caledoniasolar.co.uk/roi-template
Illustrative worked example - figures based on modelled assumptions
Illustrative worked example - figures based on modelled assumptions
Worked Example - Three Funding Routes Compared
What does commercial solar actually return?
This document models a real-world commercial solar installation across all three funding routes - CapEx purchase, Asset Finance, and Solar PPA - using a typical Central Belt warehouse as the example site. The numbers are illustrative but representative of the systems Caledonia Solar designs and delivers. Use the figures as a reference point, then run your own site through our calculator for a model built around your actual consumption, location, and funding preference.
The Example Site - Central Belt Warehouse, G2 Postcode
System size
250 kWp
Roof-mounted, south-facing
Annual consumption
380,000
kWh per year
Current electricity spend
£91,200
At 24p per kWh
Annual solar generation
225,000
kWh per year (est.)
Model assumptions
Self-consumption
82%
Export rate (SEG)
5p / kWh
Tariff escalation
4% per year
Panel degradation
0.5% per year
Finance rate (AF)
6.9% APR
PPA escalation
2% per year
Year 1 and 25-year return by funding route
CapEx Purchase
Full ownership from day one
Year 1 saving
£46,300
50.8% of current annual electricity spend
Installed system cost
£185,000
Simple payback period
4.0 years
Capital allowances (100% AIA)
Available
25-year net return
£1,460,000
CO2 offset over 25 years
1,265 tonnes
Optional O&M SLA available
From year 1
IRR range (pre-tax) - tariff sensitivity
Low
19%
Mid
23%
High
27%
Best long-term return. Suitable where capital is available and the business wants full ownership, depreciation, and maximum 25-year value.
Asset Finance
Ownership over 7 years, no upfront capital
Year 1 net benefit
£12,500
Cash positive from month one
Upfront capital required
£0
Monthly repayment (7 yr)
£2,820
Annual energy saving
£46,300
Annual repayment cost
£33,840
25-year net return
£1,185,000
Ownership transferred
Year 7
Saving vs finance cost - years 1 to 7
Year 1
+£12.5k
Year 4
+£14.1k
Year 7+
Full saving
No capital outlay. Solar saving exceeds repayment from month one. Full ownership and maximum return from year 8. Popular with businesses preserving working capital.
Solar PPA
Zero capital, zero ownership, immediate saving
Year 1 saving
£16,600
Saving grows as grid tariff rises faster than PPA rate
Upfront capital required
£0
PPA electricity rate
15p / kWh
Saving vs grid (Year 1)
9p / kWh
Balance sheet impact
Off balance sheet
25-year cumulative saving
£640,000
System owned by
Funder (PPA provider)
Annual saving trajectory - PPA vs grid escalation
Year 1
£16.6k
Year 10
£26.4k
Year 20
£39.2k
The lowest 25-year return but the simplest entry point. No capital, no maintenance, no G99 complexity. Saving increases every year as the grid tariff rises faster than the contracted PPA rate.
Side-by-side summary
| Metric | CapEx | Asset Finance | Solar PPA |
|---|---|---|---|
| Capital required upfront | £185,000 | £0 | £0 |
| Year 1 saving / net benefit | £46,300 Best | £12,500 | £16,600 |
| Cash positive from | Day 1 | Month 1 | Month 1 |
| Simple payback period | 4.0 years | N/A (no capital) | N/A (no capital) |
| 25-year net return | £1,460,000 Best | £1,185,000 | £640,000 |
| System ownership | Yours from day 1 | Yours from year 7 | Funder throughout |
| Balance sheet treatment | Capital asset | Finance liability | Off balance sheet |
| Capital allowances (100% AIA) | Yes | Yes (via funder) | No (funder claims) |
| Maintenance responsibility | Owner (Caledonia SLA available) | Owner from year 7 | Funder throughout |
Three things to take away from this
01
All three routes are cash positive from day one
Regardless of how you fund it, a correctly sized commercial solar system on a site like this generates more in annual electricity savings than it costs to service - from the first month of operation.
02
The funding route shapes the return, not the project
The solar system is identical in all three scenarios. What changes is who owns it, who bears the capital cost, and how the financial return flows. Caledonia Solar models all three for every enquiry.
03
Your numbers will differ - run your own model
Consumption, location, roof size, and current tariff all change the output. The calculator at caledoniasolar.co.uk models your specific site and produces a side-by-side comparison in under two minutes.
Run the numbers for your site
Enter your annual consumption, location, and roof size into the Caledonia Solar calculator and get a full financial model across all three funding routes - CapEx, Asset Finance, and PPA - in under two minutes. No sign-up required to run the estimate.
Important: All figures in this document are illustrative and based on modelled assumptions for a representative Central Belt warehouse site. Actual returns will vary depending on site location, roof orientation, shading, electricity consumption profile, prevailing tariff rates, finance terms, and DNO grid connection conditions. This document does not constitute a quotation, financial advice, or a commitment by Caledonia Solar Ltd or any associated funder. A site-specific assessment and full financial model will be produced as part of the Caledonia Solar proposal process, at no cost and with no obligation. System costs, tariff rates, and finance terms are subject to change. Capital allowances position should be confirmed with your accountant.