Most businesses reach the same conclusion about commercial solar fairly quickly: the case for generating your own power is strong. The harder question is how to pay for it, and that decision shapes your cash flow, your tax position and your returns for years.
This guide compares the three main ways to fund commercial solar in 2026, honestly and without a hidden agenda. It comes from Cre8 Zero, an MCS-certified solar, battery and EV charging installer based in Brighton and working with businesses across Sussex, Kent, Surrey, Hampshire and Brighton & Hove.
The three ways to fund commercial solar
There is no single right answer, only the right answer for your business. Broadly, you have three routes:
- Outright purchase (capex). You buy the system with your own capital and own it from day one.
- Asset finance. You borrow to fund the system, repay over a term, and own it at the end.
- Power Purchase Agreement (PPA). A third party funds and owns the system on your roof, and you buy the electricity it generates.
Each suits a different priority, whether that is maximum return, preserving cash, or avoiding any upfront outlay. Let us take them in turn.
Option 1: Buying outright (capex)
Buying the system with your own funds delivers the strongest long-term return, because you own the asset and keep every pound of savings it generates.
There are two big advantages beyond the savings themselves. First, you own a valuable asset that keeps producing for 25 years or more. Second, an outright purchase unlocks the available tax relief.
Solar is a special rate asset, so it does not qualify for full expensing, but most business installs are covered by the Annual Investment Allowance, which gives 100% relief on the first £1m of qualifying spend. Companies may also claim a 50% first-year allowance on qualifying spend above that. Eligible new rooftop solar is also exempt from business rates until 2035. Tax treatment depends on your circumstances, so confirm the detail with a qualified accountant.
Key takeaway: buying outright gives the best return and the tax benefits, but it ties up capital you might want elsewhere.
Option 2: Asset finance
Asset finance lets you install solar now and spread the cost over an agreed term, while still owning the system at the end. It is a middle path between capex and a PPA.
The appeal is that your energy savings help offset the repayments, so the system can be broadly self-funding depending on the terms and your usage. You preserve your working capital for the core business, yet you still end up owning the asset and, in many cases, benefiting from the capital allowances (the tax position depends on the finance structure, so take advice).
The trade-off is the cost of borrowing. Interest adds to the total, and finance is subject to status. For many businesses, though, keeping cash free while still owning the asset is a sensible balance.
Option 3: A Power Purchase Agreement (PPA)
A PPA is the zero-upfront route. A third party funds, installs, owns and maintains the solar system on your roof, and you simply buy the electricity it produces at an agreed rate, typically below the grid price, over a long contract of around 15 to 25 years.
The attractions are clear:
- £0 upfront cost, so no capital is tied up
- Savings from day one, because the agreed rate is usually below what you pay the grid
- Maintenance handled by the PPA provider for the life of the contract
- Protection from grid price rises, as your rate is fixed or index-linked
The trade-offs matter too. You do not own the system, so you forgo the capital allowances and the full long-term savings that come with ownership. Over a 20-year-plus contract, the total benefit is usually lower than buying outright. A PPA is best understood as trading some long-term upside for zero risk and zero outlay.
Key takeaway: a PPA removes the upfront barrier entirely, but ownership, and the bigger long-term reward, stays with the funder.
Not sure which route fits your balance sheet? Book a free energy assessment and we will help you compare the options for your site.
The three routes side by side
Here is a simplified comparison. Treat it as an indicative guide, since the detail depends on your business and the specific terms on offer.
| Feature | Buy outright (capex) | Asset finance | PPA |
|---|---|---|---|
| Upfront cost | Full system cost | Little or none | £0 |
| Ownership | You, from day one | You, at end of term | Provider owns it |
| Tax relief (AIA, 50% FYA) | Yes, if eligible | Often, depends on structure | No |
| Maintenance | Your responsibility | Your responsibility | Provider handles it |
| Savings from day one | Yes | Yes, net of repayments | Yes, at agreed rate |
| Long-term return | Highest | Strong | Lower but risk-free |
| Best for | Cash-rich, return-focused | Preserving capital, still owning | Zero capital, zero risk |
Tax entries above are general and depend on your circumstances, so please confirm with a qualified accountant.
Which route suits which business?
The right choice usually comes down to your priorities on cash, ownership and risk.
- Choose capex if you have the capital available, want the highest return, and want to own the asset and claim the tax relief.
- Choose asset finance if you want to own the system eventually but would rather keep your cash working in the business, and the repayments sit comfortably against your savings.
- Choose a PPA if you want solar with no upfront cost, no maintenance responsibility and guaranteed savings from day one, and you are comfortable not owning the system.
Many businesses find the decision clarifies quickly once they see the numbers for their own roof and load profile. There is no universally best option, only the one that fits your goals.
Do not forget the fundamentals
Whichever way you fund it, the quality of the installation determines how well the system performs and how long it lasts. A poorly installed array is a poor investment regardless of how it is paid for.
That is why certification matters as much as funding. Every Cre8 Zero installation is MCS-certified and carried out by fully qualified electricians, backed by an insurance-backed workmanship warranty and supported by our 5-star ratings on Trustpilot and Google. You can read more about our approach to business systems on our commercial solar page.
Frequently asked questions
What is a solar PPA in the UK? A Power Purchase Agreement is a funding model where a third party funds, owns, installs and maintains solar panels on your roof, and you buy the electricity they generate at an agreed rate, usually below the grid price, over a contract of around 15 to 25 years. It requires no upfront cost.
Is it better to buy solar outright or use a PPA? Buying outright gives the highest long-term return and unlocks tax relief and asset ownership, but it ties up capital. A PPA requires no upfront cost and includes maintenance, but the total long-term benefit is lower because you do not own the system. The best choice depends on your cash and goals.
Can I claim tax relief on commercial solar? If you buy the system, most installs are covered by the Annual Investment Allowance (100% on the first £1m), with a possible 50% first-year allowance for companies above that. Solar does not qualify for full expensing. With a PPA you do not own the system, so you cannot claim these. Confirm with a qualified accountant.
What is asset finance for solar? Asset finance lets you spread the cost of a solar system over an agreed term while still owning it at the end. Your energy savings can help offset the repayments, so it preserves working capital, though borrowing adds interest and is subject to status.
Which funding option is cheapest overall? Buying outright is usually the cheapest over the system’s life because you avoid interest and PPA margins and keep all the savings. A PPA is the cheapest to start because it costs nothing upfront. Asset finance sits in between, balancing ownership with preserved cash.
Find the right route for your business
Funding should never be the reason a good solar project stalls. With capex, asset finance and PPA options all available in 2026, there is a route to suit almost any balance sheet.
Let our MCS-certified team show you the numbers and help you choose. Book a free energy assessment, call us on (020) 3038 4595, or email enquiries@cre8zero.com to talk it through.
