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Commercial Solar Finance UK · Independent
Q&A · Monthly payment routes

Pay monthly commercial solar — UK 2026 finance options

Five UK commercial solar finance structures convert capex into monthly payments — green loan, finance lease, operating lease, asset finance hire purchase, and PPA. They deliver different combinations of monthly cost, contract length, ownership outcome, and tax allowance capture. The best monthly-pay route depends on which trade-off you prefer.

Monthly payment comparison (£200k system)

StructureMonthlyTermTotal costOwn at end?
Asset finance HP£3,1537 years£264,852Yes
Green loan (mainstream)£3,0197 years£253,596Yes
Finance lease£2,7778 years£266,592Yes (option)
Operating lease£2,9408 years£282,240No (option)
PPA (per consumed kWh)~£2,37520-25 years~£600-720kSometimes

Lower monthly payment = longer total commitment + higher lifetime cost. PPA has the lowest variable monthly but the longest contract horizon. Green loan has competitive rate and ownership preserved at term end.

Net monthly position after savings

Monthly payment alone is misleading. Net monthly position factors in electricity savings the system generates:

StructureMonthly costMonthly savingsNet monthly
Asset finance HP-£3,153+£3,617+£464
Green loan-£3,019+£3,617+£598
Finance lease-£2,777+£3,617+£840
Operating lease-£2,940+£3,617+£677
PPA-£2,375+£3,617 (avoided cost)+£1,242 (effective)

All five structures are net cash positive from month 1 on a typical 250 kWp system. Monthly savings (£3,617) exceed monthly payments across all structures. PPA appears most positive month-to-month because no payment outflow exceeds avoided cost — but lifetime cost is highest.

Related questions

Which monthly-pay structure is fastest to set up?
Asset finance hire purchase — typically 24-72 hours indicative decision, 7-10 days to credit committee, 14-21 days to drawdown. Green loan: 4-8 weeks for established customers, 6-10 weeks for first-time. PPA: 6-12 weeks contract negotiation. Operating lease: 4-8 weeks. For year-end FYA capture pressure, asset finance is the answer.
Can I get longer terms for lower monthly payments?
Asset finance and green loans typically max at 10 years. Finance lease and operating lease typically 8 years. PPA goes to 20-25 years which gives lowest monthly but longest commitment. Longer terms = lower monthly but higher total cost. The 7-10 year range is the sweet spot for most commercial solar projects.
What happens to the monthly payment if interest rates change?
Most commercial solar finance is fixed-rate at origination — your monthly payment stays the same throughout the term regardless of base rate movements. Some lenders offer floating-rate facilities (rare for commercial solar); these track Bank of England base + margin. Default to fixed-rate unless you have a specific reason for floating.
Is the monthly payment tax-deductible?
Yes for green loan (interest portion), finance lease (full payment), operating lease (full payment), PPA (full payment as electricity opex). Asset finance HP: interest portion deductible, capital portion isn't. All these treatments reduce taxable profits.
Which monthly-pay route is best for charities?
PPA structure works best for charities because charities can't use the FYA tax allowances anyway. PPA developer prices around the no-FYA position. Trading-subsidiary green loan / asset finance also viable where charity has trading subsidiary structure.

Continue reading

Asset finance / hire purchase

Fastest decision speed for monthly-pay commercial solar.

Green loans

Lowest rate for monthly-pay structures with ownership preserved.

PPA

Lowest variable monthly for the longest commitment.

Want this applied to your specific situation?

We model the relevant finance structures against your project numbers. Five working days from enquiry to indicative comparison across capital purchase, green loan, lease, and PPA.

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