# Solar PPA vs leasing: what's the difference for business?

With a solar PPA you pay for the energy the system produces, at a rate below the grid, and maintenance is included. With a lease you pay a fixed rental for the equipment regardless of how much it generates. A PPA ties cost to output and risk to the provider; a lease is a predictable fixed operating cost.

## How each one works

A PPA charges per kilowatt-hour generated — you only pay for the clean power you get, and the provider carries performance and maintenance risk. A lease is a rental agreement: you pay a set amount to use the equipment, whatever it produces.

## Cost basis and risk

Because a PPA is priced per unit generated, an underperforming system costs you less — the risk sits with the provider. A lease keeps payments fixed and predictable, but performance risk sits more with you (though you may claim allowances on a leased or financed asset).

## Ownership and end of term

Both routes can lead to ownership. Many PPAs transfer the system to you for a nominal sum at the end; leases often include a purchase option or return. Check the end-of-term terms in each case.

## Which suits your business?

If you want zero maintenance responsibility and cost tied to generation, a PPA fits. If you prefer a fixed operating cost and potential tax treatment of the asset, a lease may suit. We can compare both on our funding options page.

## Frequently asked questions

**Is a PPA or a lease cheaper?**

It depends on your usage, the system’s output and the terms offered. A PPA links what you pay to what the system generates; a lease fixes the payment. The only reliable way to compare is against your own numbers in a proposal.

**Can I claim tax relief on a leased solar system?**

Leasing and hire purchase can have tax advantages, such as offsetting payments or claiming capital allowances when you own the asset. Your accountant can confirm what applies to your business.

---

Source: [Solar PPA vs leasing: what's the difference for business?](https://ppafunding.com/guides/solar-ppa-vs-leasing) · Author: PPA Funding team · Updated: 2026-07-30

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