Commercial Solar Funding Three Routes, One Recommendation
CapEx purchase, asset finance or fully funded PPA - Caledonia Solar is independent and whole-of-market. We structure the right deal for your business and facilitate placement directly with the most suitable funding partner for your project.
Overview
About Funding Options
For many businesses, the funding structure is more important than the system itself. A poorly structured commercial solar project can tie up capital unnecessarily, create the wrong tax outcome, or leave a business exposed to a lease it cannot exit. Getting the funding right from the start is as important as getting the design right.
Caledonia Solar is independent and whole-of-market. We are not tied to any single funder, and our recommendation is always based on what is right for your project. We work with a panel of specialist commercial solar funders – currently including Octopus Energy, Siemens Financial Services, Ortus Energy (part of SSE) and Soventix – and facilitate funding directly, presenting all three routes transparently, modelling the financial outcomes of each, and making a clear recommendation based on your specific circumstances.
This page explains how each funding model works, who it suits, and what questions to ask before committing.
Key Benefits
Why Funding Options works for commercial sites
Maximum financial return. Full asset ownership from day one.
A CapEx purchase means your business funds the installation directly from capital and owns the solar system as a fixed asset from the day it is commissioned. You benefit from the full value of the electricity generated, capital allowances under the Annual Investment Allowance or Full Expensing, and the long-term appreciation of the building asset. For businesses with available capital and a long-term commitment to their premises, CapEx typically delivers the strongest financial return over a 25-year horizon. The payback period on a well-specified commercial system in Scotland is typically 5 to 8 years, after which the system generates free electricity for the remainder of its operational life. Ownership also means full responsibility for maintenance and performance over the system life.
- Businesses with available capital or strong balance sheet
- Owner-occupiers planning long-term building occupation
- Businesses seeking to maximise capital allowance utilisation
- Larger installations where the long-term return justifies upfront cost
Preserve capital. Typically cash-flow positive from day one.
Asset finance allows your business to fund the full installation cost through a structured finance agreement, typically over 3 to 7 years. The solar asset is used as security for the finance, keeping your existing credit facilities free. Monthly payments are fixed at the outset, giving full cost certainty for the duration of the agreement. For most commercial solar projects in Scotland, the monthly saving on electricity bills exceeds the monthly finance payment from the point the system is commissioned - in many cases making the project cash-flow positive from day one. At the end of the finance term, your business owns the asset outright.
- Businesses that want to preserve working capital or credit facilities
- Businesses where the monthly saving is expected to exceed the finance payment
- Owner-occupiers or long-term leaseholders
- Businesses that want asset ownership at the end of the term
No upfront cost. Immediate savings. No asset ownership required.
A Power Purchase Agreement removes the capital requirement entirely. A specialist third-party funder designs, owns and installs the solar system on your roof at no cost to your business. You enter a long-term agreement - typically 10 to 25 years - to purchase the electricity the system generates at a fixed rate below your current grid tariff. The saving is immediate and guaranteed by contract. You do not own the asset, but you are not responsible for maintenance, insurance or performance risk - these remain with the funder. A PPA is the right structure for businesses where capital preservation is the priority, or where the building owner and the energy user are different entities. The agreed electricity rate may include an annual escalation, which is modelled and presented in full before any agreement is signed.
- Businesses where capital outlay is not possible or not preferred
- Businesses with long leases where landlord consent for installation is available
- Situations where the building owner and occupier are separate parties
- Businesses seeking a guaranteed, contracted energy rate with no maintenance obligations
Three route funding comparison
Every commercial solar project can be structured three ways: outright CapEx purchase, asset finance over 3 to 7 years with fixed monthly payments, or a Power Purchase Agreement where a third party funder owns the asset. Caledonia Solar models all three for every enquiry.
Funding Comparison
CapEx vs Asset Finance vs PPA - at a glance
All figures are indicative only. This table does not constitute financial advice.
Scottish Grants
Grant funding and incentive schemes for commercial solar in Scotland
Scottish businesses may be able to reduce the net cost of a commercial solar installation through grant funding or incentive schemes. Availability changes regularly - schemes open and close throughout the year, and eligibility criteria are revised in line with policy changes.
Scottish Government programme providing free expert advice to businesses on energy efficiency and renewable energy. Can include assessment support and, in some cases, capital grant contribution for qualifying projects.
Scottish Rural Development Programme and successor rural funding schemes may include capital support for renewable energy installations on agricultural holdings.
Some Scottish local authorities and regional bodies offer business energy improvement grants or low-interest loan schemes that may be applicable to commercial solar projects. Availability varies significantly by council area.
Grant information is provided for general guidance only and is subject to change. Caledonia Solar does not administer grant schemes and cannot guarantee eligibility or funding availability.
Funders
The funders we work with
Caledonia Solar is independent and whole-of-market. We are not tied to any single funder and our panel evolves as the market does. We facilitate direct funding placement with the most appropriate specialist funder for each project - no referral fee is added to your project cost. Our current panel includes the following specialist commercial solar funders.
One of the UK's leading energy businesses, with a commercial solar funding arm focused on PPA and asset-backed structures for larger commercial installations.
Specialist asset finance for commercial and industrial renewable energy projects. Strong track record in manufacturing and logistics sector installations.
Commercial solar funding capability developed through Ortus Energy prior to their acquisition by SSE. Full-spectrum funding including PPA, lease and asset finance.
European commercial solar developer and funder with UK project experience across industrial and commercial rooftop installations.
Where a project does not fit the criteria of our existing funder panel, we will say so clearly and advise on alternative routes.
FAQ
Frequently asked questions
What is a solar PPA and how does it work for a commercial business?
A Power Purchase Agreement (PPA) is a long-term contract between a business and a specialist solar funder. The funder designs, installs and owns a solar system on the business's roof at no upfront cost. The business pays a per-unit rate for the electricity the system generates, typically at a rate below the prevailing grid tariff, with savings from day one and no maintenance liability.
Can a business get commercial solar with no upfront cost in Scotland?
Yes. A Power Purchase Agreement (PPA) requires no upfront capital from the business. The solar system is funded, installed and maintained by a third-party funder. The business pays only for the electricity the system generates, typically below grid tariff rates.
How does asset finance work for commercial solar?
Asset finance for commercial solar works similarly to equipment finance. The full installation cost is funded by a specialist finance provider, with the solar asset used as security. The business repays the finance over a fixed term, typically 3 to 7 years, with monthly payments set at the outset for full cost certainty.
What tax benefits are available for a commercial solar purchase in Scotland?
Businesses purchasing commercial solar systems outright can claim capital allowances under the Annual Investment Allowance (AIA) or Full Expensing, subject to current HMRC rules and allowance limits. Specific tax treatment depends on the funding structure and the business's tax position.
What is the difference between a solar lease and a solar PPA?
Under a solar lease, a business rents the solar equipment and pays a fixed monthly lease payment regardless of how much electricity the system generates. Under a Power Purchase Agreement, the business pays only for the electricity the system actually produces, at a per-unit rate. PPAs link cost to consumption; leases do not.
Does the building owner or the tenant fund the solar installation?
This depends on the building tenure and the preferred funding model. For owner-occupiers, all three funding routes are available. For leasehold occupiers, a PPA can be structured with the funder taking the asset risk, subject to landlord consent. Caledonia Solar reviews tenure and consent requirements as part of every initial assessment.
Why Caledonia Solar
Verifiable differentiators, not generic claims
We review your energy consumption, building tenure, financial position and tax circumstances to establish which funding model is likely to be most advantageous for your business.
We produce a comparative financial model showing the 10 and 25-year outcomes under each viable funding route - CapEx, asset finance and PPA where applicable - with indicative figures for each scenario. We present this in a format suitable for internal approval, including board-level review where required.
We identify the most appropriate funder from our panel, prepare the application and manage the process through to credit approval. We do not charge a funding placement fee to your business.
On credit approval, we manage the legal documentation process alongside your solicitor where required, coordinate the finance drawdown with the installation programme, and ensure all compliance obligations are met before the project proceeds.
See Your Funding Options Numbers
Run the savings calculator for an indicative system size, annual generation, and 25 year financial model in under 60 seconds.