Corporate Solar Finance & Tax Guide

Commercial Solar Finance Options: CAPEX vs Leasing vs PPA

By HeatPumpsAndSolar.co.uk Commercial Technical Team · Published 21 October 2026 · Updated 29 October 2026

Three ways to pay for rooftop solar. Which risks and rewards stay with your business?

Compare commercial solar finance options in the UK: upfront cost, ownership, maintenance, tax treatment and exit terms for CAPEX, leasing and on-site PPAs.

Executive Summary & Key Takeaways

Outright purchase gives the buyer control of the system but requires capital and an operating budget.
Hire purchase and equipment leasing are not interchangeable: ownership, tax and end-of-term rights depend on the agreement.
An on-site PPA may reduce upfront spend, but the host commits to energy purchases and roof obligations.
Compare all three using the same half-hourly demand, generation, grid tariff and DNO assumptions.

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Finance decision table

CAPEX vs leasing vs an on-site PPA

Compare contract obligations alongside site-specific generation and half-hourly demand. Leasing and hire purchase can have different outcomes; none of these columns is a tax or savings promise.

Decision point	Direct CAPEX	Equipment lease / hire purchase	Funded PPA
Upfront cost	Buyer funds the quote	Deposit and scheduled payments; amount varies	Funder may pay installation; host buys power
Asset and control	Buyer owns and controls the array	Title and end-of-term rights depend on agreement	Funder typically owns; host grants roof access
Maintenance	Buyer budgets for operation and repair	Allocation depends on contract and service plan	Confirm funder duties, exclusions and response times
Accounting and tax	Check AIA headroom and special-rate eligibility	Ownership, fixtures and reporting need advice	No host AIA on funder-owned array; assess lease elements
Contract length	No finance term; equipment still needs upkeep	Finance term and residual value as agreed	Energy and roof-rights term as agreed
Exit and roof ownership	Check property and tenant consents	Review early settlement and removal rights	Review sale, buy-out, roof works and removal

Make the numbers comparable

Ask every proposer to use the same half-hourly load, generation and export assumption over the same contract term. Put these separate cash flows on a year-by-year sheet:

Owned: initial installed cost, avoided import charges, permitted export receipts, operations and replacement costs; assess tax separately.
Financed or leased: deposit, scheduled payments, interest, service costs, residual/transfer terms and early-exit fees; check who receives generation and export value.
PPA: metered billable kWh × contracted tariff each year, plus fixed/minimum charges and indexation; check who receives export value.

Do not subtract lease payments from an outright-purchase payback and call the result a lease return. For a first pass, test the PPA offer and test the AIA assumptions separately.

Ask for like-for-like quotes with the same site inputs. Read the full finance comparison →

Choose the route by the constraint you actually have

If your business can fund the installation and hold the roof for the long term, compare outright purchase with your other uses of capital. If cash preservation is the priority, request an itemised loan, hire-purchase or equipment-lease offer and check who will own the array. If third-party ownership is acceptable, compare an on-site PPA against an owned-system quote. A tenant should establish landlord, lender and roof-access consent before treating any route as available.

Illustrative site-input model: use your own figures

Example inputs only, not a savings forecast: enter 12 months of half-hourly import data, an hourly generation estimate, the proposed installed and AC inverter capacity, grid import charges that are actually avoided, export permissions, the turnkey quote, maintenance and roof-repair costs. For CAPEX, model cash outlay and annual net avoided imports plus any permitted export income. For borrowing or leasing, add deposits, repayments, interest, residual value and exit fees. For a PPA, replace ownership economics with delivered-energy charges, indexation, minimum payments and buy-out terms. Stress-test lower daytime use, curtailed export and a roof replacement. Tax and accounting results require review of the specific contracts.

Where the three quotes can mislead

A headline payback may ignore weekends, inverter replacement, fixed grid charges and network restrictions. A lease with a low deposit may still cost more over its term and may not transfer ownership. A PPA tariff may escalate or charge for output you cannot use. Compare whole-life cash flows and ask for a priced exit if you sell the building or leave the lease. Never assume an AIA claim, off-balance-sheet treatment or maintenance cover solely from the product name.

What to ask for before the finance meeting

A single site-specific generation and half-hourly self-consumption forecast for every option.
A roof condition, structural and tenure review, including consent to install and future access.
A DNO connection assumption showing installed inverter capacity, permitted export and any G100 curtailment.
Itemised installation, finance, operation, insurance and removal costs.
Contract length, price increases, asset ownership and early-exit terms.
Written accounting and tax advice on the actual structure, including available AIA.

Financial Q&A

Frequently Asked Questions

Key financial controllers and CFO considerations

Is a PPA always cheaper than buying commercial solar outright?

No. A PPA changes the funding and risk allocation, not the site’s generation. Compare total payments, indexation, export rights and contract exit with an owned-system quote using the same load forecast.

Do we own the panels after a solar equipment lease?

Not necessarily. Hire purchase, finance leases and operating leases have different ownership and end-of-term terms. Read the agreement rather than inferring ownership from the word “lease”.

Can tenants use CAPEX, leasing or a PPA?

Potentially, but the lease, landlord and any lender must allow the roof installation and access for the proposed term. Check who pays for removal or roof works at the end of the tenancy.

Can we assume solar finance is off balance sheet?

No. Your accountant should assess the signed arrangement under the applicable framework, including FRS 102 or IFRS 16, and advise on any embedded lease.