Who Finances Commercial Solar in the UK? (And How to Check)

Quick answer: Commercial solar in the UK is funded by five kinds of provider: banks, asset-finance lenders, specialist renewable funders, finance arranged through an installer, and government-backed lending through accredited lenders. None is best in every case. Which suits you depends on your accounts, the size of the project and the structure you want, and whoever you use you should check the firm, get the terms in writing and compare the total cost of credit.

Search for solar panel finance and you will meet banks, asset-finance houses, installers and brokers, all describing themselves as funders. They are not interchangeable. A bank lends against your whole business. An asset-finance lender lends against the equipment and your covenant. A specialist renewable funder may own the system and sell you the power or lease it to you. An installer usually introduces one finance product. Knowing which kind you are talking to tells you what it can offer, what it will want from you and what to check.

We are not a lender and not an installer, so none of this is a sales pitch for a funder. It applies to this site too: the About page names the company that operates it, so you can look it up.

The kinds of funder behind commercial solar

Kind of funder	What it typically offers	What it looks at	Worth checking
Banks, high-street and challenger	Term loans and overdrafts; sometimes asset finance for existing customers	Your accounts, trading history and the relationship; may take a charge over company assets and a guarantee	Whether it will lend against the equipment alone, and its minimum
Asset-finance lenders and leasing companies	Hire purchase, finance and operating leases, equipment loans	The asset, your covenant and the installer’s quote	Any claimed Finance and Leasing Association membership; what happens at the end of the term
Specialist renewable funders	Leases, PPAs, sale-and-leaseback, sometimes purchase finance	The site, your rights over the roof or land, your electricity use and your covenant	Roof rights, landlord consent, term length and the exit
Installer-arranged finance	Usually one product from one or a few funders	Your accounts, through the installer’s introduction	Who the actual funder is; compare it with an independent offer
Government-backed lending	A 70% guarantee to the lender under the Growth Guarantee Scheme, through accredited lenders	The lender’s own credit assessment	Whether the lender is accredited and writes solar under the scheme

These are general descriptions of how the market is organised, not a statement about any named firm. Individual lenders vary, and many do more than one thing. A public-sector body has a separate route in Salix, covered in our guide to public-sector solar finance.

Why the kind of funder matters

The kind of funder shapes the deal as much as the rate. A bank may be happy to lend to a business it already knows but may want a charge over wider company assets and a director’s guarantee. An asset-finance lender is more comfortable taking the equipment as its security, so the structure is often hire purchase or a lease, which also decides who claims the capital allowances. A specialist renewable funder that owns the system will want property documents, such as roof rights and a landlord’s consent, which add time and conditions. An installer’s own finance partner is convenient but is usually a single product, so it is worth comparing it with an independent offer.

If your business is young or thinly capitalised, the Growth Guarantee Scheme can matter more than the type of funder. It does not lend, and the British Business Bank says plainly that a lender will offer better commercial terms without it if it can, but it can help an accredited lender say yes. Our guide to solar finance for a new or weak-covenant business covers what lenders weigh in that case.

How to check a funder before you sign

1. Find out who the funder actually is. Introducers and brokers are not always the lender. Ask for the legal name of the company that will sign the agreement, and its company number.
2. Check it on Companies House. Confirm the registered name, registered office, filing history and accounts.
3. Check the Financial Services Register if the firm claims FCA authorisation. Search by name and look at the firm reference number, the status and what the firm is permitted to do. Most lending to a limited company for business purposes is unregulated, so a funder can be legitimate without appearing on the register. But if a firm says it is authorised, verify it, and if you borrow as a sole trader or small partnership you may be inside the regulated regime. Our post on why domestic solar finance does not fit a business sets out where the line falls.
4. Check any trade-body claim on the body’s own list. If a funder says it is a member of the Finance and Leasing Association, look for it on the FLA’s member list rather than trusting a logo on the website.
5. Check any Growth Guarantee Scheme claim. The British Business Bank publishes the list of accredited lenders. A lender that says it offers the scheme should be on it.
6. Get the numbers in writing. The total cost of credit in pounds, the APR (a flat rate is not an APR), the fees, the security and any guarantee, the early-settlement terms and the end-of-term options.
7. If a broker is involved, ask how it is paid. Ask whether it is paid by the funder, by you or both, which funders it approaches and whether any are tied to it. Our page on what a solar finance broker does explains the model.

Red flags

• The funder will not name itself, or the name on the agreement differs from the name you were dealing with.
• You cannot get terms in writing before you are asked to commit.
• Fees are requested before you have seen the terms, or it is unclear what they cover.
• You are pushed to sign the installation quote and the finance on the same day.
• Approval is promised before anyone has seen your accounts.
• Membership of a trade body or a scheme is claimed with no list you can check.

Questions to put to every funder

• What is your minimum facility, and the longest term you will offer?
• Do you take security over the equipment, over wider company assets, or both?
• Will you ask for a personal guarantee, and can it be capped? See personal guarantees and security on solar finance.
• Do you offer Growth Guarantee Scheme backing for solar, and on which products?
• How is the early-settlement figure calculated, and is there a fee?
• When is payment released, and what triggers it?
• What documents do you need? The list is in our guide to what lenders look for in a solar finance application.

Choosing between offers

Put two or three written offers side by side and compare them on the total cost of credit, the term, the security and the end-of-term position, not on the headline rate. The solar finance repayment table shows how much the term moves the monthly payment and the total, and the finance calculator lets you test your own figures. The deeper comparison of the routes themselves is on our solar panel finance page.