Compliance

TCFD and Solar PPAs

TCFD-aligned disclosure has been mandatory for LSE-listed and large private UK companies since 2022. A solar PPA is a Scope 2 emissions reduction lever with audited delivery.

What this means

TCFD-aligned disclosure has been mandatory for LSE-listed and large private UK companies since 2022. A solar PPA is a Scope 2 emissions reduction lever with audited delivery — providing the kind of concrete, measurable evidence TCFD reporting requires.

Actions to take

• Baseline current Scope 2 emissions using market-based and location-based methods.
• Calculate Scope 2 reduction from a planned PPA with REGO transfer.
• Disclose contracted PPA capacity in next TCFD report.
• Track actual delivery against modelled in subsequent reports.

A disclosure framework, not a target

TCFD — the Task Force on Climate-related Financial Disclosures — asks companies to explain how climate change bears on the business in the language of financial reporting. It is built around four pillars: governance, strategy, risk management, and metrics and targets. In the UK it has been a legal requirement for LSE-listed companies and large private businesses since 2022. Importantly, TCFD does not order you to hit a number; it obliges you to disclose, credibly and consistently, what you are doing about climate-related risk and opportunity. That distinction matters, because it means a PPA earns its place as evidence rather than as a slogan.

Where a PPA lands in the disclosure

Under the metrics-and-targets pillar you report greenhouse-gas emissions, and a solar PPA acts squarely on Scope 2 — the emissions attached to the electricity you purchase. Because the array's output is metered and, where a REGO transfer is in place, the renewable attribute is documented, the reduction is auditable rather than merely asserted. It also reads well under the strategy pillar: a fixed or capped-escalator PPA is a tangible hedge against the transition risk of rising, carbon-priced grid power. One action, evidenced across two pillars.

Making the disclosure defensible

Weak TCFD reporting overstates the ambition and understates the method. Strong reporting shows its working.

• Baseline Scope 2 under both the location-based and the market-based methods.
• Model the reduction a REGO-backed PPA delivers against that baseline.
• Disclose contracted PPA capacity — not just intent — in the next report.
• Report delivered generation against the model in each subsequent year.

From commitment to contracted capacity

The line investors and auditors reward is contracted, not planned. Reaching it means understanding the deal on paper before you disclose it: read how an on-site PPA is structured, weigh it against ownership routes across the comparison pages, and — since a longer, well-covenanted contract firms up the emissions figure you can report — check what the off-taker covenant means for the term a funder will offer.

FAQs

TCFD and Solar PPAs FAQs

Can a solar PPA on its own deliver compliance?

Not on its own — but it's typically the highest-impact single lever, especially for MEES and Scope 2. Combine PPA with LED + insulation + heat-pump for full compliance pathways.

How long before compliance deadline should I sign a PPA?

12-18 months minimum. PPA contracts take 6-12 months to sign and build. Add 3-6 months for measurement and verification before the deadline assessment.

Do PPAs always include REGO transfer?

Most do — but it must be explicit in the contract. Some standardised retail-PPA structures don't transfer REGOs by default; specifically negotiate this if you need the green claim.