Newsroom Your options
Buy, lease or PPA: which way should your business pay for solar?
Buy if you have spare cash and want the tax deduction. Lease if you want to own it in the end without paying up front. Choose a PPA if you want lower power bills with no money down and no maintenance risk.
What are the three ways to pay for business solar?
- Buy it. You pay for the system, in cash or with a loan, and you own it from day one.
- Lease it. You pay a fixed monthly rental for the equipment, and often own it at the end.
- Sign a PPA. A provider owns the system and you buy the power it makes, at a rate below your current tariff.
How do they compare?
| Buy | Lease | PPA | |
|---|---|---|---|
| Upfront cost | Full price | None or low | None |
| Who owns it | You | The lessor, then often you | The provider |
| Repairs and insurance | You | Usually you | The provider |
| What you pay | The system, then nothing for the power | A fixed rental, whatever it makes | Only the power it makes |
| Section 12B deduction | Yes, for you | No | Claimed by the provider |
| On your balance sheet | Yes | Often | No |
Can my business still claim Section 12B for solar?
Yes, if you buy the system. Section 12B is permanent. For solar systems up to 1 MW it gives a 100% deduction in the first year. Bigger systems are written off 50%, 30% and 20% over three years (source).
The extra 125% deduction ended on 28 February 2025 and was not renewed (source).
With a lease, the relief generally does not apply to you, because you only own the asset after it is already in use (source). With a PPA, the provider claims 12B, and your PPA payments are fully tax-deductible as an operating cost (source).
Tax depends on your company's position. Check with your accountant before you decide on tax grounds.
When is buying the better choice?
When you have cash you do not need elsewhere, a strong tax bill to deduct against, and someone on site who can look after the system. You keep all the savings once it has paid for itself, but it takes years to get there, and every repair and inverter replacement is yours.
When is a PPA the better choice?
When you would rather keep your cash working in the business. You pay nothing up front, your bill drops from the month the system switches on, and the risk that it underperforms sits with the provider, not you.
Read how a solar PPA works, or book a free site assessment to see all three options priced on your own bills.
