Understanding your solar funding options.  

So, you’ve asked yourself these 5 questions and decided that on-site solar is what you need for your business. But how will you pay for it?

In this article, we will break down the two main options: self-funded and funded systems.

Self-Funded: Up front capex

This is exactly what it sounds like. Your business pays for the entire solar PV system upfront, just as you would for any other capital expenditure. Once the installation is complete, you own the asset outright.   

The benefits?

  • Full ownership: You own the system and reap all the financial benefits, including the value of the generated electricity and any export tariffs. 
  • Potential for higher returns: over the long-term, your savings are likely to be greater than any other funded model. The payback period is likely to be c. 5-7 years depending on your cost of capital and your existing energy price. Your ongoing costs will include operations and maintenance costs and parts replacement, but you’ll be receiving free energy for potentially up to 40% of your energy requirements. 

What to consider?

  • Significant upfront capital: This is the main hurdle. A system can run into the hundreds of thousands, or even millions, of pounds. 
  • Responsibility: You’re responsible for all the ongoing maintenance, repairs, and performance monitoring. You’ll need to either manage this in-house or hire a third party to ensure the system is running at optimal efficiency. 

Funded: The Power Purchase Agreement (PPA)

If a large capital outlay isn’t on the cards, a PPA offers a different approach. With a PPA, a third-party company (like Two Blues Solar) funds, installs and owns the system on your roof (or land or car park), then sells the electricity generated back to you at a pre-agreed, fixed price.  

Why choose this option?

  • Zero upfront cost: You get a full solar installation with no capital expenditure. This frees up funds for other business priorities.
  • Immediate savings: The price you pay for solar-generated electricity is often significantly lower than your grid rate from day one.
  • Hassle-free: The PPA provider takes care of everything from design and installation to ongoing maintenance and insurance. It’s a true set-and-forget solution.

Which is right for you? 

The best choice depends on what your business wants to achieve. To help you decide, here’s a quick overview of the key differences:

  • If you have spare capital and want to maximise your long-term return on investment, self-funding could be the way to go. 
  • If you’re keen to go solar and lock in energy savings without using up your capital budget, a PPA might be the better option. PPAs aren’t the only funded option available but they can be a great option for owner occupiers, landlords or tenants that are using 500,000 kWh/year or more at one or more of their sites.   

How Two Blues Solar can help. 

The decision between funding and self-funding system is a significant one, but it’s only the first step. Regardless of what you choose, Two Blues can help you navigate the entire journey.

Two Blues is often asked for consultancy support by clients who wish to self-fund projects. The benefit for clients is that it helps them roll out solar more rapidly, with far less internal resource and, most importantly, allows them to bring on board the solar expertise that ensures a high-quality, optimally sized, and safely installed system.

Recently, we worked closely with Outcomes First Group, a large UK schools group, to oversee the whole process of installing solar across 4 of their sites, within a very tight four-week window. Read more about this project here.