CAPEX vs PPA for Commercial Solar: Which is Right For You?

The short answer

CAPEX delivers the best total return for a profit-making limited company with cash on hand. PPA delivers immediate savings with zero capital outlay for organisations that cannot or will not use cash on solar. Most charities and public-sector organisations choose PPA; most commercial businesses with strong balance sheets choose CAPEX.

Worked example: 250kWp commercial roof

Choose CAPEX if

• You are a profit-making company that can use the Annual Investment Allowance
• You have cash or short-term borrowing capacity at sub-9% rates
• You want the asset on the balance sheet
• You are confident the building will be in your ownership for 8+ years

Choose PPA if

• You are a charity, school, NHS trust or not-for-profit (no corporation tax, so no capital allowance benefit)
• You have no capital to invest or your capital has higher-return alternatives
• You want zero maintenance responsibility
• You want immediate net-positive cashflow from year 1

The third option: Asset Finance

Asset finance / lease bridges the two. Spread the cost over 5-10 years at 6.5-8.2% APR with full ownership at end of term. Tax-deductible monthly payments. Best for cash-conservative businesses that want ownership long-term.

FAQs