Finance Overview - UK
This is the simplest and quickest funding option.
The end-client will enter into an agreement with the Bank, whereby the Bank will pay PV Kits for supplying AND installing the system. PV Kits will pay the installer for installing. The end-client will then pay a monthly Lease payment to the Bank for 5-7 years, during which time the Bank owns the equipment. At the end of the Lease period, the Bank will transfer ownership of the equipment to the end-client. Depending on the credit status of the end-client, interest rates for Lease finance range from 4%-8% p.a. (Flat rate).
With Lease finance the end-client benefits from both the free PV electricity generated by the system as well any FiT & export income applicable.
Lease finance is suitable for systems 10kWp and larger.
The approval process for Lease finance typically takes 1-2 weeks, and the end-client will need to provide the Bank with their latest set of accounts and their last 3 months Bank Statements.
2. PPA (Power Purchase Agreement - otherwise known as 'Rent-a-Roof')
This is where a system is supplied and installed at no cost to the end-client; a Bank / Funder will pay PV Kits to supply & install the system, and PV Kits will then pay the installer to install the system.
In return, the end-client will sign a Lease over the roof space / land where the PV array is installed, and also sign a PPA agreeing to buy from the Bank / funder the PV electricity generated by the array. The Bank / Funder will typically charge a minimum of 10% less than the end-client is currently paying for their electricity. The PPA price will increase annually at the rate of inflation. The Bank / funder will also receive any FiT / export income generated by the system.
The end-client will need to either own the site where the PV array is to be installed, or have a Lease on the site with more than 20-25 years to run. In either case, approval will be required from the Mortgagor or Landlord for the PPA / Lease to be registered with Land Registry.
The Lease and PPA will be for a period of 20-25 years. At the end of this period, the end-client will then own the system at no further cost, and will then also receive the PV electricity generated by the system free of charge.
A PPA deal is typically only available for single site systems of 50kWp and above, or multi-site systems of 10kWp and above, with a combined total of 150kWp.
PPA deals can take 1-3 months to process, and will involve the end-client paying legal fees of approx £1000 to their own lawyer for processing the legal documentation required by the Bank / funder.
To process a PPA proposal, we need from the end-client:
a) Their last 12 months electricity bills
b) The Land Registry Title Number for the site where the system is to be installed
Note that these options are available to Housing Associations and Councils for Residential properties, but the Finance Agreement / PPA will be signed by the Housing Association / Council, not the tenants.
Schools have special rules relating to Finance Agreements, but our funders can offer special Agreements that satisfy these Rules.
*For Commercial End-Users (not Residential), Funding is subject to the end-client being satisfactorily Credit Checked by the Bank.