Commercial solar funding options
There are two main routes onto a commercial roof. Someone else funds the system and you buy the power, or you buy the system and keep everything it produces. Which is right depends less on preference than on your site and your balance sheet.
Route one: a fully funded agreement
An energy investor pays for the system, owns it and maintains it. You buy the electricity it generates on your own roof, at a rate agreed in advance and below what your supplier currently charges. There is no capital outlay and no borrowing.
- Nothing to pay upfront, so nothing competes with other capital projects.
- Monitoring, maintenance, cleaning and insurance are the owner's responsibility, not yours.
- No roof repair or upgrade costs to get the system installed.
- A fixed rate on the generated portion, increasing annually in line with the Retail Price Index under the partner's published terms.
- At the end of the term, rights and title pass to you and the power it carries on generating costs you nothing.
This is known in the industry as a Power Purchase Agreement, or PPA. We have set out the mechanics in a plain guide to solar PPAs, the contract detail in PPA terms explained, and what you actually pay in what a solar PPA costs. If you are weighing it against ownership, see PPA vs buying outright.
Route two: buying outright
You fund the system, own the asset and keep the entire saving. There is capital to find up front and a payback period to work through, typically in the region of five to eight years depending on system size and your current tariff, after which the electricity is effectively free for the remaining life of the equipment.
- The strongest lifetime return where the capital is available and not needed elsewhere.
- The asset sits on your balance sheet, with the associated capital allowances.
- Maintenance, cleaning and insurance become your responsibility.
- Often the right answer for smaller sites, where a funded agreement is not viable for the investor.
Asset finance is a middle path worth knowing about: you borrow against the system and own it from the outset, spreading the cost while keeping the asset. Installers working to recognised standards are certified under the Microgeneration Certification Scheme. It suits businesses that want ownership but not the up-front cash outlay.
Which one suits you
Three questions usually settle it. Do you have capital available, and is solar the best thing it could be doing? How long do you expect to occupy the building? And is the site large enough for a funded agreement to be worth an investor's while?
On that last point there is a practical minimum. Funded agreements carry fixed costs for the investor regardless of system size, so below a certain scale they stop making sense for them. Where that is the case we will say so, and purchase often still stacks up on the same roof.
Leasehold sites are a common question rather than a barrier. Plenty go ahead. What matters is the remaining term and whether your landlord will engage, both worth establishing early.
What the assessment tells you
Rather than guessing, the free desktop assessment models both routes against your actual consumption and returns indicative figures for each: what a funded agreement would cost per unit against your current tariff, and what buying outright would cost and pay back. You can then compare like with like on your own building.
Figures quoted anywhere on this site are typical rather than promised. Your numbers depend on your roof, your usage pattern and what you currently pay, which is exactly why the assessment exists.
Where Hawthorne fits
We are an introducer rather than a funder or an installer. We assess the site, model both routes and handle the commercial side, then introduce you to an accredited funding and installation partner. There is no cost to you for our involvement, at any stage, and no reason for us to push a route that does not suit your site.
Related reading
- How it works, from first enquiry to switch-on
- Solar for warehouses and distribution centres
- Solar for manufacturing businesses
- Solar for schools and academies
- Solar for care homes
- What is a solar Power Purchase Agreement?
- Common questions about fully funded commercial solar
The first step
A free desktop assessment. We use your site address and a recent electricity bill to model what your roof could produce and what it could be worth. No site visit, no cost, no obligation.
Common questions
Is a fully funded agreement a loan?
No. There is no borrowing and no repayment schedule. You buy the electricity the system generates at an agreed rate. The system belongs to the investor until title passes to you at the end of the term.
Can we buy the system partway through an agreement?
Many agreements include a buy-out provision, though the terms vary by contract. It is one of the things worth asking the funder about directly before signing.
What size does a site need to be for funding to work?
There is a practical minimum below which the fixed costs of a funded agreement stop making sense for the investor. Rather than quote a figure that may not apply to your site, the assessment will tell you which side of the line you fall on, at no cost.
Are there grants available for commercial solar?
Grant availability changes frequently and varies by sector and region, so we would not want to state anything here that may be out of date. Where something applies to your situation it is worth raising on the call.