Finance Options for Solar Projects – Commercial Funding and Solar Business Grants
Investing in commercial solar projects doesn’t have to strain your budget. We can help you navigate the commercial solar funding options including capex, power purchase agreements, asset finance as well as business solar grants.
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Finance options for solar projects
One of the biggest obstacles for businesses to start a solar project is the upfront cost. But this obstacle is effectively a thing of the past. With an overall reduction in the cost of installing solar and the emergence of several funding options, getting solar for your business is now easier than ever.
There are three broad methods of funding a solar project
Commercial solar business grants are sometimes made available, but these are often dependent on current Government Policy as well as local government initiatives and can be limited to specific geographical areas or industry sectors.
Solar funding: Capital Expenditure (Capex)
Capex is very simple to understand. If you have the funds available to spend on solar up front, you will get the best payback from the system. By spending capital on the solar project your initial outlay is relatively high, but you will own the system outright, from day one and will receive the highest return on your investment.
Because you own the system, you will receive the maximum cost benefits from reduced electricity costs. Businesses who spend on solar using capex will typically see a return in under seven years, and we often see customers achieve a full return within four or five years.
Advantages of Capex
- You start to see the full cost-saving benefit as soon as the system is turned on.
- Full green credentials – all CO2 reductions can be attributed against your Scope 2 emissions
- No interest or finance payments are required
- You own the system, meaning if you own the building, the property value increases, and it is more attractive to potential tenants or buyers.
Who is eligible?
- Any company with funds available. Typically a 100kWp system would cost around £70,000. This is roughly equivalent to the ConSpare project we undertook.
- A 500kWp system would cost closer to £300,000. Our Swift Precision Tools project is a useful benchmark as a 600kWp system.
Power Purchase Agreements (PPA) for Solar
A solar PPA is a great vehicle for funding a solar project. A solar power purchase agreement means a third party (often a PPA fund) will finance the solar panels going onto the customer’s roof, installed by a professional commercial solar installer like Geo Green Power.
The customer is then sub-metered for the electricity, which is charged at a reduced rate than their existing electricity tariff from the grid.
The customer is able to attribute all of the green credentials of having solar (Scope 2 emissions for example) to their business operations without paying any upfront cost. They also obtain electricity at a lower rate than they were paying before.
Advantages of PPA
- Benefit from sustainable energy without the upfront cost
- Save on energy bills and lessen your exposure to energy market price fluctuations
- Reduce your carbon footprint and benefit from the competitive advantage of your business demonstrating a commitment to sustainability
- No upfront costs to accessing renewable energy for your business
Who is eligible?
- Size of a company and energy consumption – establishments with higher energy needs will have increased access to PPA options
- Your location and premises – your geographical location needs to be suitable for a renewable energy project
- Grid connection agreement – as with all solar installations, your solar PV system will require DNO approval
- Your energy usage patterns – fluctuating energy usage may mean that your business is not a good fit for a PPA
Asset Finance for Solar
Asset finance is a specific type of loan funded through a financial institution like Anglo Scottish. They will lend the customer the funds to pay for a solar project, whilst charging the customer a small premium via interest.
It is normal to pay a small deposit (20%) upfront, but like a PPA, customers receive all the sustainability credentials solar offers. If the interest payments on the loan are lower than the customer’s previous electricity rate, they will be cash-positive from day one.
Several of our customers have achieved their solar projects through asset finance.
Advantages of Asset Finance
- Small or no upfront costs when purchasing high-value items
- Allows you to spread the cost of your solar PV system over several payments
- Fixed payments make budgeting easier
Who is eligible?
- You may have to demonstrate that you have a minimum turnover threshold in the region of £100,000 per annum
- Your business must be capable of meeting all ongoing financial commitments. Your credit history and stability will need to be assessed
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If you’re interested in understanding what renewable energy can offer your operation contact our team today!
Business Solar Grants
Business solar grants are available sporadically. Many government grants and subsidies for solar and rtenewable energy are now closed but there are some new schemes coming online. The availability of grants depends on the Government’s current policy, but local government often put funds together to encourage local businesses to maintain green initiatives, often in particular areas.
Current business grants available for solar
One of the most prevalent grant schemes, launched in March 2025 was Great British Energy’s funding for Schools and Hospitals. This is a fund of £200m ring-fenced for 200 schools and 200 hospitals to take advantage of solar PV to boost efficiency in the public sector.
Regional solar schemes
Some of the current regional schemes include:
- Suffolk’s ‘Net Zero Innovation Fund.
- The Staffordshire CC Green Solutions Programme.
- ‘The Accelerator Project’ running in the East Midlands.
Ofgem also has some resources available to help businesses find out more about solar grants and funding.
You can also ask your local council for information of sustainability and energy efficiency grants.
Geo Green Power went above and beyond to support the implementation of this project and their vast knowledge, support, and attention to detail was second to none.
The systems are working well and we’re already seeing a higher than expected return even in the less favourable periods of the year.
The team at Geo Green Power were brilliant. The site-workers completed the job carefully, efficiently and quickly. The installation has been working really well and we’re very pleased with it so far.
Comparison of Solar Funding Options
Choosing a finance option will very much depend on your business circumstances and requirements. Not every option is right for every business. Geo Green Power can support you with finding out more about which funding model is best for your business.
You can contact us today to discuss the options. Once we attend your site and provide a free survey, we will be able to discuss all the viable options with you. We will provide honest, experienced insights into which funding model may best suit your individual needs
To understand more about what finance option is right for you, you can look at our quick solar funding comparison guide.
Funding Commercial Solar: FAQs
What are the main ways to fund a commercial solar installation?
Commercial solar projects can be funded by using either capital expediture (capex), Power Purchase Agreements (PPAs), Asset Finance or Grants. New funding models are developed all the time so using a combinations of funding methods is a possibility.
What is a Power Purchase Agreement and how does it work?
A Power Purchase Agreement or PPA, is an agreement between a customer, and a PPA fund. The PPA cover the cost of the solar installation on behalf of the customer, and then sub-meter the electric back to the customer. This rate allows the PPA fund to charge a small levy for the use of the electric, however it is still lower that the customers current electricity tariff.
Can we install solar panels with no upfront cost?
Yes! Power Purchase Agreements are the best funding model for this. Asset Finance will allow you to purchase solar, but you would have to pay a deposit, usually the VAT, currently 20%,m and then a rate as agreed with your lender.
What is the difference between asset finance and a PPA?
Technically quite a lot. Both allow you to purchase solar without a significant upfront cost. But the main difference are – asset finance means you will own the solar once the finance arrangement has ended, but for a PPA, the PPA fund effectively own the solar – but you will have options once the term has finished.
What are the benefits of using capex over finance options?
The big benefit is that you own the system, and reap the full financial benefits from day one. Payback is often within five years, so for the majority of businesses – solar is a very effective, solid investment.
Are there any Government grants or incentives for commercial solar energy?
Local councils often provide grants, schemes and subsidies, but it is best to speak to your local council. You can also look at the Ofgem website which provides advice and information.
Is solar finance available to all business types?
Yes it is, both private and public sector businesses can utilise commercial solar funding options. Speak to our team to find out how we can help.
How do I know which funding option is right for my business?
Give us a call! If you contact us on info@geogreenpower.com or call 0800 988 3188 – we will be able to guide you through the options. We are not a financial institution however so cannot provide financial advice, but we will provide sound information on all current solar funding options.
Does using finance affect ownership of the solar system?
Yes, sometimes. Generally, if you opt for PPA, then the solar is owned by the PPA fund. If you choose asset finance, then you will have ownership.
What happens at the end of the finance or PPA term?
For finance you will have paid your last installment, and the system will be yours, with you receiving the full benefits. The end of a PPA term will depend on the specific agreement, but you usually have the option to purchase the system at a reduced rate.
Will commercial solar still save my business money, even if we use finance?
Absolutely! The beauty of both PPAs and asset finance is that you benefit from reduced electricity bills from day one.
How long does the funding process take?
That depends on the agreement, the terms, and several other factors. It can take a longer time than without outright capex, but you would need to speak to the PPA fund or finance provider for more details.