As more UK businesses seek sustainable ways to cut costs and reduce their carbon footprint, solar power is emerging as a key solution. But for many industrial organisations, the biggest question isn’t just about installing solar panels – it’s how to finance them. The good news? There are now a range of grants, incentives, and flexible financing options designed to make solar more accessible than ever before.
The Cost of Doing Nothing
With electricity prices rising and increasing pressure to meet Net Zero goals, delaying a switch to solar could cost your business more in the long term. Generating your own clean energy can dramatically reduce operational costs, protect against future tariff increases, and help your business meet Environmental, Social and Governance (ESG) commitments.
Smart Export Guarantee (SEG)
One of the key incentives available in the UK is the Smart Export Guarantee (SEG). This scheme allows businesses generating excess electricity through solar PV to sell it back to the National Grid. Your energy supplier will pay you for every unit you export, creating a steady revenue stream to help offset installation costs and speed up return on investment.
Capital Allowances and Tax Relief
Under the Annual Investment Allowance (AIA), businesses can claim 100% tax relief on qualifying capital expenditure, including solar PV systems. This means the full cost of the system can be deducted from your taxable profits in the year of purchase, improving cash flow and reducing upfront cost impact.
There’s also the Super-Deduction scheme (available until March 2023) which offered 130% capital allowances on qualifying plant and machinery investments. While this may no longer apply, updated tax incentives may still be available depending on your timing and financial year.
Power Purchase Agreements (PPAs)
If you want to benefit from solar without the upfront capital investment, a Power Purchase Agreement might be the answer. Under a PPA, a third-party investor installs and maintains the solar system on your site. You agree to buy the electricity generated at a reduced rate, typically much lower than grid prices. This approach delivers instant savings with no capital outlay.
Green Business Loans and Asset Finance
Many UK lenders now offer green business loans and asset finance solutions specifically for renewable energy projects. These are structured to match the payback profile of solar, often with low interest rates and flexible terms. This allows you to spread the cost of installation while benefiting from immediate energy savings.
Tailored Payback Models
Every business is different, which is why trusted providers like MCE Renewables offer bespoke payback models tailored to your site, energy usage, and budget. From lease-to-own agreements to blended finance packages, we help you structure a plan that delivers results without disrupting your cash flow.
