Why this decision sits with finance and estates, not just facilities

UK businesses do not buy solar the way a household does. The roof is an asset class, the bill is a cost centre, and the board will ask who owns the kit, who carries the defect risk, and what the books look like in year seven. Pay-as-you-go (PAYGO) solar is one of three common answers to that conversation. The other two are buying the system outright (CAPEX) and a power purchase agreement (PPA). They are not the same product with different logos. They allocate capital, risk and generation in different ways.

This guide is for commercial sites in the UK — warehouses, offices, retail, light industrial — that want on-site solar without pretending there is a single “best” route. It does not quote tariffs or grant rates. Those move. What does not move is the set of questions you should force any supplier to answer in writing.

If you already have quotes, compare them on commercial solar installation. If you need a site walk before anyone talks finance, book a survey.

What PAYGO solar actually means on a commercial roof

PAYGO, “no upfront cost”, “solar as a service” and “funded install” get used interchangeably in sales decks. In practice they usually mean:

That is close to a PPA, and many “PAYGO” offers *are* PPAs with simpler branding. The useful distinction is commercial, not legal theatre: Ask for the legal form in one sentence: sale, lease, licence, PPA, or hire. If they cannot say, do not sign.

CAPEX, PPA and PAYGO compared

Overview

None of these rows is a score. A cash-rich manufacturer with a 25-year site may prefer CAPEX. A multi-site retailer with landlord constraints may prefer a funded route. An SME with a five-year lease should not pretend it has a 25-year roof.

Match the product to the load, not the brochure

On-site solar earns its keep when generation lands on your meters during your occupied hours.

PAYGO sales stories sometimes assume every kWh is “free electricity”. It is not. You still need: If the proposal cannot show self-consumption versus export, it is a brochure, not a model.

Landlords, leases and who can sign

Commercial solar dies in legal, not on the roof.

Get estates and the landlord’s solicitor in the first meeting, not after a deposit invoice.

Grid, G99 and the DNO

Any commercial array that can export will meet the Distribution Network Operator. G99 (and related connection processes) is not optional paperwork. Export limitation, G100, and wait times can change the economics more than panel brand.

Funded / PAYGO offers sometimes treat DNO as “we handle it”. You still need:

If generation was modelled with unconstrained export and the DNO then clips it, who eats the difference — you or the funder?

Operations, performance and the 10-year hole

Inverters, optimisers, monitoring portals and roof penetrations all have a life. On CAPEX you budget replacement. On PAYGO/PPA the plant owner should budget it — if the contract says so.

Put in the schedule of works:

A PAYGO rate that looks cheap because O&M was left with you is not cheap.

Carbon claims, REGOs and reporting

Boards talking about net zero need to know who can claim the renewable attribute. On-site generation behind the meter is not automatically the same as a bundled REGO from a supplier. If the funder keeps the certificates, your sustainability report may not be able to say what the sales slide said.

State in the contract:

Do not invent SECR or IFRS treatments here. Take the contract to your accountant. Off-balance-sheet is a conclusion, not a feature tick-box.

A practical checklist before you sign a PAYGO term sheet

The following points summarise the key takeaways:

If any item is “we’ll confirm in the full contract”, you do not have a deal yet.

How Kilowatts UK uses this in a commercial quote

We size the roof and the load first. Finance is the second conversation, not the first. A funded route that does not fit the occupancy pattern will still be a bad plant.

Compare a proper commercial design — generation, layout, and battery if peak shaving or backup is in scope — on the commercial solar compare tool. For a site visit, book a survey.

If the site also has urban wind (for example a vertical-axis cluster) or a commercial battery, those are separate yield and connection problems. Do not let a PAYGO solar rate hide a messy hybrid.

Bottom line

PAYGO solar can be a clean way for a UK business to get a roof working without a capex line. It can also be a PPA with the serial numbers filed off. Treat it as a financing and ownership decision sitting on top of a physical solar design. Get the design honest first. Then choose CAPEX, PPA or PAYGO because the contract matches how long you will be on that roof — not because the brochure said “no upfront cost”.