Solar panel funding: everything you need to know.
As energy prices keep rising and falling and the carbon-reduction targets are becoming stricter, solar energy is quickly becoming the preferred choice of many UK businesses as a tool to lower the cost of doing business and also gain a long-term saving. However, the question that still lingers on before the installation of the solar panels is how are we going to finance this?
This guide will discuss the key sources of finance in commercial solar ventures which include CapEx, Power Purchase Agreement (PPA), Asset Finance and grants available on the solar panels in UK and thus, business people will be able to make the transition to clean energy easily.
Is it possible to be financed on Solar Panels?
Yes – both businesses and individuals can have the solar panels installed with the help of funding. The initial price of solar panels can be made affordable with the help of government-sponsored programs, personal funding, and tax returns. These sources of funds are aimed at stimulating the use of renewable energy, reducing the electricity cost, and decreasing the level of dependence of the UK on fossil fuel.
In case of commercial, the kind of financing that can be offered will be determined by the size of your system, the amount of energy used and the nature of your business.
Who is eligible to get solar panel funding?
The majority of the UK organisations and businesses can qualify, should they:
- House or rent a place where the solar panels can be placed.
- Has sufficient space on the roof or the land to install.
- Daytime demonstrate energy requirement.
- Devoted to lowering the expenses of energy or carbon emissions.
Other grants put a preference on organisations whose sustainability goals or Net Zero targets can be quantified.
There are also several sources of finance available to schools and educational institutions that include solar panel grants UK, commercial finance or PPA, so they can install solar panels on sheds, outbuildings or main buildings without paying huge initial expenses. Solar is also a viable method through which schools can reduce their electricity costs and lead by example in terms of environmental issues to students and the overall community.
Funding Options
Capital Expenditure (CapEx)-Own the System.
In a CapEx model, you will own the solar system. Installation, solar panel kits, as well as commissioning are paid upfront and the resulting electricity is used immediately.
Advantages:
- Complete performance, maintenance, and assets value.
- Typical ROI: 15-25% per annum.
- Payback period: 3-6 years, according to the site profile.
- Annual Investment: Allowance is available and the entire system cost can be claimed against the taxable profits.
- To illustrate, a firm that spends PS300,000 to buy solar panels and battery kits might save much on its corporation tax bill and as such, CapEx would suit profitable businesses that have cash reserves.
- Power Purchase Agreement (PPA) – No initial expense.
- A PPA would enable your business to enjoy the solar energy without solar installation expenses.
How it works:
- The installation and maintenance is funded by a third party investor.
- The generated electricity is purchased by your business at a discounted price (20-40 per cent off grid prices).
- The investor upholds the system but ownership may at times be transferred at the expiry of the contract.
The installation and maintenance is funded by a third party investors
Benefits:
- No capital outlay.
- Short term energy savings with fixed pricing.
- Good to those companies that wish to hold on to cash and at the same time work towards Net Zero.
- Solar panels on flat roofs, solar panels on sheds, or even solar panels in a conservation area can be used with PPA and ensure that a variety of properties can be used to deploy the solar panels.
- Asset Finance: Spread the Cost.
Asset finance: This will enable you to own the system without incurring front-up costs. The cost of installation is financed and your business is repaying it within 5-10 years.
Benefits:
- Immediate possession on a first come basis.
- Foreseeable monthly payments which tend to be subsidized by the energy savings.
- Solar panel packages that are seasonal to peak output in spring and summer.
- Tax relief can be used along with it to maximise financial gains.
The alternative is best applicable to companies that install solar panels and battery packages, solar chargers, or out-building solar panels that save energy that can be utilized at a long distance without excessive initial investment.
Grants and Incentives
Nationally located grant schemes are restricted but locally based grants, and industry based programmes, may be offered:
- Funds or Low Carbon Business Grants- Local council energy efficiency funds.
- The grants are to finance manufacturing, agriculture, or decarbonisation of the public sector.
- Solar panel schools, hospitals, and community UK grants.
- These grants have the potential of making installation cost less or feasibility study cost less.
What Funding Alternative is Best?
- CapEx: Special ROI, tax breaks, total ownership.
- PPA: No initial capital expenditure, no operating charge.
- Asset Finance: Cash flow securities.
- Grants Local or sector-based assistance.
A reliable vendor such as Solar Dreams can simulate all alternatives to portray the estimated benefits, the payback time, and the impact to the environment.
Securing Solar Funding
Solar Dreams assists both large and small businesses in the quest to adopt solar-powered operations– feasibility, design, financing, and operation. Through our competence, organisations are capable of installing the solar panels, battery kits, solar panel optimizers, solar inverters UK and solar chargers in an efficient cost-effective manner.
To have a free comparison of funding or advice on the size of solar panels, the solar panel packages, vehicle solar panels, or garden shed solar panels, call Solar dreams today and start a journey to a sustainable energy savings.
