In the UK, PPAs offer a powerful opportunity for businesses to access renewable energy, typically solar, without any upfront capital investment. But not every site or organisation is automatically eligible.
This guide answers key questions about site suitability, pricing, and the end-to-end process for structuring a successful PPA.
Let’s break down what makes a site suitable and how your business can benefit from fully funded clean energy.
Ideal Eligibility Criteria #
Medium to Large Energy Users
- Sites using more than 50,000 kWh/year are typically viable, though larger consumption (>100,000 kWh/year) improves the economics.
Long-Term Site Tenure
- Ideally, owner-occupied premises or tenants with at least 10–25 years remaining on the lease.
Daytime Consumption Profile
- Sites with high daytime energy usage, such as manufacturers or schools, see a greater benefit.
Roof or Land Availability
- Unshaded roof space (south-facing preferred) or adjacent land for ground-mount systems.
- If the site is not ideal for on-site generation, off-site or virtual PPA may still be an option.
Businesses With Multiple Sites
- Support for multi-site portfolios, including retail chains, hotel groups, and councils, is available
Good Credit Standing
- As PPAs are long-term contracts (10–25 years), credit checks are required for the off-taker (the business purchasing the energy.
- Manufacturing and processing
- Warehousing and logistics
- Data centres and IT facilities
- Supermarkets and retail parks
- Universities and academies
- NHS trusts and public sector sites
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What Information Is Required to Price a PPA in the UK? #
To provide a tailored PPA offer, we require detailed technical and financial information about the site and client. This allows us to size the system, estimate savings, and assess risk for funders.
 Energy Consumption Data
- Half-hourly data from your energy supplier or via your smart meter
- At least 12 months to establish seasonal and peak patterns
Energy Tariff Details
- Current electricity supplier, contract terms, unit rates, and standing charges
- Breakdown of day/night rates for more accurate savings modelling
Site Information
- Building plans or photos of the roof area
- Address and grid MPAN (Meter Point Administration Number)
- Site surveys for roof load assessments
Company Information
- Legal entity details
- Latest filed accounts or a credit rating report
- Preferred contract length and escalation structure (e.g., fixed or RPI-linked)
Sustainability Goals
- Net-zero commitments or carbon reporting targets
- Scope 2 emissions reductions as part of ESG strategy
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Once this data has been collected, a PPA proposal will be developed, including estimated savings, the tariff rate, and a summary of system performance.
What Factors Influence a UK PPA Price? #
PPA rates are tailored to each site and depend on both physical and commercial factors. The price reflects the cost to build, finance, operate and maintain the system over the contract term.
Solar PV System Size
Larger systems (>250 kWp) benefit from economies of scale
However, the system should not exceed on-site usage (no export excess)
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Solar Resource (Location)
- Southern England and South Wales have the highest irradiance
- Shading, roof pitch, and orientation also affect yield
Installation Complexity
- Structural work, asbestos removal, or remote locations can increase the cost
Electricity Tariffs
- Higher current tariffs mean greater savings, enabling a more competitive PPA price
Contract Length
- Longer PPAs (20–25 years) usually offer the lowest starting price
- Some clients prefer shorter terms with a buyout option
Inflation Assumptions
- UK PPAs can be fixed or escalated (e.g., 2.5% per annum or RPI-linked)
- Indexation helps match long-term maintenance and finance costs
Pricing Overview: Fixed vs Variable PPAs #
A Solar Power Purchase Agreement (PPA) grants businesses long-term access to solar-generated electricity without any upfront investment. One of its most compelling advantages is the transparency and predictability it affords in energy budgeting.
Fixed-price PPAs lock in a stable cost per kilowatt-hour (kWh) for the entire term of the agreement—typically 10 to 25 years. This ensures businesses benefit from price certainty and protection against market volatility greenshieldgroup.co.ukWikipediathelogicalgroup.co.uk.
Variable-price PPAs, on the other hand, align your energy costs with market trends. You may pay less when energy prices fall and slightly more when they rise—but you still enjoy a pre-agreed discount or floor price, helping maintain long-term cost benefits while still capitalising on market dips
By defining a set (fixed) or index-linked (variable) cost per kWh, a PPA removes the uncertainty of fluctuating utility prices. Businesses gain clear visibility into their energy costs over the contract duration, enabling smarter financial planning and forecasting without having to guess, “What will energy cost us in five or ten years?”
Can Battery Storage or Other Technologies Be Included? #
Yes. We can design and finance fully integrated clean energy systems that go beyond a solar generation.
Battery Energy Storage Systems (BESS)
- Stores excess solar for use in the evening or during peak grid charges
- Enables participation in grid balancing services and energy arbitrage
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EV Chargers
- Commercial EV charging infrastructure can be bundled into the PPA model
- It helps future-proof fleets or enable employee charging
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Hybrid Generation (Solar + CHP
- Combined heat and power systems may be integrated into industrial sites
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All technologies can be delivered under a single contract with no capital expenditure, often referred to as a “fully-funded solution.”
How Long Does It Take to Arrange a PPA in the UK? #
We aim to make the PPA journey as streamlined as possible, though timing depends on site complexity, legal reviews, and DNO (Distribution Network Operator) approvals.Â
Typical UK PPA Timeline:
| Stage | Timeframe | Details |
|---|---|---|
| Initial Consultation | 1–2 weeks | Site review, data collection, installer input |
| PPA Proposal Issued | 1–2 weeks | Energy modelling, financial modelling, savings summary |
| Credit Review & Heads of Terms | 1–3 weeks | Soft credit check, basic legal review, HoT agreement |
| PPA Contract Negotiation | 3–6 weeks | Legal counsel review and finalisation |
| DNO Application & Approval | 4–12 weeks | Connection application to local DNO |
| Installation & Commissioning | 6–16 weeks | Based on system size and contractor availability |
How Are PPA Savings Calculated for UK Businesses? #
The main appeal of a PPA is that it enables a business to purchase renewable electricity at a lower rate than its grid tariff, often with no upfront cost. But how are those savings calculated?
PPA Rate vs Grid Rate
- Savings = (Grid unit rate – PPA unit rate) × Annual on-site solar generation
- E.g., If the grid rate is £0.28/kWh and the PPA is £0.18/kWh, savings = £0.10/kWh × total annual generation
Consumption Match
- On-site consumption maximises savings. Exported energy (when generation exceeds consumption) is typically sold to the grid at a lower rate, thereby reducing the savings potential.
Fixed or Indexed Escalator
- Most PPAs have a modest price escalator (e.g., 3% annually) while grid prices rise unpredictably. This long-term price stability protects businesses from the volatility of wholesale markets.
Demand Charge Reduction
- Solar + battery storage setups can reduce peak demand or triad charges (where applicable), further enhancing value.
Avoided Non-Commodity Costs
- Generating power on-site helps avoid some distribution and environmental charges built into your electricity bills.
PPA Cost Structure: What's Included in the Rate? #
The PPA rate is not just the cost of electricity, it’s an all-inclusive price that covers:
Design & Engineering
- Site surveys, system design, structural assessments
Equipment Supply
- Solar panels, inverters, mounting systems, BESS (if included)
Installation
- Labour, project management, safety compliance, electrical works
Grid Connection
- G99/G100 applications, switchgear upgrades, DNO communication
Ongoing Operations & Maintenance (O&M)
- Annual inspections, cleaning, and performance monitoring
Insurance & Warranties
- Public liability, equipment warranties (up to 25 years), underwritten performance guarantees
Asset Management & Financing
- Fund administration, investor returns, legal compliance
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This “as-a-service” model means the client pays only for the electricity used, with no separate maintenance or servicing costs throughout the contract.
Legal Structure of a PPA in the UK #
A PPA is a long-term commercial contract between the energy generator (typically an SPV owned by the funder) and the business purchasing the electricity (the off-taker).
PPA Agreement
- Defines unit rate, escalation, contract length (typically 15–25 years)
Includes terms for a buyout, early termination, and performance guarantees
Roof or Land Lease
- Grant of rights to install, access, and maintain equipment for the duration of the PPA
Usually structured as a “licence to occupy” or lease with limited liabilities
Connection & Grid Approvals
- DNO approvals are required for export; G99 or G100 compliance is mandatory
Insurance & Indemnities
- The installer and funder typically carry construction and operational insurance
The client has no exposure to capex or equipment risk
Exit & Buyout Clauses
- Most PPAs include a buyout option, allowing the client to purchase the system outright after a specific period
Legal templates adhere to industry-standard frameworks, such as REPD, BESA, or fund-specific agreements, and are structured to be non-invasive to existing site operations.
What Happens After Installation? Support, Monitoring, and Reporting #
Once the system is operational, support doesn’t stop. Ongoing performance and transparency are crucial to the long-term success of PPAs.
Remote Monitoring
- 24/7 tracking of energy generation, uptime, faults, and site performance via secure online portals
Annual Reporting
- Generation reports, COâ‚‚ savings, PPA invoices, and ESG documentation
- Supports compliance with SECR (Streamlined Energy & Carbon Reporting)
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Operations & Maintenance (O&M)
- Preventive and corrective maintenance are included in the PPA rate
- Panel cleaning, inverter checks, cable inspections
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Performance Guarantees
- Output guarantees typically 90–95% of forecasted yield over the term
- Underperformance is often backed by insurance or financial compensation
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Client Engagement
- Dedicated account manager for all queries
- Optional system dashboard for internal use, CSR reporting, or PR
How to Get Started with a UK Commercial PPA #
We’ve streamlined the process to help you go from enquiry to installation with clarity and confidence. Here’s how to start the journey.
Initial Consultation
- Book a discovery call with our commercial team or submit your project via our online PPA enquiry form.
- We’ll assess site suitability and walk you through the model.
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Data Collection
- Provide basic site details, MPAN, recent energy bills, and company information.
- Upload any existing surveys or site photos to speed up the technical assessment.
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Technical Review
- We’ll conduct a desktop feasibility study using tools like PV*SOL or PVSyst to model generation and savings.
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PPA Proposa
- You’ll receive a fully costed proposal including PPA tariff, estimated savings, system size, layout, and a draft term sheet.
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Credit Assessment
- A soft credit check is done to ensure the project meets underwriting requirements. This doesn’t impact your credit score.
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Legal Review
- Draft agreements (PPA and Roof Licence) are shared with your legal team for review. We can offer standard templates to reduce negotiation time.
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DNO & Approvals
- We submit grid connection applications to the DNO and handle all permitting and planning if required.
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Installation
- Once approved, our installation partners complete the system under CDM and NICEIC compliance, typically within 4–12 weeks, depending on the system size.
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Commissioning & Billing
- After the final sign-off, billing begins. You only pay for what you use, with complete visibility through your online dashboard.
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Green Shield Group can handle everything from funding to installation to ongoing support, so you can focus on running your business.
Conclusion: Is a PPA Right for Your Business? #
Suppose your business consumes a significant amount of electricity, and you’re looking to reduce costs, carbon footprint, and risk exposure. In that case, a PPA is a powerful tool for achieving all three objectives without any capital outlay.
With flexible terms, fixed pricing, and a no-hassle process, PPAs offer a win-win for forward-thinking organisations that want to decarbonise operations while preserving capital.
Whether you’re an installer seeking to unlock more opportunities or a business looking to achieve energy independence, our PPA platform is here to help you deliver real, measurable impact.
PPA FAQs #
1. Can we install EV chargers under the same PPA?
Yes, EV charging infrastructure can be integrated into your PPA deal, especially if you’re transitioning to electric fleets or offering public charging.
2. Will I need planning permission for a rooftop solar PPA?
Not usually. Most rooftop systems are classed as permitted development. However, planning may be required in conservation areas or for ground-mounted systems.
3. What happens at the end of the PPA term?
You typically have three options: (1) extend the PPA at a reduced rate, (2) buy the system outright, or (3) have it removed at no cost.
4. Can I combine multiple sites under a single PPA?
Yes. We support portfolio PPAs, where one business owns or leases multiple properties, which is beneficial for councils, NHS trusts, or retail chains.
5. How are PPA tariffs reviewed over time?
Your PPA rate is either fixed or escalates annually (usually linked to inflation). Complete pricing transparency is included in your contract.
