Guide · Solar PPAs explained
What Is a Power Purchase Agreement?
A PPA is a long contract to buy electricity at an agreed price. Here is how the two kinds work, who does what, what stays fixed and what happens at the end.
Nothing to pay up front, not even a deposit. Fixed for 15 years.
The short answer, first
What is a power purchase agreement?
A power purchase agreement (PPA) is a contract to buy electricity at an agreed price from whoever makes it, for an agreed number of years. You are not buying the power station. You are buying the power, one unit at a time. The unit is the kWh (kilowatt hour), the same one that appears on your electricity bill.
There are two kinds. A corporate PPA is how very large buyers contract for power from a wind or solar farm somewhere else. An on-site solar PPA puts panels on your own roof or land, paid for by someone else, and you buy what they make. If you run a business, farm, charity or school, the second kind is the one you want. It is also the one we arrange.
Two kinds
Corporate PPA or on-site solar PPA: which is which
Same name, very different deals. Most of what you read online about PPAs is about the first kind.
| What to compare | Corporate PPA | On-site solar PPA |
|---|---|---|
| Where the power is made | At a wind or solar farm, often a long way off | On your roof or your land |
| Who signs | A large energy user and the company that owns the farm | A business, farm, charity or school, and a funder |
| How the power arrives | Through the grid, with a supplier in the middle (a sleeved PPA), or not at all (a virtual PPA) | Straight into your building, on your side of the meter |
| How long it runs | Often 10 years or more | Across the market, 10 to 25 years. Ours is 15 |
| What the buyer gets | Certificates (called REGOs) that show the power was renewable | Cheaper power from the first day, made on site |
| Who it suits | Large buyers with big loads or many sites | One site with a roof, a daytime load and a three-phase supply |
Corporate PPAs are normally built for large buyers, which is why a farm, a school or a care home will almost never be offered one. An on-site solar PPA is the version that fits a single site.
Three set-ups
The three kinds of PPA you will see, in plain words
Two of them need a wind or solar farm. The third needs only a roof. See our solar PPA for how we run it.
Sleeved PPA
A farm sells you its power and an energy supplier sits in the middle. The power travels through the national grid to your meter, and the supplier charges a fee for handling it.
Virtual PPA
No power moves between you. It is a money deal. If market prices rise above the agreed price, the farm pays you the difference. If they fall below it, you pay. You still buy your power from your supplier as usual.
On-site solar PPA
The panels sit on your roof or land and feed your building directly. Someone else pays for them. This is the kind we arrange, and the rest of this page is mostly about it.
Our solar PPAWho does what
Who is in an on-site solar PPA, and what each one does
Six names turn up. Only two of them sign the contract, but all six matter.
You, the host
You own or rent the site. You agree to buy the power the panels make at the agreed price. If you rent, the building owner has to agree as well.
The funder
Pays for the whole system and owns it until you buy it out (buy it from the funder). It rents your roof space under a roof lease and never owns your roof or building. Ours is a UK company. Its projects are paid for by a UK bank, and the systems are insured. You meet them on your proposal call.
The installer
Fits the panels and the equipment. Our installation partners are MCS registered, and RECC and NAPIT accredited. Both our case-study customers stayed open while the fitting went on.
The grid operator
The DNO (district network operator) runs the local power lines. It checks that the local transformer can take the power you send back. We make the application and pay the fee.
Your energy supplier
Stays exactly as it is. You keep your supplier and your contract. You just buy less from them.
Us, in the middle
We arrange it and we are your one contact from first call to first bill. We are only paid when your system is switched on.
Day to day
What happens on an ordinary day once it is switched on
A PPA changes who owns the panels. It does not change how your building gets its power.
The panels make power
In daylight the panels make electricity. An inverter (the box that turns it into power your building can use) sits between the panels and your supply.
Your building uses it first
Whatever the roof makes goes to your lights, machines and fridges before anything else.
The grid fills the gap
When the roof cannot cover demand, you draw from the grid as normal. Spare solar power goes to the grid and is sold.
One direct debit for the solar
You pay a monthly direct debit for the solar kWh at the PPA price, and you can track it live. The grid kWh stay on your usual bill.
What is fixed
What stays fixed in a PPA, and what does not
The price clause is the part to read twice.
Fixed
- The price per kWh. In ours it is fixed for the full 15 years, so it does not rise with inflation or the price cap. Your price per kWh will never change.
- The length of the term, written into the contract.
- The buy-out price for every year. It is printed up front and falls each year to £1 at year 15.
- Who looks after the system. The provider monitors, maintains and cleans it for the whole term, with cleaning every 6 to 12 months.
Not fixed
- How much the panels make. It depends on the weather and the year. Your proposal states what to expect, and nothing is guaranteed. If the panels make less, you pay less.
- The price of the power you still buy from the grid. That stays with your supplier and moves as it always has.
- Your total bill. It depends on how much power you use and when you use it.
- The price in other PPAs. Some start low and rise every year with an index (a published measure of prices, such as inflation). Always ask whether a price is fixed or index-linked.
The catch, named first
How can solar cost nothing up front? Here is how the money works
It sounds too good to be true, and almost everyone says so. So here is who earns what. The funder pays for the system. It then earns from two things: the solar power you buy at the fixed price, and any spare power it sells to the grid. Over 15 years that pays back the system and a bit more. It makes money only if the panels generate, so it wants them working as well as you do.
There are real conditions, and we say them before you ask. The funder runs a soft credit check on the business, which leaves no mark on your file. It leases your roof space. The first three papers do not bind you and stay open for 10 working days, so you can read everything before anything holds you.
Crest Community Centre in Llandudno Junction paid 37p per kWh before. It now pays 18p for the solar it uses, and its proposal showed £4,739 saved in year one. See a real proposal
Year 15
What happens at the end of a PPA
Every PPA ends, and the contract should say how before you sign. Across the market the usual routes are to extend, to buy the system or to have it removed. In ours there are four:
- Buy the system for £1
- Agree a new price per kWh and carry on
- Stay on the same price for five more years, then buy it for £1
- Pay to have it taken away
The panels carry a 30-year warranty, so a £1 buy-out leaves at least another 10 years of power from panels you own. You can also buy the system out earlier, at any time, from the printed schedule. If you sell or move, the contract can pass to the new owner or occupier at the same price.
Does it suit you
Is an on-site solar PPA right for your site?
Most of this is checked from a map and a recent bill. If you are unsure, just ask.
It suits a site that
- Uses a lot of power in the daytime, such as a farm, shop, factory, school, care home or charity.
- Has a three-phase supply (the stronger kind of supply most businesses and farms have).
- Has room for at least 20 kW of panels, which is about 45 to 50 panels (kW is the size of a system).
- Can send 12 months of usage, ideally half-hourly smart-meter readings, or a year of bills in kWh.
- Has an owner who agrees, if you rent.
It probably will not work if the site
- Is a home. We do not do homes, and no PPA funding exists for them.
- Has a single-phase supply, which caps a system at about 15 to 17 kW, below our 20 kW minimum. A house has one of these.
- Has too little roof or land for 20 kW, or the space is badly shaded.
- Already has solar.
- Uses almost all its power at night. Panels work in daylight, so the numbers may not stack up.
- Is in Northern Ireland. We do not work there.
What happens next
From first call to first bill, in about five to six weeks
That is the timing in North Wales, where the grid operator takes two to three weeks. It can take up to 12 weeks where the grid operator is slower.
A call within 24 hours
Dave calls you back and arranges a face-to-face or Zoom talk. No forms to fill in beyond the first few questions.
Roof and bills checked
We look at your roof from satellite images and at the 12 months of usage data you send. This takes a week or two.
A written proposal in up to 5 working days
The funder builds it for your site and we go through it on a video call with the funder and the equipment partners there. It is never emailed cold.
Papers, grid approval, fitting
Three first papers are not binding and stay open for 10 working days. Then the contract, a full site survey, the grid application, the fitting and switch-on.
£0 up front
Our funding partner pays for the system. Not even a deposit
Fixed for 15 years
Between 16p and 23p per kWh today, depending on the site (September 2026)
NAPIT
Our installers are accredited
Our installation partners are MCS registered, and RECC and NAPIT accredited
One person to call
Dave handles the funder, the installer and the grid for you, first call to first bill
In their own words
Two customers who wondered about the catch as well
“I was pretty sceptical initially because you never get anything for free in this life. But once Dave broke down the detail and explained to me how it would benefit Crest as an organisation, it became quickly to me a bit of a no-brainer.”
“I'll be honest, I was a bit sceptical at first. It sounded too good to be true.”
Keep reading
Where to go next
A real proposal
Crest Community Centre's figures, line by line, so you can see what yours will look like.
See a real proposalHow a PPA works, step by step
From the first call to the first bill, with the timings.
See how it worksThree-phase and the grid
What a three-phase supply is and why the grid operator has to check your site.
About the grid checkRented buildings and 2031
The government has confirmed larger rented buildings will need an EPC B (a high energy rating) from 2031. Solar can help.
About EPC B and 2031PPA or buying outright
Buying can be the better deal for some sites. This is an honest comparison.
Compare the twoQuestions
Power purchase agreement questions, answered
What is a power purchase agreement?
A power purchase agreement (PPA) is a contract to buy electricity at an agreed price, for an agreed number of years, from whoever makes it. You buy the power, not the equipment. In an on-site solar PPA the panels sit on your roof and someone else pays for them.
What is the difference between a corporate PPA and an on-site solar PPA?
A corporate PPA is normally for large buyers who contract for power from a wind or solar farm somewhere else. The power travels through the grid, or the deal is purely financial. An on-site solar PPA puts the panels on your own site and feeds your building directly.
Who are the parties to a solar PPA?
The business that hosts the panels, and the funder that pays for and owns them. An installer fits the system, and the local grid operator checks the connection. We sit in the middle and handle all of it, so you deal with one person.
Is the price in a PPA always fixed?
No. Some PPAs start low and rise every year with an index, such as inflation. Ours is fixed for the full 15 years, between 16p and 23p per kWh as of September 2026, depending on your site. Always ask which kind you are being offered.
How can a PPA cost nothing up front?
The funder pays for the system, then earns from the solar power you buy and from spare power sold to the grid. Over 15 years that pays back the system and a bit more. It only earns when the panels generate, so it wants them working.
Do I have to change electricity supplier?
No. Your supplier and your contract stay the same. You simply buy less from them, and pay a separate monthly direct debit for the solar.
What happens at the end of a PPA?
In ours you choose from four options. Buy the system for £1, agree a new price and carry on, stay on the same price for five more years and then buy it for £1, or pay to have it removed. The panels carry a 30-year warranty.
Can I get out of a PPA early?
You can buy the system at any time from a price list printed in your proposal, and the price falls each year. If you sell or leave the building, the deal can pass to the new owner or occupier at the same price.
Does a solar PPA put my roof at risk?
No. The funder rents the space on your roof under a roof lease and never owns the roof or the building. It also runs a soft credit check on the business, which leaves no mark on your file. We tell you both up front.
Which sites can have an on-site solar PPA?
You need a three-phase supply, room for at least 20 kW of panels and 12 months of electricity data. The site must not have existing solar. If you rent, the owner must agree. It is for businesses, farms, charities, schools and care homes, and not for homes.
How long does a solar PPA take to set up?
About five to six weeks from first call to switch-on in North Wales. It can take up to 12 weeks where the grid operator is slower. Your written proposal comes back in up to 5 working days.
Where we work
Based in Colwyn Bay, working across North Wales and beyond
We work across North Wales, Mid Wales, Cheshire, the Wirral, Merseyside and Shropshire. Further afield, our funding partner has approved installers across Great Britain.
Find out if a solar PPA works for your site
Send your postcode and a recent bill. We check your roof on a map and tell you quickly. It costs nothing, and nothing you sign at the start ties you in.