Solar asset finance — FAQs

Solar asset finance is a way of funding a commercial solar system so you pay for it over time rather than all at once, while still owning (or using) the equipment. Common structures are hire purchase, finance lease, operating lease, an equipment loan, or refinance and sale-and-leaseback of a system you already own. The repayment is usually structured to sit below the energy saving the system delivers, so the project is cash-flow positive from the start.

For most profitable businesses, yes — over the asset's life. A Power Purchase Agreement needs no capital, but the funder owns the system and keeps the capital allowances and the Smart Export Guarantee income, and you buy power back for 15–25 years. With asset finance you own the system, keep the tax relief and export income, and once the (typically 2–7 year) term ends your generation is effectively free. We model both routes in pounds so you can compare.

It depends on the structure. Under hire purchase or an equipment loan, HMRC treats you as the owner, so you can claim the Annual Investment Allowance (100% up to £1m) or the 50% first-year allowance on the full cost. Under a finance lease the lessor usually claims the allowances and reflects the benefit in lower rentals; under an operating lease there are no allowances for you, but the rentals are a deductible expense.

No. Solar PV is classed as special-rate (integral-feature) expenditure, and 100% full expensing applies only to main-rate plant and machinery. Solar instead qualifies for the Annual Investment Allowance at 100% up to £1m a year, and for the 50% first-year allowance above that. Both are now permanent. A lot of solar sales material gets this wrong — we model it correctly with your accountant.

Finance rates depend on your covenant strength, the term and the structure, but the test that matters is whether the monthly repayment is lower than the energy the system saves you. On most £30k–£1m projects over a 5–7 year term it is, which is why they are cash-flow positive from month one. We show the total cost of credit in writing and compare it against paying cash.

With hire purchase you are treated as the owner from the start: you claim the capital allowances, the asset is on your balance sheet, and title transfers to you at the end for a nominal fee. With a finance lease the lessor owns the asset and usually claims the allowances (passing the benefit back as lower rentals), VAT is spread across the rentals rather than paid up front, and you use rather than own the system.

Hire purchase, equipment loans and finance leases sit on the balance sheet. Operating leases were historically off balance sheet, but under the revised FRS 102 — effective for accounting periods beginning on or after 1 January 2026 — most leases come on balance sheet as a right-of-use asset and lease liability, with only short-term and low-value exemptions. Speak to your accountant about how this affects your covenants.

The owner of the system. Under asset finance — hire purchase, equipment loan, or capital purchase — that is your business, so you keep the SEG export payments. Under a PPA the third-party owner keeps them. That export income is part of the financial case for owning your system rather than buying its output.

Yes. A single asset-finance facility or equipment loan can fund solar PV, battery storage and EV charging as one project, which often improves the overall economics because the battery lifts self-consumption and the chargers add a revenue or amenity stream. We model the combined system and structure one repayment across it.

On hire purchase or a loan you own the system outright once it's paid off — typically a 25-year-plus asset generating free electricity. On a finance lease you can continue on a peppercorn secondary rental or sell the asset as the lessor's agent. On an operating lease you return, extend, or sometimes buy at fair value.

Yes — through refinance or sale-and-leaseback. You sell the existing owned system to a funder for a lump sum and lease it back, freeing capital for the next investment while the system keeps generating for your site. This needs careful structuring with your accountant because disposing of the asset can trigger balancing charges, and grant-funded systems may have clawback terms.

No. We arrange finance from around £25,000, which covers small commercial rooftops, through to multi-megawatt schemes. Smaller, unsecured facilities are often supported by the British Business Bank Growth Guarantee Scheme; larger projects are assessed on covenant strength and the project's own cash flows.

Most commercial solar asset finance is unregulated business-to-business lending between your company and an FCA-authorised lender. Where the borrower is a sole trader or small partnership below the Consumer Credit Act threshold, consumer-credit protections apply. We broker only through established Finance & Leasing Association member funders and disclose the full cost of credit before you sign.

An indicative finance decision usually takes 24–72 hours once we have basic accounts information, and full approval typically follows within one to two weeks. We align the finance drawdown with the installation programme so payment is released on commissioning, not before the system is generating.

To model the project we need your recent electricity bills or half-hourly data and roof or site details; to arrange finance we need basic company information and usually two years' filed accounts (or management accounts for younger companies). From that we produce a like-for-like comparison of cash purchase, hire purchase, lease and — where relevant — a PPA.