How Renewable Energy Businesses Can Use Finance to Accelerate Growth in 2025 and We Can Help

The UK’s renewable energy sector is expanding at a remarkable pace. From solar farms and anaerobic digesters to wind turbines, EV infrastructure and battery storage, demand for sustainable energy solutions continues to grow as households, businesses and local authorities push toward cleaner, more efficient power.

However, while the sector is rich in opportunity, renewable energy businesses often face intense capital requirements. Equipment costs are high, installation projects can take months to complete, and cash flow pressure is common especially when grant applications, government schemes, and customer contracts have delayed payment structures.

This is where targeted funding solutions can transform the speed and scale at which renewable energy companies grow. Below, we explore the key ways renewable energy businesses can use finance strategically and how Principal Business Finance Limited supports companies across the UK in securing the right funding at the right time.

Financing High-Cost Renewable Energy Equipment

Renewable infrastructure is capital-intensive. Whether a business is installing:

• Solar PV systems

• Heat pumps

• Wind turbines

• Biomass boilers

• EV chargers

• Battery storage or hybrid systems

• Hydro or micro-hydro equipment

…the upfront cost can be significant.

Asset finance allows businesses to spread these costs over 2–7 years (sometimes longer, depending on asset class), preserving cash reserves while staying competitive and operational.

Benefits of asset finance for renewables

• Maintains cash flow while enabling immediate installation

• Often eligible for competitive “green asset” rates

• Helps businesses upgrade to newer, more efficient technology

• Enables long-term project planning

Principal Business Finance works with specialist “green lenders” who understand renewable asset values and offer flexible terms tailored to sustainable energy projects.

Funding Project Installation & Labour Costs

A major challenge for renewable energy installers is funding the upfront costs of labour, scaffolding, cabling, subcontractors and materials—often long before the customer pays.

This creates a gap between project completion and cash received.

Working capital loans and business cash flow funding can bridge this gap, ensuring projects continue without interruption.

These types of funding help businesses:

• Take on larger, more complex contracts

• Avoid delaying projects due to cash shortages

• Pay suppliers and subcontractors on time

• Smooth cash flow between seasonal peaks

Principal Business Finance can source both unsecured and secured options depending on business structure, profitability and credit profile.

Using Invoice Finance for Contract-Based Renewables

Renewable projects often involve commercial clients or government bodies that operate on 30–120 day payment terms.

Invoice finance allows businesses to unlock up to 90% of the value of an invoice immediately, instead of waiting months to get paid.

Industries where invoice finance is especially effective

• Commercial solar installation

• EV charger network installation

• Construction-linked renewable projects

• Facilities management energy upgrades

• Local authority sustainability contracts

As a result, renewable energy businesses can fund ongoing projects without relying on short-term loans. Principal Business Finance collaborates with renewable-friendly lenders who understand long payment structures in this sector.

Refinancing Existing Renewable Equipment

A growing number of renewable energy companies have valuable equipment already in place—vans, cherry pickers, battery storage units, solar hardware, and specialised machinery.

Asset refinance allows businesses to unlock capital tied up in those assets, without taking on new unsecured debt.

Why this is powerful for renewable businesses

• Releases working capital tied up in machinery

• Can help repay expensive short-term loans

• Creates funds for expansion without diluting ownership

• Often comes with better interest rates than cash loans

Principal Business Finance works with lenders experienced in valuing renewable assets correctly, ensuring businesses access the highest amount possible.

Expanding Into New Renewable Markets

Many businesses within the sector want to expand into complementary areas, such as:

• Solar installers launching EV charger divisions

• Electrical companies adding heat pump services

• Battery specialists offering off-grid systems

• Construction firms opening renewable energy subsidiaries

Expansion requires investment—vehicles, staff, accreditations, stock, tools, warehouse upgrades and marketing.

Principal Business Finance can arrange:

• Business loans

• Equipment finance

• Franchise-style funding structures

• Recruitment and training finance

• Marketing and website financing

These solutions help renewable businesses scale quickly without relying solely on cash reserves.

Funding for Stock, Warehousing & Distribution

Renewable energy stock is not cheap, and suppliers often require upfront payment.

Finance options include:

• Trade finance

• Stock finance

• VAT loans

• Working capital loans

These allow installers and retailers to hold more inventory, eliminate supply delays, and increase installation capacity especially during peak seasons.

Principal Business Finance can arrange short to mid-term funding structures to solve stock bottlenecks instantly.

VAT, Corporation Tax & Self-Assessment Funding

Renewable energy businesses often experience fluctuating cash flow due to project-based work.

VAT and tax funding solutions help businesses avoid disruptions by spreading HMRC liabilities over manageable instalments.

Principal Business Finance ensures:

• HMRC is paid directly by the lender

• The business retains cash for growth

• No operational slowdown during tax season

This is particularly valuable when multiple large installations fall into the same VAT quarter.

Why Renewable Energy Businesses Choose Principal Business Finance

Renewable energy is one of the fastest-growing sectors in the UK, but funding can be complex due to:

• Long project timelines

• High equipment costs

• Compliance and accreditation requirements

• Specialist asset classes

• Mixed-payment structures

Principal Business Finance simplifies the process.

What we provide

• Access to 100+ specialist lenders, including green finance providers

• Fast decisions thanks to direct underwriter access

• Funding tailored to renewable assets, not generic criteria

• Multiple options presented clearly loans, asset finance, invoice finance, refinance

• End-to-end support, from application to payout

Whether you’re scaling to meet demand or launching a brand-new renewable division, the right funding makes it possible. Contact us on 01604217998, email info@principalbusinessfinance.co.uk, or enquire here.