A new £100 million funding facility from Paragon Bank is set to drive the rollout of rooftop solar for UK small and medium-sized businesses, following the lender’s strategic partnership with energy services firm HDM Energies.
In what is being described as a first for the asset finance market, the agreement supports a tailored Power Purchase Agreement (PPA) product aimed squarely at SMEs.
The scheme enables eligible businesses to install rooftop solar with no upfront capital costs and instead pay a fixed, discounted rate for the energy they consume over a contract period of up to 25 years.
Unlike traditional finance or energy procurement models, the agreement allows customers to lock in long-term savings while contributing to the UK’s net zero targets. HDM Energies will carry out the site assessment, fund, install and maintain the system, with any unused power stored or exported to the National Grid.
Dan Rogers, founder of HDM Energies, said the deal marks a key milestone in the company’s ambition to deliver 2.5GW of rooftop solar by 2030.
“Partnering with Paragon Bank adds a strong layer of confidence for our customers,” he said. “Since founding HDM in 2022, our mission has been to empower small and medium-sized businesses with access to rooftop solar without the burden of upfront costs.
“The economics of solar have never been more advantageous, and with funding secured, trusted installation partners, a robust team and premium products supplied by our sister company HDM Solar (Wholesale) — the UK’s fastest-growing solar distribution business — we are well positioned to scale deployment and deliver real value to businesses nationwide.”
ASSET FINANCE SHIFT
The funding facility reflects a broader shift in the asset finance sector from transactional lending to outcome-driven partnerships. Under the PPA structure, clients pay only for the energy they use — at a discounted and predictable rate — with full support from HDM to maximise output from their system.
Andy Craggs, head of green energy finance SME lending at Paragon Bank, said the lender was keen to back a model that delivers on both commercial and environmental fronts.
“Finding a way to unlock clean sustainable energy in the SME space is essential for the UK, and so Paragon is proud to have partnered with HDM Energies; a business leading the way in the clean energy transition,” he said.
“Their work is already delivering substantial commercial benefits, providing solar solutions to a wide range of sectors including manufacturing, leisure and hospitality, education and community organisations. These installations are not only helping businesses meet their sustainability targets but are also generating immediate and tangible cost savings.”
He added that the initiative is a powerful demonstration of how net zero strategies can drive business advantage, with strong potential for expansion across sectors.
