Solar PPA: Solar Panels for Your Business With No Upfront Cost

What a rooftop solar PPA is

A PPA is a contract to buy electricity. In an on-site solar PPA, the generator is on your own roof or land. Solar Energy UK describes the developer arranging the design, permissions and installation at little to no cost to the customer, who pays no upfront capital, and supplying the electricity at a reduced tariff that can be fixed for the length of the contract (Solar Energy UK).

The government is testing the same model for schools: the DfE's pilot describes a private provider financing, installing and maintaining panels "at no upfront cost to the school or college", with the school buying the electricity at a pre-agreed rate, usually below standard grid tariffs (DfE). See solar for schools.

Solar Energy UK notes that private wire arrangements, where a generator next door supplies you by its own cable, are more complex and remain relatively rare. Offsite "corporate" PPAs, where a business contracts for power from a solar or wind farm elsewhere, are a different product and not what this page covers.

PPA, lease or buy: what each means for your business

Capital allowances go to the person who incurs the expenditure and owns the plant as a result (section 11); solar panels are special rate plant (HMRC). So the tax relief that shortens a buyer's payback stays with the provider under a PPA. See capital allowances on solar panels and commercial solar payback.

Who owns and maintains the panels

Under a PPA the provider keeps responsibility for the system. Solar Energy UK says the developer remains responsible for operations and maintenance for the contract's duration (source), and the DfE's pilot says the same for schools. Your contract should say who insures the system, who pays for roof work that means the panels have to come off, how long repairs can take, and what you are paid or charged if the system makes less than expected.

Contract length, price per kWh and what happens at the end

• Length. Solar Energy UK: usually 10 to 25 years.
• Price. Negotiated for each contract. Check whether the rate is fixed, rises each year by a set amount or follows an index, and compare it with what you pay now.
• What you must buy. Whether you pay only for what you use, or for everything the system makes, including what is exported.
• At the end. Solar Energy UK says the customer can remove the system, extend the PPA or buy the system. Ask what a buy-out would cost.

We don't publish PPA prices: each one is negotiated for the site, and we have no source we would stand behind.

What happens if you sell or leave the building

A PPA is tied to the site for a long time, so read this part closely. Ask whether the agreement passes to a buyer or a new tenant, whether you can buy the system out early and at what price, and what you owe if you end it early. If you rent, your landlord will usually need to agree to the PPA and to the provider's access for the whole term, and a lease shorter than the PPA is a problem to solve before you sign.

Which sites PPA providers look for

Solar Energy UK lists what makes a site suitable (source):

• A steady daytime demand. A demand profile that matches when the panels generate.
• Space. Enough roof or land for a system worth installing.
• A grid connection. One that can take the system.
• Creditworthiness. The provider is relying on you to buy the power for many years.

Whether you buy or choose a PPA, the survey is the same: the roof, the structure, the supply and your use of power. Book a free survey and the installer can tell you whether your site suits either route.