Solar Panels Financing: For Companies and Individuals

Using renewable energy not only allows us to ace rising energy prices but also plays a major role in protecting the environment

Solar panels are widely used to convert solar energy into electricity. In this article, I am here with a detailed guide on solar panels financing options. 

Whether you are an individual or a company, if you want to cut the costs for energy consumption, laying the panels on the roof and combining the storage batteries with them can save you up to 90%. 

Related: Solar Energy Storage Options

But how much does it cost to install a system of this type? 

Less than you think: In the market, you will find several Solar Panels financing options. 

Let’s find out together.

5 Ways of Financing Solar Panels

In this post, I have explained 5 ways in which you can do solar panels financing. Some of them are best for individuals & small businesses while others seems best for big & multi-national corporations.

Here’s the #1:


1. Immediate Purchase

Immediate purchase, or full equity, is the solution mostly adopted by individuals and families.

A residential type system has a quite low capacity, and therefore costs less, which can often be covered with one’s savings, without having to subscribe to mortgages or loans.

Immediate Purchase - #1 Solar Panels Financing Option

Companies can also buy panels, inverters, and storage batteries out of their own pockets, as long as they have the necessary resources available. It is important to carefully evaluate this solution, to prevent it from putting the company’s balance sheet in crisis.

  • In both cases there is a possibility to reduce expenses, taking advantage of concessions and incentives that allow lowering the initial costs. 
  • For individuals, there is a tax deduction of 50% on the gross IRPEF tax for 10 years and the assignment of credit to the supplier/installer company (which will boast a tax credit towards the State). Thanks to the discount on the invoice introduced with the Growth Decree.
  • For companies, however, there are interesting formulas such as 130% super amortization.


You are the immediate owner of the solar power system and the only beneficiary of the economic advantages related to saving on energy consumption. 

In particular, companies that can pay the system with their funds immediately can benefit from lower taxes and reduce profits, without having to incur bank debt or pay interest on installments.


For some, the immediate outlay of money can be challenging, burdening the family or company budget.


2. Mortgage

If you do not have the financial resources immediately available to purchase a solar panels system or you prefer a solution to be paid “in installments”, you can opt for a mortgage or a lease. These are two different investment strategies: let’s see together how they differ.

Mortgage Agreement

A mortgage is a cash loan from a bank. That is, the credit institution lends you the money to be able to buy the most suitable solar panel system for your home or business. 

And then, you return it in installments with a monthly fee that varies based on the amount that you have been financed plus interest. 

The bank is unlikely to finance you 100% of the amount you need. A 70-30 ratio is easier to follow: 70% is loaned to you by the bank, 30% is paid by you.

If you already have a trusted bank, with which you have good relations, you can try to apply for a mortgage. However, make sure that the institute has already developed financing tools for renewable energy, to avoid long waiting times for due diligence operations.


You don’t have to pay everything right away, but you can rely on a bank that lends you the money and you return it to them with a monthly fee. 

Furthermore, you can deduct part of the expenses with a payback ratio of 9% over 10 years. For companies, the possibility of 130% super amortization is always valid.


You still have to pay an advance on the financing percentage: for private individuals, it is usually 15-20% while for companies it can reach 30%. Furthermore, the amount that is paid out on loan does not include management and maintenance costs, which are all at your expense.

3. Leasing

Leasing is in some aspects similar to a mortgage, but it is an option reserved only for companies or in any case for VAT numbers. 

There is always a lender that lends you the money. In this case, it is possible to obtain the financing of 100% of the expense.

However, the owner of the plant has a choice to assist the leasing company or buy a solar plant in subsidy. 

At the end of the contract, however, you can decide to redeem the plant and become the owner in all respects.


Also, in this case, there is no immediate outlay of money and the amortization is more convenient because the coefficient is higher than the mortgage. 

Also, the payback times are faster, so if you don’t want to expand your payback times too much, then, this is the ideal solution.


Compared to the mortgage it is a bit more expensive: consider a 5-10% more expensive on every single installment. 

You must therefore do a careful search to find the right company that specializes in this type of practice.

As with full equity, these three forms of investment also involve the purchase of the plant. 

They are therefore recommended for those who have great energy needs, with high and daily consumption. 

For example, a family or a company with many machines running for many hours a day.

4.Operational Rental

Another option is operational leasing, a kind of long-term lease that can be applied to multiple capital goods, including solar panels. 

This is a particularly suitable solution for those who have not particularly high electricity consumption, mainly concentrated on working days to be interrupted on weekends and holidays. 

So it is the ideal investment for companies that work Monday to Friday with office hours.

To understand how it works, it is first of all necessary to make a distinction between industrial and financial operating leasing.

With the industrial operating rental, it is the supplier of the plant itself (often an ESCo – Energy Service Company) to finance the work. 

The company, in addition to offering you the solar power system that best suits your needs, also takes care of the maintenance of all the components during the design phase. 

Along with that, it also makes a precise analysis of your consumption to optimize energy management.


The financial operating rental, on the other hand, involves 3 different figures:

User: who chooses and uses the good.

Grantor: who finances the purchase and is the actual owner.

Supplier: who installs the components and supplies the system.

The user pays the grantor a monthly fee to use the system. 

The amount is fixed and is established during the signing of the contract, based on the savings that you can obtain by exploiting the energy produced by Solar Panels.


You have no additional costs, in addition to the fee, because the maintenance of the system is the responsibility of the renter. 

The Industrial Operative Rental is a solar panels financing strategy recommended because it does not affect the debt.


The fee is higher than the mortgage and leasing installments, precisely because it also includes plant maintenance. 

It is therefore important to evaluate the convenience of the operation, to avoid the costs that are no more taxing than the savings brought by the use of renewables. 

5. PPA – Power Purchase Agreement

Among the solar panels financing options, the PPA is the least widespread – not so much because it is not convenient but because to date, there are no clear regulations that define the terms. 

PPW : Solar Panels Financing Method for huge Corporations

What is the Power Purchase Agreement? 

It is a long-term contract, usually 10 years, where one of the two parties agrees to purchase energy from a single owner of a solar panels system in operation, at a fixed price per kWh.

It is therefore a particularly suitable solution for large energy-intensive companies that want to avoid the continuous fluctuations in the price of electricity.

Unfortunately, there is still no law that allows the development of this financing formula which, at present, is only bilateral. 

The energy that is produced by a plant managed in PPA can therefore be sold to a single company, and not to entire industrial centers. 


The energy pricing is fixed. Thus, it is best for large corporations who want to avoid fluctuating energy prices.


There are no clear regulations that define the terms of the power purchase agreement.

Related: Guide to Solar Panel Recycling


In this post, I have explained some of the top solar panels financing options. As an individual, it is always best to make an immediate purchase.

For corporations, it depends on the size of the company. By taking advice from your financial advisor you can choose the one that best fits you.

I hope this post will help you find the best solar panel financing option for you. You can appreciate our efforts by sharing them with your loved ones.

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