Buying solar panels vs PPA: which makes more sense for your business?

Gary Carter
Jun 5
3 min read

Updated: Jun 30

Is it smarter to buy your solar panels or let someone else fund them?

If your business is exploring renewable energy, one of the first decisions you’ll face is how to pay for the system.

The two main options?

Buying solar panels outright
Or some form of funding arrangement, such as entering a power purchase agreement (PPA) where the system is funded by someone else

In this post, we’ll break down the pros and cons of buying solar panels vs PPA, highlight key differences between a solar PPA vs purchase, and help you understand which route offers the best long-term value. We look at other funding alternatives in other blog posts that we’ve linked at the bottom of this post.

What’s the difference between buying and a PPA?

Let’s start with definitions:

Buying solar panels means your business funds the installation, owns the system, and keeps 100% of the energy savings.
A PPA means a third party pays for the system, owns and maintains it, and you buy the electricity it generates at a reduced rate, typically lower than your grid tariff.

Think of it like this:

Buy = you own it from day one and benefit from free energy to the fullest extent
PPA = you benefit immediately from cheaper energy without any worries about the equipment

Financial impact: buying solar panels vs PPA is effectively capex vs cash flow

If your business has available capital and a long-term horizon, buying may maximise ROI.But for many organisations, a PPA is more attractive because it:

Requires no upfront investment
Delivers immediate energy savings
Keeps the project off your balance sheet (subject to structure)
Often includes operations and maintenance at no extra cost

For energy-intensive sectors or cash-constrained businesses, a PPA often makes the project affordable and achievable.

Strategic considerations

When deciding between solar PPA vs purchase, ask:

Do we have the CapEx available for an upfront investment?
Do we want full ownership or to outsource operation and maintenance?
Is long-term energy cost reduction more important than asset ownership?

And most importantly:

What solution delivers the best balance of savings, risk, and flexibility for our business?.

What we recommend at Optify

At Optify, we don’t take sides, we help you compare the options with real data and real business logic.

We model both options using your site’s consumption data, your current energy rate, and projected system performance to show you:

Your total lifetime savings
Monthly and annual cash flow impact
ROI under both CapEx and PPA routes
Breakeven points, funding eligibility, and risk profile

We compare funding options from across the funding market to find the best-fit options for all projects. The impact of choosing a best-fit option rather than a default funding option can dramatically impact your lifetime savings from the project.

There are many variables that feed into what works best for any particular project. Our comprehensive feasibility study, which we offer at no cost, establishes what funding options will strike the right balance between fitting with your requirements and getting the best return profile for you. You can organise your free renewable energy feasibility study via the button just below.

Arrange feasibility study

Next steps: explore your options with confidence

If you’re unsure whether to buy solar panels or go with a PPA, we’ve created a full comparison guide to walk you through it.

Read our impartial guide that looks into the good, and the bad, of PPA's and compares them with funding renewable energy projects from your capital budget

Read the guide

Try our free Renewable Energy Feasibility Kickstarter Tool for a quick headline assessment of the art of the possible for your business to transform energy costs.

Feasibility kickstarter tool