In short
- Most businesses pay for solar in one of four ways: cash, a loan, a lease, or a power purchase agreement (PPA).
- With a loan, the monthly repayment is often smaller than the monthly saving, so the system can pay its way from the first month.
- Discounted "green" loans exist through some banks, and the tax treatment differs between options. Check both before you sign.
You don't need the full price of a solar system in the bank to get one. Many businesses finance it, and on a site that uses most of its solar in the daytime, the power bill saving can cover the repayments. The right choice depends on your cash, your tax position and whether you own the building.
| Quick facts | |
|---|---|
| The four main options | Cash, business loan, lease, power purchase agreement (PPA) |
| Who owns the system | You (cash or loan); the finance company, until the end (lease); usually the provider (PPA) |
| Average small business loan rate | 7.23% on new loans in August 2026 (Reserve Bank of Australia) |
| Green loan discounts | Up to about 1% off through some lenders backed by the Clean Energy Finance Corporation |
What are the ways to pay for business solar?
| Cash | Business loan or equipment finance | Lease | Power purchase agreement (PPA) | |
|---|---|---|---|---|
| Upfront cost | Full price | Little or none | Little or none | None |
| Who owns it | You | You (for tax, in most cases) | The finance company, until the end of the lease | Usually the provider |
| What you pay | Once | Fixed monthly repayments | Fixed monthly payments | A price per kWh of solar power you use |
| Who keeps the saving | All of it | All of it, less repayments | All of it, less payments | The gap between the PPA price and your grid price |
| Who maintains it | You | You | Set out in the lease | Usually the provider |
Cash gives the biggest saving over the system's life, because you pay no interest. The catch is that the money is tied up, and a business may earn more by spending it elsewhere.
A business loan or equipment finance spreads the cost over a set term. You keep the full saving and pay the lender back from it. This includes a chattel mortgage and hire purchase, which are common ways to finance equipment.
A lease works like renting the system. The Australian Government's energy.gov.au says a solar lease might run 5 or 10 years, after which you own the system. It adds that "if the leased solar system is for your business, you may be able to claim tax-deductions against the repayments."
A PPA means a provider pays for and installs the system, and you buy the power it makes at an agreed rate per kWh. energy.gov.au says a PPA typically lasts 10 to 15 years, and warns that "what you pay over the life of your contract may be more than the cost of buying your own solar system." PPAs suit businesses that want no upfront cost and no maintenance.
Will the saving cover the repayments?
Here is a worked example using the 100kW system from our 100kW guide. Commercial Solar Quotes does not publish prices. The figures are examples for the sums, not our prices or a quote.
What we assumed:
- Price after the STC discount: $90,000 ($900 per kW), all of it borrowed
- Yearly saving: $37,580 if you use 80% of the solar on site, or $22,805 if you use 40% (the working is in the 100kW guide)
- Interest rate: 7.23%, the average rate on new small business loans in August 2026 (Reserve Bank of Australia, table F7). We also show 9%, for a higher quote.
- Repayments: monthly, over 5 or 7 years
| Loan | Monthly repayment | Monthly saving at 80% use | Left over each month | Monthly saving at 40% use | Left over each month |
|---|---|---|---|---|---|
| 5 years at 7.23% | $1,792 | $3,132 | $1,340 | $1,900 | $108 |
| 7 years at 7.23% | $1,368 | $3,132 | $1,764 | $1,900 | $532 |
| 5 years at 9% | $1,868 | $3,132 | $1,264 | $1,900 | $32 |
| 7 years at 9% | $1,448 | $3,132 | $1,684 | $1,900 | $452 |
In plain words: at 80% use, the saving is well above the repayment in every case, so the system pays its way from the first month. At 40% use, a 5-year loan only just breaks even, and a 7-year loan leaves room to spare.
A longer loan costs more in interest. Over 7 years at 7.23%, the interest comes to about $24,950, compared with about $17,510 over 5 years. Once the loan is paid off, the full saving is yours for the rest of the system's life.
These figures leave out tax, GST, fees and any change in power prices. Your own numbers depend on your quote, your bill and your lender.
Can I get a cheaper green loan?
Yes, through some lenders. The Clean Energy Finance Corporation (CEFC) is a government-owned green bank. It doesn't lend to businesses directly. Instead, it backs discounted finance through partner lenders, usually for amounts from $10,000 to $5 million.
The programs it lists for business equipment include:
- ANZ Energy Efficient Asset Finance: a discount of 0.8% a year, for assets including rooftop solar and batteries (announced July 2026)
- MetroEco (Metro Finance): a 1% discount on Metro's standard rate
- NAB Green Finance for Vehicles and Equipment
- Credabl: up to 0.65% off, for healthcare practices
The CEFC lists further programs for farms. Eligibility and rates are set by each lender, so ask the lender, or your broker, whether your system qualifies. On the example above, 1% off a 7-year loan of $90,000 saves about $3,700 in interest.
What about tax?
This is general information, not tax advice. Ask your accountant how it applies to your business.
- If you buy the system (cash or loan): it is a depreciating asset. The ATO's current effective life for a solar system (panels, mounting frames and inverters together) is 20 years. Interest on money borrowed to buy income-producing assets is listed by the ATO as a deductible expense.
- The $20,000 instant asset write-off applies to assets costing less than $20,000, for small businesses with turnover under $10 million. Most commercial systems cost more than that. Small businesses using simpler depreciation can add the cost to the small business pool instead, where it is written off at 15% in the first year and 30% each year after.
- If you lease: the ATO lists lease expenses as deductible. Rooftop solar is fixed to the building, which can make you and the finance company both "holders" of the system for depreciation. Ask your accountant how this applies to your lease.
- Hire purchase: you don't legally own the system until the final payment, but for income tax you are treated as the owner. For agreements made since 1 July 2012, the ATO says you can claim the GST credit upfront, including on the credit charges.
What if I don't own the building?
Financing solar on a building you rent raises extra questions. Who owns the system if you move out? Can the landlord's consent be put in writing? A PPA or a lease can work here, because the provider owns or removes the system.
Some states have a scheme built for this. It lets a building owner borrow for upgrades such as solar and repay the loan through a charge collected by the council. In South Australia it is called Building Upgrade Finance. The state government says it offers long-term loans of 10 to 20 years, the option of fixed interest rates, and "the ability to share costs and benefits with tenants". NSW law lets councils make similar environmental upgrade agreements. Ask your council whether it takes part.
What to ask before you sign
- What is the total cost over the full term, including fees, not only the monthly payment?
- Is there a penalty for paying the loan off early?
- Who owns the system at the end, and is there a final or balloon payment?
- Who pays for maintenance and repairs, and who holds the warranties?
- For a PPA: how is the rate per kWh set, does it rise each year, and what happens if I sell or move out?
- Does this system qualify for a CEFC-backed green loan discount?
Finance only makes sense once you know what your site saves. Send a bill and an accredited installer prepares a costed proposal with the yearly saving worked out, so you can compare it with the repayments. It is free, with no obligation.