Solar Carport Direct Capital Purchase

Direct capital purchase is the financially strongest route for commercial solar carport projects — provided you have the capital available and the year-one profit to absorb AIA tax relief. You pay the full capex upfront, own the asset, claim 100% Annual Investment Allowance in year one (recovering up to 25% of capex as corporation tax saving), and retain every kWh of generation savings for 25-30 years.

How capital purchase works

Simplest route: we invoice you for the agreed turnkey capex (typically £950-£1,300/kWp), you pay in milestones (10% deposit, 40% at design sign-off, 40% at start of build, 10% at handover). You own the carport from handover. At year-end you claim 100% AIA against corporation tax. From year two onwards, no payments — just generation savings, until the 25-year warranty expires.

AIA tax benefit — the key driver

Annual Investment Allowance is the UK's 100% first-year capital allowance for plant and machinery. Permanent from April 2023 at £1m per company group per year. On £400k of commercial carport capex, AIA claims £400k against profit, saving £100k of corporation tax at the 25% main rate. Effective post-tax capex: £300k, not £400k.

Capital purchase economics — worked example

£400k commercial solar carport in 2026, 300 kWp, 200 bays. Pre-tax capex: £400,000. AIA tax saving year 1: £100,000 (at 25% main rate). Effective post-tax capex: £300,000. Annual saving (75% self-cons + 25% export at SEG): £170,000. Simple payback: 2.35 years. After-AIA payback: 1.76 years. Years 2-25: pure generation savings totalling ~£4.5m at 2% RPI escalation. 25-year NPV at 8% discount rate: £2.2m.

When capital purchase is the right route

Choose capital purchase if: (1) you have at least £200-£500k of working capital available; (2) you have year-one taxable profit sufficient to absorb full AIA claim; (3) you want the highest absolute 25-year return (not the best cashflow profile); (4) you have surplus capex that doesn't yield >10% elsewhere; (5) you're comfortable owning a 25-year asset; (6) you want maximum independence from third-party PPA providers.

AIA stacking — when to spread capex

If your AIA is constrained (£1m group cap, or limited year-one profit), consider phasing the carport: 50% capex in Year 1 (claim full AIA), 50% in Year 2 (claim again). For £2m+ projects, this can be material. Note: the timing trick only works if the second phase is genuinely a separate project — HMRC scrutiny applies to artificial splits.

Capital purchase vs alternatives

Compared to asset finance over 25 years: capital purchase delivers ~10% better NPV (saves the 7-9.5% APR cost of finance). Compared to PPA: capital purchase delivers ~60-70% better 25-year NPV (PPA giving up generation upside). The trade-off is always cashflow risk — capital purchase puts £300-400k out the door in year 1.