AI overview
There are three common ways to pay for commercial solar: buying outright, an equipment or asset finance arrangement, or a PPA where a third party funds and owns the system and you buy the power. The real difference is who owns the system, because ownership decides who carries maintenance and performance risk, where the incentive certificates land, and what happens if you move premises or sell the business. The tax treatment differs by route, so your accountant is the right person to confirm it for your situation.
Key highlights
- Three routes: pay cash, use equipment or asset finance, or host a PPA and buy the power
- Ownership is the hinge. It decides maintenance, performance risk and where the certificate value lands
- Own the system, own the upkeep. That is true whether you paid cash or financed it
- A PPA moves ownership and upkeep to the provider, and you buy the electricity instead
- Ask what happens if you move premises before you sign, not after
- The tax treatment differs by route. Your accountant confirms that, not your installer
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Most commercial solar conversations start with the system and end with the money. It is usually worth doing in the other order.
There are three common ways a business pays for solar, and they are not three versions of the same deal. They differ in who owns the system, who fixes it, and what happens when your situation changes.
This is a comparison of the routes, not a price list. We have not put a repayment figure anywhere in it, and the last section explains why.
The three routes, and what actually separates them
Almost every commercial solar deal in Australia is one of three things. You buy the system, you finance it, or someone else owns it and sells you the power.
Brochures compare these on upfront cost, which is the least interesting difference. The one that matters is ownership, because everything else hangs off it.
Own the system and you own its output, its maintenance, its warranty claims and its resale value. Do not own it, and all of that sits with whoever does.
One thing we will keep repeating: how each route is treated for tax and accounting is different, and it depends on your business as much as on the deal. Your accountant answers that, not your solar installer.
The routes we can arrange are set out on our finance page. What follows is how to tell them apart.
- Cash: you own the system from day one
- Equipment or asset finance: a lender funds the purchase and you are on a path to owning it
- PPA: a third party funds, owns and maintains the system, and you buy the power it makes
Paying cash outright
Buying the system is the simplest arrangement and usually the cheapest across its life. There is no third party taking a margin for carrying the money.
You also take on everything that comes with ownership. If an inverter fails in year seven, chasing the warranty is your job, and the lost generation is your loss until it is sorted.
The incentive certificates flow to you, normally as a discount applied before you pay. We have covered solar incentives for Gold Coast businesses separately rather than repeating it here.
The real cost of paying cash is not the price. It is what else that capital could have done in the business over the same years, and only you can weigh that.
Equipment and asset finance
Finance keeps you on the ownership path but spreads the cost over time. That is why most businesses that want to own a system end up here rather than writing a cheque.
The shapes vary more than people expect. Some arrangements have you own the asset from the start with the lender holding security over it, some transfer ownership at the end of the term, and some sit closer to a rental with a decision to make at the finish.
That end point is the part to pin down before you sign. Ask plainly what you own on the last day of the term, and what it costs to get there.
Maintenance stays with you under every version of this. Financing the purchase does not finance the upkeep, and that catches people out.
The structures also differ for depreciation, GST and deductions. Two arrangements can look identical on the summary page and land differently on your return, which is exactly why this is your accountant's call and not ours.
- Confirm who legally owns the system during the term, and who owns it at the end
- Confirm whether the certificate value is applied to the purchase price or handled separately
- Confirm whether the system alone is the security, or your wider business is
- Confirm what happens to the agreement if you sell the business or the building
A PPA, in short
Under a power purchase agreement a third party funds, installs, owns and maintains the system on your roof. You are not buying hardware. You are buying the electricity it makes, at a rate agreed up front.
That shifts maintenance and performance risk off your plate, because the party being paid for the power is the party who has to keep it generating.
The trade is the long run. You do not capture every kilowatt for free after the system has paid for itself, because you never owned the thing making them.
There is a full guide to how PPAs work, what to check in the terms and who they suit, and the service itself is on our commercial solar PPA page.
What happens if you move premises
This is the question that gets asked last and should be asked first. A solar system is bolted to a building, and plenty of businesses do not stay in the same building forever.
If you own the system outright, moving means selling or leaving an asset attached to a roof you no longer occupy. If you lease, the answer depends on what your lease says about fixtures, improvements and make-good.
Under a finance arrangement the debt does not move just because you do. Under a PPA there is usually an assignment or exit path written in, but usually is not the same as yours, so read the clause.
None of this is a reason to avoid solar. It is a reason to know the answer in advance, particularly if your lease has fewer years left than the system is expected to run.
What we will not tell you, and why
There is not a single repayment figure, interest rate or term in this article, and there will not be one in a first conversation either.
Anyone quoting you a typical monthly repayment before seeing your bills and your roof is guessing.
The system size follows your usage, the price follows the system, and the finance follows the price. Working backwards from a headline number gets all three wrong, and the correction always arrives after you have made the decision.
The same goes for tax. We can tell you how a route is normally structured. We cannot tell you what it does to your return, and an installer who answers that confidently should worry you.
What you can ask for is the working. The system, the assumptions, the ownership at each stage, in writing, so you can hand it to someone who is qualified to check it.
- What is this system size based on, and which of my bills did you use to get there?
- Who owns the system during the term, and who owns it at the end?
- Is the certificate value already in this price, and what if the market moves before install?
- What are my options if I move premises, sell the business, or the building changes hands?
- Who is responsible for maintenance, monitoring and warranty claims, and for how long?
- Can I have all of that in writing so my accountant can look at it?
Frequently asked questions
What are my options for financing commercial solar?+
Three, broadly. You can buy the system outright, use an equipment or asset finance arrangement to spread the cost while working toward owning it, or host a power purchase agreement where a third party owns the system and you simply buy the power it produces.
Is a commercial solar loan better than a PPA?+
Neither is better in the abstract. Finance suits a business that wants to own the asset and is willing to carry maintenance and warranty claims. A PPA suits one that wants the savings without owning or maintaining anything. Cash flow and appetite for upkeep decide it.
Who maintains the system if I finance it?+
You do. Finance pays for the purchase, not the upkeep, so monitoring, cleaning, faults and warranty claims stay with you as the owner. That is the clearest practical difference between a finance arrangement and a PPA, where the provider carries the system and its performance.
What happens to my solar if I move premises?+
It depends on the route and on your lease. An owned system is a fixture on a building you are leaving. A finance agreement stays with you regardless of where you trade. A PPA is usually written with an assignment or exit path. Get the answer in writing first.
Do I still get the incentive certificates if I finance the system?+
Yes, where you are the owner. The certificate value normally comes off the purchase price, and the finance is applied to the price after that. Under a PPA the provider owns the system and claims them, which is already reflected in the rate you are offered.
Can you tell me how solar will affect my tax?+
No, and be wary of anyone who will. The treatment for depreciation, GST and deductions differs between buying, financing and a PPA, and it depends on your business structure. We will put the arrangement in writing so your accountant can answer it properly.
