Capital Expenditure
Capital Expenditure for Solar Explained
Capital expenditure (Capex) for a solar installation means your business buys and owns the system outright, paying the full cost upfront. You benefit from free electricity once installed, but you’re responsible for the investment, maintenance, and any performance risks — unlike a PPA where the energy provider owns and operates it.
Capex Example
Company Type and Region: Chemical Company, North Yorkshire
System Size: 750 kWp
Estimated Consumption (85%): 589,688 kWh/year
Estimated Cost of Electricity (Based 2025): 20p
Assumed Inflation of Electricity: 4%
Project Cost @ £600 per kW: £450,000
Total Cost of Electricity over 25 Years @ 4% Inflation: £4.9 million
Total Savings: £4.9 million
Additional Savings: 3315 tonnes of CO2 emissions over 25 years