Is Free Solar Really Free? What a Zero-Capex PPA Costs
"Free solar" means zero capital, not free electricity. What a zero-capex PPA costs over its term, what you give up, and how to judge the offer.
"Free solar panels" is a familiar pitch in commercial energy, and it is not a lie — but it is not the whole truth either. What is free is the build: under a power purchase agreement the provider pays for the system, owns it and maintains it. What you pay instead is a tariff for every unit the array supplies, for 15 to 25 years. The question is not whether the deal is free, but whether it is cheaper than the alternatives.
What "free" actually covers
- Design, equipment and installation — paid by the provider.
- Operation, maintenance, monitoring and insurance of the system — normally the provider's cost for the term.
- Replacement of failed parts — usually the provider's, subject to the contract.
What it does not cover is the electricity. You buy every unit the array supplies at the agreed tariff, and the rest of your power still comes from your supplier at your normal rate.
What a zero-capex PPA costs over its term
The tariff is where the cost lives, and the escalator decides how much. A 12.0 p/kWh tariff held flat stays at 12.0 p/kWh; the same tariff rising 2% a year reaches 17.48 p/kWh by year 20. Against a delivered grid price that DESNZ put at an average of 24.14 p/kWh for non-domestic users in the first quarter of 2026, both can be good deals — but they are very different deals, and only one of them looks the same in year one and year twenty.
Grid price: DESNZ Quarterly Energy Prices, table 3.4.2 (non-domestic, including CCL, excluding VAT), Q1 2026, last updated 30 June 2026. Escalator arithmetic is modelled (12.0 × 1.0219). Verified 26 Sep 2026.
What you give up
- The asset. You do not own the system, so you cannot sell it, borrow against it or change it without the provider's agreement.
- The tax reliefs. Capital allowances follow whoever incurred the capital expenditure, which is the provider. For an owner, solar is special-rate plant: it does not qualify for full expensing, and the 100% route is the Annual Investment Allowance, capped at £1m a year.
- Some control of the roof. The provider has rights to keep its system in place for the term, which affects roof works, extensions and the sale of the building.
Capital allowances: HMRC — HS252 (2026) and GOV.UK — Annual Investment Allowance. Verified 10 Sep 2026.
How to judge a "free solar" offer
- Compare the tariff with your own grid price, not a national average, and look at the final year as well as the first.
- Check who keeps the export income. Units your site cannot use are exported; unless the contract assigns that income to you, it stays with the provider.
- Read the exit terms. A buy-out schedule and fair assignment on sale are worth more than a fraction of a penny off the headline tariff.
- Look at who stands behind the offer. Reputable solar PPA providers will show you the company that signs, the fund behind it and the installer doing the work.
For a site with steady daytime demand and no appetite to spend capital, a zero-capex PPA is often the right answer. It is simply not free — and the offers worth signing are the ones that are open about that.
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