How Financed Purchase and Energy as a Service Work

If you would rather not buy a solar system outright, there are two ways to spread the cost, a Financed Purchase or Energy as a Service. They work very differently, mainly in who owns the system and how you pay for it. This guide explains how each one works so you can see which suits you.

For what a system costs before any financing, see our guide to solar prices.

The biggest difference between the payment options comes down to ownership. With a Cash Purchase or a Financed Purchase, the system is yours, so you own it from day one and keep the long-term savings once it is paid off. With Energy as a Service, the installer owns and maintains the system, and you pay a monthly fee to use the power it produces.

Owning tends to give the lowest cost over the life of the system, while subscribing removes the upfront cost and hands the maintenance to someone else. Neither is automatically better, and it comes down to your budget and how involved you want to be.

A Financed Purchase, sometimes called a solar loan, turns a large upfront cost into smaller monthly payments while you still own the system. You put down a deposit, usually a percentage of the total price, then repay the balance over a set number of monthly instalments, typically 6 to 12 months. Once the balance is cleared, the system is fully yours and your only ongoing cost is basic upkeep.

For many households the monthly repayment is close to what they were already spending on fuel, so the switch does not stretch the budget as much as it first appears.

A Financed Purchase makes sense if:

• You want to own the system without paying the full amount upfront.
• You are happy to make fixed monthly payments for a set period.
• You want the lowest long-term cost once the balance is cleared.

With Energy as a Service, the installer designs, installs, owns and maintains the system, and you pay a fixed monthly subscription to use the power. There is no large upfront cost, and because the installer is responsible for the equipment, maintenance and repairs are handled for you.

The monthly fee is set to come in below what you would otherwise spend on fuel or an unreliable grid, so you can save from the first month. You do not own the system, so you will not build up the same long-term savings as an owner, but you also carry none of the maintenance.

Energy as a Service makes sense if:

• You want to switch to solar with nothing to pay upfront.
• You would rather not own or maintain the equipment yourself.
• You value predictable monthly costs and immediate savings.

Here is how the three options line up on the things that matter most:

	Cash Purchase	Financed Purchase	Energy as a Service
Upfront cost	Full price, around ₦5M for a typical home	A deposit, a percentage of the total	₦0
Who owns the system	You, from day one	You, from day one	The installer
Monthly payment	None after purchase	Instalments for 6 to 12 months	Ongoing subscription
Maintenance	Your responsibility	Your responsibility	Handled by the installer
Best for	The lowest long-term cost	Owning without a large upfront cost	No upfront cost and no maintenance

Figures are illustrative and depend on your system size, location and the quotes you receive.

There is no single best option, only the one that fits your budget and how much you want to be involved. If you have the capital and want the lowest cost over time, a Cash Purchase is hard to beat. If you want to own the system but would rather not pay everything at once, a Financed Purchase gives you that. If you want solar with nothing upfront and no maintenance to think about, Energy as a Service is the simplest route.

The easiest way to decide is to see the numbers for your own home. You can compare your financing options in more detail, or compare quotes to see the upfront cost, monthly payment and total for each option side by side.