ROOF MOUNT SOLAR PV – FINANCING OPTIONS FOR BUSINESSES

In the last few years there has been a big focus on large-scale subsidy free solar, but many see rooftop solar as a largely untapped sector in helping the UK reach its renewable energy targets.

Recent analysis by CPRE shows that if only a quarter of the UK’s total 250,000 hectares of south-facing commercial roof space was useable, it could generate 25GW of electricity annually.

Rooftop solar deployment has been on the rise in 2022 for several reasons including the significant rise in electricity prices along with companies coming under increasing pressure to have a sustainability and net zero strategy. 

Official planning regulations updated in April 2015 means that most non-domestic solar installations under 1MW are classed as permitted development as long as certain conditions are met. Not all roof spaces are suitable for solar, but it is worth every business considering it as an option due to the short timescale involved to install. 

There are several options available for financing commercial solar PV rooftop schemes including:

• Self-finance option – this option allows you to purchase the solar PV equipment yourself which means the asset is fully owned by you and you benefit from the best financial returns over the lifetime of the system. Solar panel costs are currently around £800-£1,000/kW which means a 200kW solar PV system, for example, costs £160,000 - £200,000. Other costs to factor in are annual Operation and Maintenance (O&M), insurance costs and business rates. If a scheme is sized to offset the optimum level of on-site usage, then the payback can be as low as four years.
  
  
• Power Purchase Agreement finance option – this option involves sourcing a partner (of which there are now many in the market) who will finance the panels and install them on your roof. In exchange for leasing the roof to the third party, they connect the panels to your electricity supply and sell the power generated for you to use on site via a Power Purchase Agreement (PPA). The agreed p/kWh within the PPA would be lower than your current electricity contracted rate and the third party would insure, operate and maintain the PV system for the full term of the lease agreement which could be up to 30 years. 
  
  
• Solar panel leasing option – similar to the above, this option involves sourcing a partner who will finance and install the PV panels on to your roof and connect them to your electricity supply. Instead of a PPA, you would pay a monthly fixed lease payment which is calculated using the estimated production of the PV system in exchange for the right to use the PV system. The fixed payment would also include maintenance of the system.
  
  
• Asset Finance option – there a several financial institutions offering finance for a wide range of renewable energy assets including solar PV.  Once finance was secured, the PV panels would be installed and connected to your electricity supply so that the generated electricity can be used on-site by you. The asset finance payments could be less than the savings from the PV panels meaning you could be cash positive from day one.

   

We can work with your business to find the best option for you. Please contact Helen Moffat in the Energy team on helen.moffat@carterjonas.co.uk if you would like to discuss this further.

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