How do zero capex solar and battery models work?

Zero capex means you contribute no equipment capital under the agreed scope; it does not remove electricity payments or property commitments. Government guidance describes power purchase agreements lasting from 1 to more than 25 years [S1]. Compare fully funded, part funded and self funded terms using the same demand, maintenance and exit assumptions. Checked October 2026.

Last checked 16 October 2026

What is zero capex solar for a business?

Capital expenditure, or capex, is the upfront investment in equipment and installation. Operating expenditure, or opex, is the ongoing cost. With an on-site power purchase agreement (PPA), you agree electricity purchasing terms. The government’s solar roadmap describes PPAs as contracts between renewable generators and corporate buyers for a defined period. [S2]

Ask for a complete cost schedule even when the proposal says zero capex. Request the electricity tariff, any minimum purchase obligation, standing charges, roof work, insurance allocation and termination payments. Have your solicitor review the property rights and your accountant review the financial treatment. This is a comparison framework, not finance, tax or legal advice.

Government procurement guidance puts consumption volume, delivery dates and the existing electricity contract ahead of market engagement. It also recommends legal support for contract documentation. Those questions give you a useful starting point for a commercial specification. [S1]

How do fully funded, part funded and self funded models compare?

Use these labels to organise the offers you request. The actual contract decides ownership and income rights.

Solar bill reductions are avoided expenditure, rather than cash paid into your account. Keep them separate from rent and export receipts. A funded roof arrangement may pay rent, sell you power, or combine these, so request an annual cash-flow schedule. Read the PPA comparison.

What could the project earn and how many years until payback?

The following is an illustration, not a quote. Every commercial input is an assumption, not a market price, forecast, grant award or confirmed offer. Low, mid and high refer to use of solar electricity on site. Figures exclude VAT, tax, finance, degradation, inflation, replacement capital, grid upgrades and export revenue.

For this deliberately simplified comparison, net operating benefit equals useful energy × £0.25 minus £1,000. That produces £4,000, £6,500 and £9,000 annually. The part funded arrangement assumes the funder accepts the remaining 30% after operating costs. It includes no separate PPA payment. Any real tariff payment must be deducted before using these results.

ROI, or return on investment, is annual net benefit ÷ host capital × 100. Simple payback is host capital ÷ annual net benefit. Across the capital range and use cases, self funded payback is 5.6–17.5 years; part funded is 4.0–12.5 years. These operating benefits are bill value, not distributable cash profit. Fully funded rent is cash income under the assumption; no host capital means capital payback is not applicable.

Can a battery improve the zero capex business case?

Ask for the battery’s incremental benefit rather than attributing the entire solar output to storage. Compare the same site’s solar-only design with solar plus battery, showing losses, maintenance and replacement. Do not count a stored kilowatt-hour as both immediate consumption and later discharge.

A kilowatt (kW) measures power; a kilowatt-hour (kWh) measures energy. Ask the designer to reconcile charger sessions with your operating hours and load data. The illustration’s charging demand is already inside useful site consumption, so it creates no additional revenue line.

Use the solar and battery ROI guide and battery sizing guide to prepare your comparison.

What site and contract checks come before an agreement?

Have the installer confirm the connection route with your distribution network operator (DNO), the local electricity network company. UK Power Networks provides an assessment route for low carbon installations, including generation applications. Ask which notification or connection application route applies to your combined design. [S3]

Request roof access and repair terms, lender and landlord consents, planning checks, fire assessment, removal costs and treatment of business rates. Ask how the contract handles redevelopment or a change of tenant. These are proposed due-diligence questions, not universal contract conditions. Keep parking and emergency access requirements visible if the design includes chargers or a battery enclosure.

For Great Britain, the Smart Export Guarantee (SEG) supports eligible exported renewable electricity through supplier tariffs. Establish who receives the payments and whether your model qualifies before counting export income. [S4]

What should you do next?

Request comparable funded and purchase proposals, then replace every illustrative input with survey evidence and written terms. Piggy Pineapple Ltd operates this referral service. We refer enquiries to installer partners and may be paid a fee. Our owner holds shares in at least one partner. Before sharing your details, we name the partner and disclose any shareholding our owner holds in it. Read how we work and get matched with an installer that covers your area.