Three ways to fund a commercial solar installation. One clear comparison. Download the guide used by Scottish CFOs and operations directors to structure their solar investment decision.
Three ways to fund a commercial solar installation. One clear comparison. Download the guide used by Scottish CFOs and operations directors to structure their solar investment decision.
WHAT’S INSIDE (BULLET LIST)
How CapEx purchase works — and who it suits
How asset finance works — and the cash-flow case
How a Power Purchase Agreement works — including escalation explained
Side-by-side comparison across 10 financial and structural criteria
Scottish grant schemes currently available — and how to access them
The four specialist funders Caledonia Solar works with directly
Five questions to ask any solar company about their funding capability
No spam. No sales calls unless you request one. Your details are used only to deliver the guide and, where you have indicated interest, to follow up with a tailored funding assessment.
The following is the full content of the downloadable PDF. Written to be read independently of the website. Branded as Caledonia Solar. Produced as a PDF using the PDF skill in a separate production step.
For most Scottish businesses considering commercial solar, the funding structure is more important than the system itself. A poorly structured project can tie up capital unnecessarily, create the wrong tax outcome, or leave a business locked into a commitment that does not suit its circumstances. Getting the funding right from the outset is as important as getting the design right.
This guide explains the three funding routes available for commercial solar in Scotland, compares them across the criteria that matter most to commercial decision-makers, and summarises the current Scottish grant landscape. It is written for MDs, CFOs and operations directors who want to understand the options before entering a conversation with any solar company.
CAPEX PURCHASE — HOW IT WORKS
A CapEx purchase means your business funds the full installation cost directly from capital and owns the solar system as a fixed asset from the day it is commissioned. You receive the full benefit of the electricity generated, capital allowances under the Annual Investment Allowance or Full Expensing, and the long-term return on a 25-year asset.
Best suited to: businesses with available capital or strong balance sheet, owner-occupiers planning long-term occupation, businesses seeking to maximise capital allowance utilisation.
Consider carefully if: your lease has fewer than 10 years remaining, capital is better deployed in core business activity, or you prefer to keep the solar asset off the balance sheet.
Indicative financial profile: typical payback 5–8 years at current electricity tariffs. 25-year return of 2–3x original investment for well-specified industrial installations. Maintenance responsibility: building owner.
ASSET FINANCE — HOW IT WORKS
Asset finance allows your business to fund the full installation cost through a structured finance agreement, typically over 3–7 years. The solar asset is used as security for the finance. Monthly payments are fixed at the outset, giving full cost certainty. At the end of the finance term, your business owns the asset outright.
Best suited to: businesses that want to preserve working capital or credit facilities, owner-occupiers or long-term leaseholders, businesses where the monthly saving is expected to exceed the finance payment.
Indicative financial profile: for most commercial systems at current electricity tariffs and finance rates, the monthly saving on electricity bills exceeds the monthly finance payment — in many cases making the project cash-flow positive from day one. Maintenance responsibility: building owner.
POWER PURCHASE AGREEMENT — HOW IT WORKS
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 10–25 years — to purchase the electricity generated at a fixed rate below your current grid tariff. The saving is immediate and contractually guaranteed.
PPA rate escalation: most PPAs include an annual escalation clause, typically 2–3% per year. A well-structured PPA maintains a positive saving against the grid rate throughout the term. The full escalation schedule is presented before any agreement is signed.
Best suited to: businesses where capital outlay is not possible or preferred, leasehold occupiers, situations where the building owner and occupier are separate parties.
Indicative financial profile: zero capital outlay. Immediate saving from day one. No maintenance obligation. No asset ownership at end of term unless a purchase option is exercised.