Category: Mechanics

Virtual PPA vs On-site PPA: When Each Wins

Virtual (synthetic) PPAs and on-site PPAs solve different problems. Decision framework with example p&l for each.

Two products with the same name, different problems

On-site PPA: generator builds solar on your roof. Virtual PPA: financial contract referencing a wholesale price. Both called "PPA" — totally different mechanics.

When on-site wins

• Single site with 200kWp+ of useable roof
• Long site tenure (15+ years)
• Simple business — single-site SME, regional manufacturer
• Want directly-attributable kWh savings
• Strong daytime load profile

When virtual wins

• Investment-grade corporate, >£10m annual electricity spend
• Multi-site or geographic mismatch with solar resource
• Treasury sophistication (IFRS 9 hedge accounting capability)
• Want pure financial hedge against wholesale prices
• Need REGO certificates separate from any specific site

Side-by-side

	On-site PPA	Virtual PPA
Physical kWh delivery	Yes	No
Site survey	Required	Not relevant
Year-1 tariff	9-18 p/kWh	£42-55/MWh strike
System size	50kWp-5MWp	10MWp+ typical
Counterparty	Local SPV	Wholesale generator
Term	15-25 years	10-15 years
Accounting	Operating expense	Hedge accounting (IFRS 9)
Roof rights needed	Yes	No