Paragon-backed solar scheme helps SMEs cut energy costs

A new rooftop solar initiative backed by Paragon Bank is helping SMEs reduce energy costs and carbon emissions without requiring upfront capital investment.

The scheme, launched in partnership with HDM Energies in July last year, is forecast to save participating businesses an average of £552,380 in energy costs over 25 years.

More than 100 organisations across the UK have already signed up to the programme, spanning sectors including education, agriculture, manufacturing, retail, care homes, charities and sports facilities.

Businesses participating in the initiative are also expected to collectively avoid more than 45,000 tonnes of carbon emissions over the lifetime of the solar panels – equivalent to removing more than 10,000 petrol cars from UK roads for a year.

Paragon said the scheme was designed to remove one of the biggest barriers preventing SMEs from adopting renewable energy solutions: the upfront cost of installation.

Under the model, Paragon finances the supply and installation of rooftop solar systems delivered by HDM Energies. HDM then enters into a Power Purchase Agreement (PPA) with each customer, supplying discounted fixed-rate renewable electricity directly to the business premises. Revenue generated through the energy supplied is then used to repay Paragon’s funding.

To date, Paragon Bank’s SME Lending division has deployed almost £5.3 million of funding through the initiative, with participating organisations projected to save more than £58 million in total energy costs.

Andy Craggs, Head of Green Energy Finance at Paragon SME Lending, said: “Seeing SMEs save on average over half a million pounds – a huge sum of money – shows just how transformative this scheme is for SMEs facing rising energy costs.

“The strong uptake across diverse sectors such as education, agriculture and manufacturing shows the wide appeal for simple, predictable and long-term clean-energy solutions. As a lender working with 16,000 UK SMEs, we’re proud to spearhead this initiative with HDM Energies to help businesses protect their energy and financial resilience.”

Dave Roberts, Managing Director at HDM Energies, added: “This scheme was designed to remove the barriers that stop SMEs from adopting solar.

“With no capital outlay, immediate cost savings and long-term carbon reduction, it’s clear why so many organisations are opting to join the programme. Our partnership with Paragon, a FTSE 250 lender with a strong track record and robust capital backing, enables us to deploy high-quality solar systems at scale, supporting significantly more businesses on their journey to net zero.”

One organisation already benefiting from the scheme is Bridlington CYP, a sports and youth centre that has significantly reduced its energy bills following installation.

Damien Grant, general manager at sports and youth centre Bridlington CYP, said: “For a project of this scale and the difference it’s making for us, the process couldn’t have been easier.

“Since the solar panels have been installed, our bills are about a third or a quarter of what they were before. Any savings we make get piled back into the club, so it supports the local community.”