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Compare a business solar loan and a finance lease using the same equipment, financing period and outcome at the end of the agreement. Then examine ownership, upfront cash, scheduled payments, the purchase payment and the ability to change the arrangement. A lower monthly instalment does not by itself mean a lower total outlay.
This guide helps a Ukrainian business prepare two proposals for comparison. This guide concerns financing equipment for the company's own PV installation. Energy service agreements require a separate comparison. Every figure in the worked example is hypothetical. It illustrates how to check payment schedules and contains no current lending rates or financial institution offers.
Start with the same project
Give both finance providers the same specification: equipment models and quantities, price, installation scope, location and commissioning plan. If one proposal finances a completed installation while the other covers only panels and inverters, their deposits and instalments describe different scopes. Add the works the business will pay for separately before comparing totals.
Define the same final outcome. For example, after 36 months the company owns the same equipment and has no remaining financing obligations. An arrangement requiring equipment return cannot be compared directly with an acquisition. If purchase is optional, calculate separate cases with and without purchase.
Check the installation's underlying economics before choosing how to pay for it. The article on business solar payback explains self-consumption and project cashflows. Here we assume the same operating conditions so differences between contracts are not confused with different generation or equipment capacity.
Separate ownership from the right to use equipment
In the loan scenario, the business borrows funds and purchases equipment under a supply agreement. Check that agreement for the ownership transfer point and acceptance documents. Review loan security separately: what is pledged, which approvals are needed to sell or alter the asset, and how security is released after repayment.
Under a finance lease, the lessor provides possession and use of property that it owns. The agreed contractual documents determine how the business can acquire that property. Do not assume the final regular instalment automatically marks the ownership transfer date. Check the purchase amount, other conditions and required transfer documents.
The business solar leasing page provides a starting point for discussing this model. Before agreeing to a specific contract, identify the purchaser from the supplier, equipment recipient, owner and user. For a rented roof, separately agree on access, installation duration and the position when the property lease ends. Financing does not replace checking site rights.
Establish exactly what is financed
Ask whether the financed amount includes mounting, switchboards, delivery, installation, configuration and connection. “Solar leasing” does not define all those items. The specification and agreement should answer the question, with excluded works included in the company's own project budget.
The deposit and total cash required at the start are different amounts. Fees, insurance, roof preparation, works and payments before acceptance can add to the deposit. Record a date, recipient and funding source for each item. If equipment arrives before the roof is ready, check storage costs and the consequences of delayed commissioning.
A solar loan proposal also needs to distinguish the borrowing amount from funds actually available after deductions. Ask whether a fee is paid separately, added to principal or deducted from the disbursement. Include the same expense only once in the comparison.
Align financing with equipment acceptance. Identify who checks specifications, delivery damage and installation, with documents, responsible people and deadlines for correcting defects. Financing approval does not replace technical inspection. Before signing acceptance documents, establish who approves substituted or delayed components and whether these affect subsequent payments. Agree who receives completeness complaints and contacts the supplier, especially when purchaser, payer and user are different parties. Every participant should understand the documented acceptance result.
Create one payment register for both proposals
Use identical columns: date, regular payment, separate fee, service and insurance, final payment and total due on that date. Add the document or contract clause supporting each line. If a service is included in a regular payment, mark it as included instead of adding its cost again.
For the loan, request a split between interest and principal. For the lease, obtain a breakdown of the payment and additional costs in the proposal. Comparing advertised percentages alone is insufficient: calculation bases, frequency, fees and final payments may differ. An unknown amount should remain an open question, not become zero.
Identify the event that starts payment obligations: disbursement, equipment handover or another agreed date. Payments and savings may begin at different times. To assess whether the business can pay in particular months, use the guide to solar loan payments and seasonal savings. This comparison focuses on the complete scope of two agreements.
Worked example: lower instalments, higher total
Assume equipment costs UAH 1,500,000 and installation plus other agreed works cost UAH 300,000. In both cases the company pays UAH 300,000 toward equipment and pays for all works upfront. The financed equipment amount is UAH 1,200,000. The comparison covers 36 months; by its end, the company owns the equipment with no debt remaining under this model.
Use two invented payment schedules without assigning interest rates. The loan has 36 payments of UAH 42,000 and an upfront fee of UAH 12,000. The lease has 36 payments of UAH 39,000, a UAH 24,000 fee and a separate UAH 180,000 purchase payment at the end of month 36. Regular instalments exclude the separately listed costs.
| Component | Loan | Finance lease |
|---|---|---|
| Owner contribution toward equipment | 300,000 | 300,000 |
| Works paid from own funds | 300,000 | 300,000 |
| Upfront fee | 12,000 | 24,000 |
| Regular payments across the term | 1,512,000 | 1,404,000 |
| Service and insurance over three years | 54,000 | 54,000 |
| Separate final purchase payment | 0 | 180,000 |
| Total within the example | 2,178,000 | 2,262,000 |
Service and insurance together cost an assumed UAH 18,000 annually, paid at the start and at the end of months 12 and 24. All amounts exclude VAT. Taxes, tax recoveries, currency movements, penalties and unexpected repairs are not modelled. These exclusions do not establish that such cashflows will be absent from a real transaction.
The difference in regular instalments gives the lease scenario UAH 3,000 × 36 = UAH 108,000 of lower payments during the term. However, the additional UAH 12,000 fee and UAH 180,000 purchase payment change the total: 180,000 + 12,000 - 108,000 = UAH 84,000 more. This result applies only to the stated assumptions, not to loans and leases generally.
Check the final payment and early exit
In this example, initial payments including the first year of service and insurance are UAH 630,000 for the loan and UAH 642,000 for the lease. At the end of month 36, the loan payment is UAH 42,000, while the lease instalment plus purchase payment is UAH 219,000. Prepare for that final amount even if ordinary monthly instalments appear manageable.
The table shows undiscounted cash outlays. It does not measure the time value of money and is not an effective interest rate. An investment review can add the present value of both schedules using the same justified discount rate. Do not choose different rates merely to favour the preferred option.
Request a separate early-exit calculation for a selected date: outstanding obligations, extra charges, purchase or return requirements and completion timing. Do not assume adding future regular instalments produces the settlement amount. Check the applicable contractual terms rather than relying on a promotional description.
Read service and damage provisions together
Identify who orders maintenance, reports a fault, authorises repair and deals with the insurer. Ask about covered risks, exclusions, deductibles, the recipient of insurance proceeds and expenses left to the business. Including an insurance payment in the schedule does not establish that a particular type of damage is covered.
Review what happens during downtime or equipment loss: which obligations continue, what notices are required and how compensation is applied. Do not assume financing payments stop automatically when generation stops. Supplier warranties, service arrangements and finance documents need to be read together, but they represent different obligations.
Keep currency and tax assumptions explicit
Record the payment currency and any foreign-currency equivalent or indexation. If an amount depends on an exchange rate or variable interest rate, identify the reference, reset date and formula. Compare both schedules under the same change in those inputs. A hryvnia heading on the proposal does not replace reading the relevant clause.
Tax consequences and accounting treatment require review for the particular company and contract structure. Do not treat every payment as an automatic tax saving or equate legal ownership with every accounting measure. Ask accounting staff to show applicable cash movements and their dates separately. Unconfirmed relief should not reduce the comparison total.
Define the result needed before signing
The decision note should explain the choice against four criteria: upfront cash, payments during the term, equipment rights and the consequences of changing plans. Include unresolved questions, responsible people and response dates. One smaller number cannot compensate for an undefined purchase payment or an omitted piece of work.
For solar financing comparisons with ONG Solar, prepare one consistent estimate, two draft agreements, payment schedules, a target commissioning date and the available contribution. Confirm the technical configuration and have the appropriate specialists review contractual and tax questions. The decision can then rely on a clear outcome and a checked payment calendar.