Switching to solar energy is a smart investment for UK businesses seeking to reduce costs, increase energy security, and meet sustainability targets. However, the upfront cost of a commercial solar PV system can be significant. Fortunately, Centreco offers a range of solar PV finance options that make these systems accessible to organisations of all sizes. This article explores the three most common ways businesses can finance solar PV installations: self-funded solar PV, asset finance for solar PV (hire purchase), and Power Purchase Agreements (PPA).

Self-Funded Solar PV Installations

Self-funding means your business pays for the solar PV system outright using its own capital. Businesses that choose this finance option are looking for long-term savings and the security that comes with full ownership of a renewable energy system. Investing directly in solar PV leads to a strong return on investment and promotes your environmental credentials without needing any third-party involvement. However, self-funding requires a larger upfront investment and means your business is responsible for the ongoing maintenance and management of the system.

The key advantages of self-funding your installation:

• Ownership and control of the solar asset.
• Long-term savings and return on investment.
• Enhanced sustainability credentials.

While self-funded solar PV installations can provide significant financial returns, exploring all available finance solutions is advisable. Looking at both self-funded and third-party financing options can help you choose the correct solar PV installation for your long-term business goals.

Hire Purchase (Asset Finance)

Hire purchase, also known as asset finance, allows businesses to spread the cost of a solar PV system over a fixed term. Your business pays an initial deposit (often the VAT) and then makes regular payments until the end of the agreement. At this point, ownership of the system transfers to you. This option preserves working capital and provides budgeting certainty, making it a popular choice for businesses that want to own their solar system without a large upfront outlay.

The key advantages of hire purchase:

• You can spread the cost over several years.
• Ownership of the system at the end of the term.
• Fixed payments for easier budgeting.
• Potential to reclaim VAT and benefit from capital allowances.

Hire purchase is a reliable and flexible solar PV finance option for businesses that want to balance cash flow with long-term asset ownership. Spreading the cost and eventually securing full ownership allows companies to benefit from predictable budgeting and significant energy savings once you’ve finished paying for the system.

Power Purchase Agreement (PPA)

A Power Purchase Agreement (PPA) is a financing model where a third-party provider funds, installs, and maintains the solar PV system on your site. Your business only pays for the electricity used by the system, and this is typically at a lower rate than grid electricity. PPAs are ideal for organisations looking for immediate savings and sustainability benefits without the responsibility of owning or maintaining a solar PV system. In the majority of cases the savings of the system will be greater than the cost of the asset of finance, so your system will also show a positive cash flow.

The key advantages of PPAs:

• Zero upfront investment: Your business can access solar energy without the need for any initial capital outlay, preserving cash flow for other priorities.
• Price security: PPAs offer a fixed or predictable electricity cost for the duration of the contract, protecting your business from market price fluctuations and enabling more accurate budgeting.
• No maintenance or operational responsibility: The third-party provider handles all system maintenance and performance monitoring, ensuring hassle-free operation for your business.
• Supports sustainability and carbon reduction goals: By using renewable solar energy, your organisation can demonstrate a strong commitment to environmental responsibility.

With a Solar Power Purchase Agreement, you lock in predictable energy costs and eliminate upfront capital spending. PPAs also offer businesses a low-risk pathway to solar adoption and long-term savings.

Maximising Your Solar PV Return on Investment

Choosing the right solar financing option is the key to maximising your solar PV return on investment. Whether you opt for solar panel funding through a PPA or prefer commercial solar asset ownership via self-funding or asset finance, Centreco’s experts can help you navigate your options.

Why Finance Solar PV with Centreco?

As the UK’s leading provider of commercial solar panels, Centreco offers tailored finance solutions to suit your business needs. Our experts guide you through every step of the process, from system design and commercial modelling to installation and aftercare. Our experts ensure you achieve the best return on investment, future-proofing your business, reducing energy costs and enhancing your sustainability credentials.

Contact Centreco today to discuss the best solar PV financing options for your organisation and book a free, no-obligation solar appraisal.

Click here to contact Centreco today.