- [Solar PPA vs buying outright: which is right for your business?](https://ppafunding.com/guides/solar-ppa-vs-buying-outright) ([md](https://ppafunding.com/guides/solar-ppa-vs-buying-outright.md))
- [Solar PPA vs leasing: what's the difference for business?](https://ppafunding.com/guides/solar-ppa-vs-leasing) ([md](https://ppafunding.com/guides/solar-ppa-vs-leasing.md))
- [On-Balance-Sheet vs Off-Balance-Sheet Solar: How the Funding Route Shows in Your Accounts](https://ppafunding.com/guides/on-balance-sheet-vs-off-balance-sheet-solar) ([md](https://ppafunding.com/guides/on-balance-sheet-vs-off-balance-sheet-solar.md))
- [Grants and funding for commercial solar in the UK](https://ppafunding.com/guides/grants-and-funding-for-commercial-solar) ([md](https://ppafunding.com/guides/grants-and-funding-for-commercial-solar.md))

### How a solar PPA works

The detail of the most common zero-upfront route — the contract, the rate, billing and what happens at the end.

- [What's in a solar PPA contract? Key terms explained](https://ppafunding.com/guides/whats-in-a-solar-ppa-contract) ([md](https://ppafunding.com/guides/whats-in-a-solar-ppa-contract.md))
- [How a Solar PPA Is Billed: Metering, Invoices and What Your Bill Looks Like](https://ppafunding.com/guides/how-a-solar-ppa-is-billed) ([md](https://ppafunding.com/guides/how-a-solar-ppa-is-billed.md))
- [Fixed vs index-linked PPA rates explained](https://ppafunding.com/guides/fixed-vs-index-linked-ppa-rates) ([md](https://ppafunding.com/guides/fixed-vs-index-linked-ppa-rates.md))
- [How to read a solar PPA proposal](https://ppafunding.com/guides/how-to-read-a-solar-ppa-proposal) ([md](https://ppafunding.com/guides/how-to-read-a-solar-ppa-proposal.md))
- [What Happens at the End of a Solar PPA?](https://ppafunding.com/guides/what-happens-at-end-of-solar-ppa) ([md](https://ppafunding.com/guides/what-happens-at-end-of-solar-ppa.md))
- [How to switch to a solar PPA (step by step)](https://ppafunding.com/guides/how-to-switch-to-a-solar-ppa) ([md](https://ppafunding.com/guides/how-to-switch-to-a-solar-ppa.md))

### Costs, savings & tax

What commercial solar costs, what it saves, and how the numbers work for your business.

- [How much do commercial solar panels cost in the UK?](https://ppafunding.com/guides/how-much-do-commercial-solar-panels-cost) ([md](https://ppafunding.com/guides/how-much-do-commercial-solar-panels-cost.md))
- [How much can your business save with commercial solar?](https://ppafunding.com/guides/how-much-can-a-business-save-with-solar) ([md](https://ppafunding.com/guides/how-much-can-a-business-save-with-solar.md))
- [Commercial solar payback period: what to expect](https://ppafunding.com/guides/commercial-solar-payback-period) ([md](https://ppafunding.com/guides/commercial-solar-payback-period.md))
- [Is a solar PPA worth it for your business?](https://ppafunding.com/guides/is-a-solar-ppa-worth-it) ([md](https://ppafunding.com/guides/is-a-solar-ppa-worth-it.md))
- [Capital allowances on commercial solar: full expensing & AIA explained](https://ppafunding.com/guides/capital-allowances-on-commercial-solar) ([md](https://ppafunding.com/guides/capital-allowances-on-commercial-solar.md))
- [VAT on commercial solar explained](https://ppafunding.com/guides/vat-on-commercial-solar-explained) ([md](https://ppafunding.com/guides/vat-on-commercial-solar-explained.md))

## Frequently asked questions

**How can a business get commercial solar with no money upfront?**

Through a Power Purchase Agreement (PPA). A funder pays for the design, equipment, installation and maintenance, and your business buys the electricity the system generates at a fixed rate guaranteed at least 30% below the grid. There is no capital cost, and the system becomes yours for £1 at the end of the term.

**What is the best way to fund commercial solar?**

It depends on your capital and priorities. A PPA suits businesses that want zero upfront cost and no maintenance risk; buying outright suits those with capital who want the full lifetime savings; hire purchase and leasing sit in between. As an introducer, we compare each against your own numbers.

**Who owns the solar panels under a funded agreement?**

Under a PPA the funder owns and maintains the system for the term (typically around 20 years), then it transfers to your business for a nominal £1. With hire purchase or an outright purchase you own the system from the outset.

**Are there grants for commercial solar in the UK?**

Grants exist but are limited and usually part-fund a purchase rather than cover the whole cost. For most businesses a PPA or asset finance is a more reliable route to zero or low upfront cost. We can flag any current schemes relevant to your situation.

## Related pages

- [Funding options compared](https://ppafunding.com/funding-options)
- [Pricing](https://ppafunding.com/pricing)
- [All guides](https://ppafunding.com/guides)
- [Get a free quote](https://ppafunding.com/get-a-quote)

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Source: [Commercial Solar Funding](https://ppafunding.com/commercial-solar-funding) · Contact: 01743 649 888 · info@ppafunding.com · https://ppafunding.com

PPA Funding is an independent introducer operated by DVC Group Ltd (Companies House 10462808), Shrewsbury — not the installer or the funder. The service is free to use; a commission may be earned from partner funders at no extra cost. Content is educational and is not financial or tax advice.