Comparison

Fixed vs RPI/CPI-linked PPA Escalator

PPA escalator types compared — fixed % vs RPI vs CPI vs zero. Modelling 15-year cumulative cost under each.

Side-by-side comparison

	Fixed escalator	RPI/CPI-linked
Year-1 tariff	13.5 p/kWh	12.5 p/kWh
Year-25 tariff	13.5 p/kWh (fixed)	26.2 p/kWh (RPI at 3%)
25-yr cumulative cost	£801,000	£1,099,000
Inflation hedge	No	Yes (rises with RPI)
Predictability	High	Lower
Provider preference	Slightly higher tariff	Often offered slightly lower
Best for	Strong covenants, certain forecasts	Off-takers wanting inflation hedge

When Fixed escalator wins

Fixed escalator typically wins when (a) you need zero upfront capital, (b) you want operations and performance risk transferred, (c) your business horizon doesn't extend to a 25-year capital commitment, or (d) you want speed to deploy.

When RPI/CPI-linked wins

RPI/CPI-linked typically wins when (a) you have capital and want the lowest 25-year cost, (b) you want to retain ownership of the asset and its long-term value, (c) you can manage operations in-house, or (d) you're constrained by structural reasons (e.g., procurement rules for public bodies).

FAQs

Comparison FAQs

Which option should I pick?

Fixed gives you certainty; inflation-linked feels safer if you believe grid power will keep rising at RPI+. Run both scenarios before signing. Run your specific numbers in our PPA calculator before deciding.

Can the two be combined?

Sometimes. SEG income always layers on top of either route. AIA / Full Expensing combine only with cash or self-finance. PPA + grant rarely stack — most grants exclude PPA structures.

Where can I read more about the underlying mechanics?

Our mechanics hub covers 10 deep-dives on PPA structure, pricing, escalators, term, end-of-contract, off-taker covenant, EPC, O&M and M&V.