Category: Technical

Performance Ratio Guarantees in Solar PPAs

Performance ratio (PR) is the metric that defines whether a PPA system is generating as promised. What good PR guarantees look like in 2026.

Performance ratio explained

Performance ratio (PR) is the ratio of actual energy output to the theoretical maximum the system could have produced. It captures real-world losses — inverter efficiency, soiling, cable losses, temperature derating, downtime — in one number.

What good looks like in 2026

PR band	Quality assessment
82%+	Excellent — well-designed, well-maintained
78-82%	Good — typical UK target
74-78%	Marginal — investigate
Below 74%	Material problem — design, install or maintenance issues

How PR guarantees work

Most providers offer a PR guarantee of 78-82% averaged over 12 rolling months. Below target = make-good payment. Above target = no extra payment to you (asymmetric).

Watch-outs in the contract

• How PR is calculated — IPMVP Option B is gold standard
• Reference irradiance source — local pyranometer vs satellite vs default
• Force majeure exclusions — too broad and you have no protection
• Dispute resolution mechanism
• Independent assessor right (with cost cap)

Make-good payment options

• Tariff reduction next quarter
• Direct cash payment (rare)
• System remediation (provider must fix the issue)
• Combined remediation + tariff reduction