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Solar Lease vs Buy Calculator (UK)

Free UK solar lease vs buy calculator. Compare cash purchase, financed purchase, and rent-a-roof / PPA over 25 years using current 2026 zero-VAT pricing, MCS-installer rates, and Octopus SEG export tariffs.

Solar Lease vs Buy Calculator

Cash purchase — 25-year net
£34,016
Loan purchase — 25-year net
£29,672
PPA / rent-a-roof — 25-year net
£8,853
Verdict
Cash purchase wins by £4,344

How to use this calculator

Enter your gross system cost ex-VAT (zero-rated through 31 March 2027 per HMRC Notice 708/6), your year-1 monthly bill savings (self-consumption + SEG export income), and the financing parameters for both options. The calculator returns your 25-year net position for cash purchase, financed purchase, and rent-a-roof / PPA — and highlights the winning structure.

The math accounts for the (essentially zero) UK incentive after FiT closure, Ofgem cap escalation (default 4%/yr — DESNZ 2024-26 trend), 0.5% annual O&M, and a 7%-of-system-cost inverter replacement at year 12.

How the math works

Three side-by-side 25-year cash flow models:

Cash purchase

net = -systemCost + Σ(yr 1..25) annualSavings × (1 + esc)^(y-1) − O&M − inverter

Loan purchase (standard amortising)

monthly = P × r / (1 − (1+r)^-n)   where r = APR/12, n = term × 12
net = -totalLoanPaid + Σ savings − O&M − inverter

Rent-a-roof / PPA

net = Σ savings − Σ leasePayment × (1 + leaseEsc)^(y-1)

Worked example for the en-gb defaults (£7,500 system, 0% UK incentive after FiT closure, £86/mo savings, 9.9% / 10-yr loan, £78/mo PPA at 3% escalator, 4% rate escalator, 25-yr horizon):

  • Cumulative bill savings (4%/yr escalation): £1,032 × ((1.04²⁵ − 1) / 0.04) ≈ £42,990
  • Cash net: −£7,500 + £42,990 − £937 O&M − £525 inverter = +£34,028
  • Loan total paid: £98.61 × 120 = £11,833; net = −£11,833 + £42,990 − £937 − £525 = +£29,695
  • PPA cumulative payments (3% escalator over 25 yrs): £936 × 36.46 ≈ £34,127; PPA net = £42,990 − £34,127 = +£8,863

Cash beats PPA by ~£25,000 over 25 years. Cash beats loan by ~£4,300 — the spread is the cost of borrowing at 9.9% versus the modest opportunity cost of capital deployed in a Cash ISA at 4-5%.

Why UK leases lose so badly vs ownership

The post-FiT UK lease model has no incentive to share. Compare to the U.S., where the leasing operator captures the 30% federal ITC and shares ~10% with the lessee through pricing — UK operators have nothing comparable. The 0% VAT zero-rate is not transferable to a lessee, and SEG export income flows to the asset owner.

The result: UK PPA pricing must rely entirely on margin between wholesale electricity costs (which the operator pays nothing for — they’re using your roof) and a discounted retail rate sold back to the homeowner. That margin is structurally too thin to compete with ownership.

When does a UK PPA make sense?

Three legitimate niches:

  1. Heritage / listed buildings where a homeowner wants solar but cannot finance traditional installation — some operators offer specialised heritage-friendly leasing structures.
  2. Council tenants in shared-ownership properties where the leaseholder cannot install owned PV but can sign a service agreement.
  3. Pre-fabricated / modular / temporary structures where the system needs to move with the operator at end of life.

For the typical UK detached or semi-detached owner-occupier, a cash or financed purchase wins by £20,000-£30,000 over 25 years.

Comparison of all three structures

FactorCashLoanPPA / rent-a-roof
Up-front costFull system cost£0 (some lenders charge fee)£0
Monthly cash flow year 1+£86-£13+£8
25-year net+£34,028+£29,695+£8,863
0% VAT benefitHomeownerHomeownerOperator
SEG export incomeHomeownerHomeownerOperator
Equity in system100%100% (after loan)0%
Resale value premiumModest (£3-7k typical)Same as cashNegative (mortgage friction)
Inverter replacementHomeownerHomeownerOperator
Annual escalatorNoneNone2.5-3.9% per year

Pair this with the solar loan calculator, payback calculator, and ROI calculator

For UK homeowners, the practical question is rarely “lease or buy” — it’s “cash or loan.” Run the loan calculator to size the monthly repayment, the payback calculator to confirm year-of-break-even, and the ROI calculator to validate the 25-year IRR.

Sources

Frequently asked questions

Do solar leases still exist in the UK?
Barely. The original UK rent-a-roof market (Solar Plants, A Shade Greener, Engensa, Solar Panels Direct) collapsed after the Feed-in Tariff closure on 31 March 2019. As of 2026, only a handful of operators offer residential PPAs — typically Octopus Energy's solar-as-a-service trial, EDF's My Energy bundle, and a few smaller MCS-aligned providers. Most UK homeowners now buy outright (76% per MCS 2025 data) or finance through Hitachi Personal Finance, Tesco Bank, or building-society green loans. The rent-a-roof model is essentially extinct.
Is buying or leasing solar better in the UK in 2026?
Buying wins almost universally. Without the FiT (closed 2019), the UK lease/PPA model has no operator subsidy to share — operators must price purely on the spread between SEG export tariffs (12-15p/kWh) and a discounted retail rate sold to the homeowner. The 0% VAT zero-rate (HMRC Notice 708/6, extended to March 2027) goes to the buyer not the lessee. A cash purchase of a 4 kW system at £7,500 returns £14,000+ over 25 years; a 25-year PPA at £78/mo with 3% escalator returns roughly £6,000-£8,000. The 25-year delta is £6,000-£8,000 in favour of ownership.
How does the Smart Export Guarantee (SEG) interact with a lease?
Under most UK PPA / rent-a-roof structures, the operator (not the homeowner) retains all SEG export income. Octopus Outgoing Fixed pays 15p/kWh, Octopus Outgoing Agile averages 18p/kWh, EDF 5-12p/kWh — for a typical 4 kW system exporting 2,000 kWh/yr, that's £100-£300 of export income per year that the operator captures, not you. Over 25 years, this alone adds £3,000-£8,000 to the operator's pocket — money you would keep if you bought outright.
What happens to a UK PPA if I sell my house?
Three options, all problematic. (1) The buyer assumes the PPA (most lenders refuse a mortgage on a property with an unsecured 25-year lease attached, so the buyer's solicitor will likely raise an objection). (2) You buy out the remaining contract (typical £5,000-£10,000 mid-term — wipes out years of saving). (3) Operator removes the system at your cost (£800-£1,500). UK Finance and the Building Societies Association both flag rent-a-roof contracts as a mortgage-search red-flag. If you plan to move within 10 years, do not lease.
Can I get the 0% VAT zero-rate on a leased solar system?
No — the VAT zero-rate under HMRC Notice 708/6 applies to the SUPPLY of energy-saving materials installed in residential premises. In a lease/PPA, the operator owns the system and supplies you with electricity (which is standard 5% domestic VAT). You see no VAT benefit. The leasing operator does — and they pocket the saving rather than passing it through. This is one of the structural reasons UK leases lose to ownership: the homeowner forfeits both the 0% VAT and the SEG income.

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