How To Offer Finance For Commercial Solar Installations

What customer finance really means at the point of sale

Offering finance for commercial solar lets your customers say “yes” based on affordable monthly payments rather than a large upfront invoice. In practice, you are giving buyers more than a payment method: you are giving them choice over ownership, tax position, cash flow, and risk. In the UK market, commercial solar can be funded through outright purchase, asset finance, operating leases, and increasingly through power purchase agreements (PPAs) that reduce or remove upfront capex. That range matters because not every business wants the same balance sheet outcome, even when they all want lower energy costs.

Standout line: Finance turns solar from a capital project into a commercial decision.

Why finance is so commonly used in commercial solar

Commercial solar is attractive because the numbers are now easier to defend. Typical UK business electricity prices in early 2026 have been around 20-29p/kWh, while the levelised cost of on-site solar generation is often cited at roughly 5-8p/kWh, creating a clear savings gap that can be modelled from day one. Yet many firms still prefer to preserve working capital for stock, staff, and growth, especially when projects can run into five or six figures. Finance also helps align payments with benefit, because the system’s savings arrive monthly, while a cash purchase hits once. With typical payback benchmarks often landing around 5-7 years, buyers naturally look for funding structures that feel proportionate to that window.

How offering finance can lift conversion and average order value

When you present solar as “from £X per month”, you lower the psychological barrier and shorten the time from interest to commitment. Finance also reduces procurement friction: stakeholders can compare monthly payments against projected energy savings, rather than debating a large capex request. In many deals, finance expands system size, because the customer can include extras like battery storage, monitoring, or roof works while keeping payments within an agreed budget. A growing menu of routes, including low or zero-upfront PPAs and leases, gives you options for customers who want the savings without the ownership responsibilities.

Standout line: The best finance offers do not just fund the system, they fund the decision.

Typical transaction values in the UK market

What you can offer finance on

1. Rooftop solar PV design and installation

2. Inverters, optimisers, and monitoring platforms

3. Battery storage systems

4. EV charger installation bundled with solar

5. Roof reinforcement, access equipment, and enabling works (where eligible)

6. Smart energy management and controls

7. Ongoing maintenance packages (in some structures)

FCA and compliance essentials you must get right

If you introduce finance, you need to be clear whether you are acting as an appointed representative, an introducer, or carrying out regulated credit broking. Keep promotions fair, clear, and not misleading, and ensure any representative examples are accurate and based on available products. Avoid implying guaranteed acceptance, and do not pressure customers to choose finance. Treat customer data carefully, use transparent consent, and ensure affordability and suitability checks are handled by the lender or broker where required.

How introducer and broker models typically work

Most installers and retailers do not want the operational burden of underwriting, lender relationships, and regulatory process. That is where an introducer model can make sense: you introduce your customer to a finance broker, the broker sources suitable lenders and products, and the customer completes the application journey with the right checks in place. A broker-led approach also gives you a wider toolkit than a single lender, which matters in solar because customers have different priorities: ownership versus off-balance-sheet treatment, term length, and appetite for zero-upfront routes such as PPAs. As PPAs become more productised, with shorter terms and standardised credit checks, it becomes easier to present them alongside more traditional asset finance as part of one coherent offer.

What the customer journey should look like

1. Qualify the opportunity: confirm site type, rough consumption profile, and decision-maker timeline.

2. Present two ways to buy: show a cash option and at least one monthly-payment option.

3. Sense-check savings: compare forecast on-site generation cost against current grid rates to frame the value.

4. Choose a structure: hire purchase for ownership, lease for lower upfront, or PPA for zero or low capex.

5. Collect key details: business name, address, time trading, basic financial indicators, and consent to proceed.

6. Submit the finance application: the broker/lender runs credit and compliance checks.

7. Receive decision and terms: confirm deposit (if any), term length, and documentation requirements.

8. Sign agreements: ensure the customer understands responsibilities, maintenance, and what happens at end of term.

9. Install and commission: align installation milestones with any staged funding requirements.

10. Aftercare and reporting: provide monitoring access and a simple performance summary to reinforce value.

Getting started with Kandoo

Kandoo is a UK-based retail finance broker, so our role is to help you add finance without turning your business into a finance department. We work with you to define a finance proposition that matches how you sell, from the way monthly figures are displayed to how leads are handed over and updated. We can help you offer a sensible spread of options, including routes that suit customers seeking low upfront costs, and we will support a customer journey that is clear, compliant, and built for conversion. The aim is simple: make finance feel like a natural part of buying solar, not a separate process that slows the sale.

Next steps you can take this week

• Review your last 20 proposals and identify how many stalled due to budget or payback concerns.

• Decide what you want to lead with: “own the asset” (hire purchase) or “save with minimal upfront” (lease/PPA).

• Prepare a one-page savings-and-payments view that your sales team can explain in under two minutes.

FAQs

What finance options should I offer first?

Start with one ownership route (commonly hire purchase) and one low-upfront route (often a lease or a PPA). That covers most buyer preferences without overwhelming the sales conversation.

Are PPAs only for large corporates?

No. PPAs have become more accessible, with more standardised credit checks and shorter, product-style structures expanding suitability for smaller and mid-sized organisations.

How do tax incentives affect the finance conversation?

For buyers who purchase or finance ownership, tax relief can materially improve the business case. The Annual Investment Allowance can provide 100% first-year relief on qualifying spend up to £1 million, and larger projects may access other first-year allowances. There is also a business rates exemption for rooftop solar until 2035, which can improve project economics.

Is on-site solar genuinely cheaper than grid electricity?

Often, yes. Market reporting in early 2026 commonly puts UK business electricity around 20-29p/kWh, while on-site solar levelised costs are frequently modelled at roughly 5-8p/kWh, creating a meaningful savings gap when the system is well specified.

What payback period should I set expectations around?

A realistic benchmark is often 5-7 years for commercial installations, influenced by system sizing, export value, tax treatment, and any applicable exemptions or incentives.

Can I bundle batteries and EV chargers into finance?

In many cases, yes. Bundling can improve the customer outcome when it increases self-consumption, resilience, or operational savings, and it can also raise average order value while keeping monthly payments manageable.

Will offering finance slow down my sales process?

Not if the journey is designed properly. The key is having a clear handover, fast credit decisioning, and proposal templates that show cash and monthly options side by side.

Do I need FCA authorisation to introduce finance?

It depends on your role and what you say to customers. Some activities are regulated, and the safest approach is to work through an appropriate model where compliance responsibilities are correctly allocated and promotions are controlled.

How should I position finance to avoid mis-selling?

Focus on clarity: total amount payable, term length, what is and is not included (maintenance, monitoring, end-of-term options), and the difference between owning an asset and buying electricity under a PPA.