Is sustainability or energy-efficiency funding available (solar, LED, heat recovery)?

Short answer: Yes — UK businesses can access multiple funding routes for solar, LED and heat recovery upgrades

Yes, sustainability and energy-efficiency funding is available to UK businesses, including projects like solar PV, LED lighting, and heat recovery. Suitable options include asset finance (lease and hire purchase), unsecured business loans, green loans, power purchase agreements (PPAs), and occasional grants or incentives. Best Business Loans helps you explore and connect with relevant lenders and brokers who actively fund these projects.

We are an independent introducer, not a lender or broker, and we don’t provide financial advice. Our AI-driven platform matches your business and project details to appropriate finance providers so you can compare structured options quickly. Any offers are subject to status, eligibility, and the lender’s criteria.

Common sustainability finance options include:

• Asset Finance: Lease or hire purchase for equipment like solar arrays, LEDs, heat pumps, HVAC, and control systems.
• Green Loans: Unsecured or secured business loans earmarked for sustainability upgrades.
• Power Purchase Agreements (PPAs): Third-party funds, owns and maintains your solar; you buy the electricity at an agreed rate.
• Government-backed schemes: For example, lending supported under the British Business Bank’s Growth Guarantee Scheme (where eligible).
• Local and sector grants: Time-limited grants from local authorities, devolved administrations, or industry programmes.

Updated: October 2025. Availability, pricing and incentives change, so please check current terms when you enquire. Submit a quick quote to see which providers are open for your sector and project size now.

What can be funded and how each route works

Solar PV for commercial premises

Solar PV is often financed via asset finance or a PPA. With asset finance, you own the system at term end and benefit from long-term energy savings. With a PPA, you avoid upfront capex and pay for on-site power at an agreed price per kWh over a contract term.

Typical aims: Reduce grid consumption, de-risk energy costs, and improve ESG credentials. Rooftop structural checks, planning considerations, and your load profile matter to lenders. Providers will usually review projected kWh generation, your consumption, and expected payback.

• Finance types: Hire purchase, lease, PPA, or blended approaches.
• Assessment: Site survey, yield modelling, installer credentials, and your trading performance.
• Key benefits: Long asset life, potential index-linked savings, and enhanced building appeal.

LED lighting upgrades and controls

LED upgrades are widely financed via lease or hire purchase, often becoming close to cash-flow neutral where energy savings offset repayments. Controls and sensors can be bundled into the same agreement. Lenders focus on verified baseline usage and credible savings estimates.

Many businesses prioritise LEDs because installation is rapid and the savings are predictable. Quality luminaires, warranties, and a reputable installer build lender confidence. Project M&V plans and manufacturer performance data also help underwriting.

• Finance types: Asset finance, unsecured green loan for smaller bundles.
• Assessment: Pre- and post-usage estimates, warranty terms, installer track record.
• Key benefits: Lower maintenance, better light quality, and reduced energy consumption.

Heat recovery, HVAC, and process efficiency

Heat recovery systems, variable speed drives, high-efficiency compressors, and BMS controls are eligible for asset finance and specialist green loans. Projects must show measurable reductions in energy intensity or waste heat. Lenders will want robust project scopes and supplier quotations.

For process-heavy sites, the savings per unit of output can be compelling. A staged programme across multiple plants can be financed under a master facility. Lenders appreciate phased roll-outs with KPIs, because each tranche can build on proven savings.

• Finance types: Lease or hire purchase for core equipment, unsecured loans for ancillaries.
• Assessment: Baseline data, proposed efficiency uplift, payback window, and resilience.
• Key benefits: Lower operating costs, higher productivity, and carbon reduction.

EV charging and ancillary energy projects

Commercial EV chargers, battery storage, and building fabric improvements can be packaged into energy-efficiency finance. Combining measures may improve the overall case. Lenders prefer technology with proven uptime and support contracts.

If transport is core to your operations, consider synchronising EV charge infrastructure with solar PV. Optimised load management can reduce peak demand charges. This integrated approach often strengthens affordability assessments.

Installer selection matters

Quality assurance helps both savings and underwriting confidence. Choose accredited installers with strong warranties and documented performance guarantees. Provide lenders with quotes, specifications, and a clear timeline.

Eligibility, documents and the steps to get matched

Who typically qualifies?

Established UK businesses with at least 12 months’ trading and demonstrable revenue usually qualify. Stronger cases show consistent cash flow and manageable existing liabilities. Energy-intensive sectors may find a wide choice of providers for larger projects.

Start-ups and sole traders are less likely to be supported on this platform. Finance providers assess affordability, not just technical savings. Directors’ guarantees may be requested depending on risk.

• Credit profile: No recent severe adverse events and sensible gearing.
• Project quality: Reputable supplier, clear capex, and evidenced savings.
• Security: Asset-backed structures and guarantees can reduce rates.

What to prepare for a smoother outcome

Prepare your last two years’ accounts and recent management figures. Include energy bills, half-hourly data if available, and a concise project proposal. Add supplier quotes, warranties, and expected kWh or gas reductions.

For solar, include roof survey details and a preliminary yield model. For LEDs, add a room-by-room schedule and photometric data if provided. For heat recovery, include process diagrams and M&V methodology.

• Core documents: Accounts, bank statements, debt schedule, ID and address for KYC.
• Project pack: Technical specs, savings model, installation plan, and maintenance.
• Policy context: ESG targets or net-zero plan can add weight.

How Best Business Loans helps

Our AI-led platform matches your business and project to suitable lenders and brokers. You complete a short Quick Quote form and tell us your capex, technology, and timeline. We introduce you to providers who can progress your case efficiently.

You remain in control at every step with no obligation to proceed. We don’t charge you to submit an enquiry and we don’t promise the lowest rate every time. We aim to connect you with credible partners who understand energy-efficiency finance.

Get Your Free Quick Quote Now and receive introductions for a Decision in Principle or eligibility check. Be as specific as possible about your equipment and expected savings. Clarity helps providers assess affordability faster.

Costs, savings and how lenders assess green projects

How affordability is judged

Lenders assess business strength, projected energy savings, and residual value of assets. For many projects, repayments are benchmarked against estimated monthly bill reductions. A credible savings model can help structure cash-flow-friendly terms.

Rates and terms depend on credit profile, asset type, and contract length. Longer terms can lower monthly payments but increase total cost of finance. Warranties and performance assurances may improve perceived risk.

• Term lengths: Commonly 2–7 years for LEDs and HVAC, longer for solar PV.
• Deposit: Often 0–20%, varies by provider and asset.
• Security: The financed equipment may act as security under asset finance.

Illustrative scenarios

An LED retrofit with a £120,000 capex might save a material share of lighting energy costs. If financed over five years, some businesses find savings comparable to monthly repayments, depending on rates and tariffs. Actual outcomes vary by building usage and hours of operation.

A 250 kWp rooftop solar array may offset a notable portion of daytime electricity consumption. Under a PPA, there’s no capex but you commit to buy on-site power at an agreed rate for a set term. Under hire purchase, you own the asset at term end and benefit from bill reduction thereafter.

Heat recovery can be compelling in food, manufacturing, and process environments. Savings depend on baseline heat rejection and recoverable temperatures. Phased implementation can align repayments with delivered savings.

Tax and incentives overview

Capital allowances may be available for qualifying plant and machinery. Some assets may be eligible for enhanced rates or first-year allowances, subject to current rules. Always consult a qualified tax adviser for up-to-date, tailored guidance.

Occasional grants or regional programmes can reduce net capex. Industrial Energy Transformation Fund and other schemes open in windows and target specific use cases. Availability changes, so verify dates, criteria, and co-funding requirements.

Business rate reliefs or local incentives may apply in limited cases. VAT treatment differs by asset and property type. Providers or installers can often point you to current official guidance.

FAQs, sectors we help, and next steps

Is funding really available for solar, LED and heat recovery?

Yes — multiple UK lenders and brokers actively fund these upgrades. Structures include asset finance, green loans and PPAs for solar. Terms depend on credit profile, asset life and project quality.

Can projects be cash-flow neutral?

Some projects can align repayments with forecast savings, but it’s not guaranteed. Outcomes depend on tariff rates, hours of use, technology performance and finance costs. Lenders will base decisions on prudent, verifiable assumptions.

Are grants guaranteed?

Grants are not guaranteed and are often time-limited and competitive. Treat grants as a potential bonus rather than a core assumption. If a grant is awarded, it can be integrated to reduce the finance requirement.

Do I need an accredited installer?

Most lenders prefer established, accredited installers with robust warranties. This reduces delivery risk and supports asset value. Check references and maintenance commitments up front.

How fast can funding be arranged?

Simple LED or equipment leases can be quick once documents are complete. Solar and heat recovery may require more technical due diligence. Start early and share complete data to speed decisions.

Which sectors are best suited?

Manufacturing, logistics, food processing, healthcare, retail estates and hospitality often see strong cases. Energy-intense or multi-site portfolios benefit from scale and standardisation. Explore sector guidance for manufacturing business loans if you operate in production or engineering.

Compliance, clarity and fair presentation

We aim to keep information clear, fair and not misleading in line with UK standards. We are an independent introducer and do not provide financial advice. Finance is provided by third-party firms that are regulated where required.

Key takeaways

• Yes, funding exists for solar PV, LED, heat recovery and related efficiency projects.
• Common routes: Asset finance, green loans, PPAs, and occasional grants.
• What lenders want: Solid business fundamentals, credible savings data and reputable installers.
• Cash flow: Some projects can align repayments with savings, but results vary.
• Next step: Submit a Quick Quote to be matched with relevant providers fast.

Next step: Complete your Quick Quote to check eligibility and get introduced to suitable lenders or brokers. It’s fast, secure and free to submit. You stay in control and decide what’s best for your business.

Start Your Quick Quote and outline your project in minutes. Include capex, technologies, and expected savings so we can match you accurately. Smarter finance starts with better matching.