Category: Legal

Change-in-Law Clauses in Solar PPAs

Change-in-law clauses determine who carries the cost when policy changes mid-contract. Anti-dilution, pass-through and force-majeure mechanics explained.

Why change-in-law clauses exist

A 25-year PPA spans 5 UK governments, multiple chancellors, and significant policy churn. Change-in-law clauses allocate the financial impact of that policy churn between off-taker and provider.

The three main pathways

Pass-through

Any new tax, charge or regulation that increases the provider's cost gets passed through to the off-taker via tariff uplift. Common but heavily limited by off-takers.

Equal sharing

Costs split 50/50 between off-taker and provider. The "fair" middle ground.

Bear and indemnify

Each party bears the cost of changes that affect them directly. Most off-taker-friendly but rare.

What changes most commonly trigger

• Climate Change Levy rate increases
• BSUoS / TNUoS structural reform (ongoing)
• REGO scheme changes
• SEG floor rate adjustments
• New emissions trading scheme costs
• Planning regulation changes affecting solar

What to negotiate

• Mutual change-in-law (not just provider-favourable)
• Materiality threshold (no pass-through for <5% impact)
• Disclosure obligations (provider must show calculation)
• Right to terminate if change-in-law triggers >15% tariff change