How to finance commercial solar: buy, PPA, lease — or rent out your roof

The right funding route is less about the panels and more about your balance sheet: how much capital you can commit, how long you will occupy the building, and whether you want to own the asset and its tax relief or simply cut your energy bill from day one. The four routes below trade those things off in different ways. When you want a number for your roof, the calculator gives you one in about a minute.

How to finance commercial solar panels

There are four mainstream routes. They differ chiefly on three things: who pays upfront, who owns the system (and therefore claims the tax relief), and who keeps the long-term savings.

The pattern is a trade between capital and control. Buying keeps everything — savings, asset, tax relief — but ties up cash. The other three remove the upfront cost in exchange for handing the ownership, and most of the upside, to a funder.

Buying outright

Buying gives the best lifetime return: you own the system, keep every unit of saving, and claim the tax relief. Payback typically lands in 4–7 years, after which the generation is close to free for the rest of the 25-year-plus life. The tax position is the part most businesses underestimate — the £1m Annual Investment Allowance lets you deduct 100% of the cost from year-one profits, worth about 25% of the project back at the 25% corporation tax rate. A VAT-registered business also reclaims the 20% VAT on a commercial install.

Where the cash isn't available outright, asset finance lets you buy the system over time while still owning it, which can keep the capital allowances with your business. Our grants and tax relief guide works through the AIA on a worked example.

Solar PPAs explained

A Power Purchase Agreement removes the upfront cost entirely. A funder pays for, owns and maintains the system on your roof, and you buy the power it generates at a fixed rate of 10–17p per kWh — below the 25–30p grid rate, so you save from day one without spending capital. Terms usually run 15–20 years (within a 10–25 year range), with the rate linked to inflation (CPI), so it escalates over time but typically stays under grid prices.

The trade-offs: because the funder owns the asset, the funder claims the capital allowances — there are no capital allowances for the host. At the end of the term the system usually transfers to you for a nominal fee. A sleeved PPA, where power is delivered via the grid rather than a direct wire, adds roughly £15–20 per MWh for the arrangement.

"Free solar panels for business" — what that really means

Offers of "free solar panels" for businesses are almost always a funded PPA in different words. The panels are free in the sense that you pay nothing upfront — but you do not own them, and you pay for the power they produce over a 15–20 year contract. It can be a genuinely good deal for a business that wants lower energy bills without capital outlay and is happy to forgo ownership and the tax relief. It is not free electricity, and the long-term value is lower than buying. Read the rate, the escalation terms and the end-of-term position before signing.

Leasing

An equipment lease spreads the cost into fixed monthly payments, typically £3,000–£5,000 a month, often with maintenance included, and can deliver a net ROI of 15% or more. It suits a business that wants predictable payments and to conserve capital, without entering a long power-purchase contract. Whether the lease keeps any tax relief with your business depends on how it is structured, so check that with your accountant before committing.

Roof rental

If you have a large roof but no appetite to invest or buy power, you can rent the roof space to a solar investor. They install and own the system and pay you £10,000–£20,000 a year for the space. You take no risk and no capital cost, but you also keep none of the generation savings — the income is the rent, not cheaper electricity. This route is most relevant to landlords and asset owners weighing roof space as an income line; the same logic underpins land and roof leasing more broadly.

Can I buy solar panels through my business?

Yes. A business buys commercial solar as a capital asset. If you are VAT-registered you reclaim the 20% VAT, and you can deduct up to 100% of the cost from year-one profits via the £1m Annual Investment Allowance — about 25% of the project back at the 25% corporation tax rate. Solar does not qualify for full expensing, but the AIA covers the full cost of most SME-scale systems. Buying through the business is what keeps the asset, the savings and the tax relief in your hands rather than a funder's.

Which route fits which business

The decision usually comes down to three questions: how much capital you can commit, how long you will occupy the building, and how heavily you use power during daylight.

Whichever route you lean towards, the underlying numbers — system size, generation and savings — should be the same. Our payback and ROI guide sets those out, our cost guide covers what you would pay to buy, and our quote-comparison checklist helps you judge a funded offer against an outright one on like-for-like terms.

Updated June 2026 · By Taro Schenker, founder of Business Solar Check. We're independent — we don't install solar. Figures are indicative UK averages; your site survey confirms the numbers for your roof.