Refinance & Sale-and-Leaseback: Solar Asset Finance

Most solar finance is about funding a new system. Refinance and sale-and-leaseback do the opposite: they release the capital tied up in a system you’ve already paid for, so you can put that money to work elsewhere while the panels keep generating on your roof.

How sale-and-leaseback works

The mechanics are straightforward. You sell your existing, owned solar system to a funder for a lump sum, then lease it straight back. You receive the cash; the funder takes ownership of the asset; you keep using the system exactly as before and continue taking the energy savings. In effect you’ve converted an illiquid asset on your balance sheet back into working capital, while retaining all the operational benefit.

This is increasingly in demand from businesses that bought solar early with cash — often in the 2022–2024 energy-price spike — and now want that capital available for the next phase of investment, whether that’s a second roof, battery storage, EV charging, or something unrelated to energy entirely.

A worked example

A logistics group paid cash for a 380 kW system two years ago, at around £420,000. They wanted to fund solar on a second warehouse without borrowing fresh capital. We arranged a sale-and-leaseback that returned £420,000 to the business, structured with their accountant to manage the tax position; the freed capital part-funded the second site’s installation. The original system kept generating for the first warehouse throughout — nothing changed operationally.

The tax needs care

This is the route where structuring matters most. Disposing of an asset you’ve claimed capital allowances on can trigger a balancing charge — broadly, a clawback of relief if the sale proceeds exceed the asset’s tax written-down value. Anti-avoidance rules around sale-and-leaseback transactions can also apply. None of this makes the route a bad idea; it simply means it has to be done properly, with your accountant in the loop from the start. We won’t arrange a sale-and-leaseback without that.

There’s a second check worth knowing about: if the original system was part grant-funded, the grant may carry clawback terms triggered by a change of ownership. We review the grant conditions before structuring anything — a detail covered in our grants and funding guide.

Refinance as an alternative

If a full sale-and-leaseback isn’t the right fit, a straight refinance — borrowing against the value of the owned system via a secured facility — can release capital without disposing of the asset, avoiding the balancing-charge question altogether. Which is better depends on your tax position, your balance sheet and how much capital you need to free. We model both.

Who this suits

Refinance and sale-and-leaseback work best for businesses that:

• already own a solar system outright (typically bought with cash);
• want to release that capital for another investment without losing the system; and
• have an accountant available to confirm the tax treatment and any grant conditions.

If you’re funding a new system rather than releasing capital from an existing one, start with hire purchase, a finance lease or an equipment loan instead.

Release the capital in your system

Tell us about the system you own — size, age, what you paid, and whether any grant was involved — and we’ll model both sale-and-leaseback and refinance, with the tax position checked alongside your accountant. Request a quote to get started.