Solar PPA cost & tariff by system size — UK 2026
Eight size bands from 50kWp small commercial to 10MWp+ utility-scale. Each page covers indicative capex (cash purchase reference), PPA year-1 tariff, expected annual generation and audience.
Solar PPA rates in the UK: 9–20 p/kWh (2026)
What is a solar PPA rate?
A solar PPA rate is the price you pay per kWh for electricity generated on your own site by a system a provider funds, owns and maintains. In the UK in 2026 that rate runs 9–20 p/kWh in year one, against 21–25 p/kWh to import the same unit from the grid.
That 9–20 p/kWh band is the year-one range across the on-site rooftop sizes most UK commercial buyers actually sign — 50 kWp up to 2 MWp in the table below. Two things sit outside it: large ground-mount and very large rooftop schemes, which price lower, and utility-scale corporate PPAs, which are quoted in £/MWh rather than pence and price lower again. The rate buys kilowatt-hours and nothing else: under a PPA you pay no capital, you own no asset, and the provider carries the performance risk for the length of the term.
Grid import benchmark: 21–25 p/kWh for Medium to Extra Large non-domestic consumers (all-band average 24.14 p/kWh). Source: DESNZ Quarterly Energy Prices, table 3.4.2 (including CCL, excluding VAT), Q1 2026, published 30 June 2026. Re-verified 1 September 2026.
Solar PPA rates by system size
Rates fall as systems get bigger because the fixed costs of doing the deal — legal drafting, the site survey, metering and connection paperwork — barely change with size, so a larger array spreads the same overhead across far more kWh.
| System size | Capex (cash) | PPA tariff (year 1) | Annual generation | Typical contract term |
|---|---|---|---|---|
| 50kWp PPA | £42,000–£55,000 | 16–20 p/kWh | 47,500 kWh | 15–25 years |
| 100kWp PPA | £82,000–£105,000 | 14–18 p/kWh | 95,000 kWh | 15–25 years |
| 250kWp PPA | £200,000–£260,000 | 12–16 p/kWh | 237,500 kWh | 15–25 years |
| 500kWp PPA | £395,000–£500,000 | 11–14 p/kWh | 475,000 kWh | 20–25 years |
| 1MWp PPA | £750,000–£950,000 | 10–13 p/kWh | 950,000 kWh | 20–25 years |
| 2MWp PPA | £1.45m–£1.85m | 9–12 p/kWh | 1,900,000 kWh | 25 years |
| 5MWp PPA (ground-mount or large rooftop) | £3.5m–£4.5m | 8–11 p/kWh | 4,750,000 kWh | 25 years |
| 10MWp+ PPA (utility-scale) | £6.5m+ | £55–£75/MWh indicative (5.5–7.5 p/kWh) | 9,500,000 kWh | 10–15 years |
Year-1 indicative bands for an on-site PPA, published by SPPA as advisory guidance — not quotes. Generation assumes roughly 950 kWh/kWp (UK Midlands); southern England yields more and Scotland less. Your own rate depends on covenant, term, escalator, roof condition and how much of the output you consume behind the meter. Last reviewed 28 September 2026.
What an escalator actually costs over the term
Almost every PPA rate you will be quoted is a year-one number. The escalator — the annual uplift written into the contract — decides what you actually pay across the other nineteen years, and it is the largest thing a headline tariff hides. So here is the same opening tariff under three escalator structures, with the escalator as the only variable that changes.
| Escalator | Year-1 cost | Year-20 tariff | 20-year cumulative cost | Effective average rate | Cost of the escalator vs 0% |
|---|---|---|---|---|---|
| 0% (flat) | £57,000 | 12.00 p/kWh | £1,140,000 | 12.00 p/kWh | — |
| Fixed 2% | £57,000 | 17.48 p/kWh | £1,385,000 | 14.58 p/kWh | +£245,000 (+21%) |
| CPI-linked, modelled at 2.5% | £57,000 | 19.18 p/kWh | £1,456,000 | 15.33 p/kWh | +£316,000 (+28%) |
Illustrative modelling — not a quote, and not an observation of what the market charges. Assumptions, all shown so you can change them: a 500 kWp on-site system generating 475,000 kWh a year (9,500,000 kWh over the term), an opening tariff of 12.0 p/kWh — the mid-point of our 500 kWp band above — a 20-year term, generation held flat, and the uplift applied annually from year two. Money of the day, rounded to the nearest £1,000 and 0.01 p. The model does not discount the cashflows and does not apply annual panel degradation, both of which a provider's own model will include and both of which change the totals. Alter any assumption and every figure in the table moves.
The CPI assumption is doing most of the work — so here is the sensitivity
A CPI-linked escalator cannot be priced in advance, because nobody knows future CPI. The Bank of England's target is 2%; UK CPI ran at 2.9% in the twelve months to July 2026. The honest way to read a CPI-linked quote is therefore as a range, not a number:
- CPI at 2.0%, the Bank of England target — £1,385,000 over the term, year-20 rate 17.48 p/kWh. At target, a CPI-linked deal and a fixed 2% deal cost exactly the same, which is the sanity check on any provider who prices them differently.
- CPI at 2.5% — £1,456,000, year-20 rate 19.18 p/kWh.
- CPI at 3.0% — £1,532,000, year-20 rate 21.04 p/kWh. On this path the year-20 PPA rate arrives at roughly what the cheapest non-domestic grid band costs today — though grid prices will have moved over those twenty years too, so that is a modelled 2046 tariff set against a measured 2026 import price, not a forecast that the deal stops paying.
Inflation target of 2%: Bank of England — Inflation and the 2% target, checked 10 September 2026. CPI annual rate 2.9% for the twelve months to July 2026, released 19 August 2026: ONS series D7G7. Many UK PPAs index to RPI rather than CPI, and RPI ran 3.2% over the same twelve months (ONS series CZBH), which is why an RPI-linked deal models at or above the top of this strip. How each index behaves inside a contract is covered in solar PPA escalators: fixed, RPI or CPI.
What to do with this before you sign
Ask every provider for the year-20 tariff and the cumulative cost of their own quote, not just the year-one rate: on the assumptions above, a 2% escalator adds around £245,000 to a contract that opens at £57,000 a year. If a provider will not drop index-linkage, the clause worth negotiating hardest is a cap on the index — and check whether the uplift is floored at 0%, because a floor stops your tariff falling in a negative-inflation year. Then compare the shortlist on the effective average rate — it is the only figure that makes a flat deal and an escalating deal genuinely comparable. You can run your own numbers in the PPA savings calculator.
Solar PPA rates by sector
Sector is a proxy, not a price driver. No provider quotes a hotel differently because it is a hotel — it quotes the system size the site can carry and the share of that generation the site will consume behind its own meter. Two buildings of the same size in different sectors get much the same rate when their load curves look alike; two hotels get different rates when one runs a pool, a kitchen and a commercial laundry through the middle of the day and the other does not.
What actually moves the number:
- How much roof or land the sector typically has. The size effect in the table above is usually the single biggest reason one sector's published band sits below another's — warehousing prices lower than churches because warehouse roofs are bigger, not because of the sector.
- How well daytime demand matches the solar curve. A 24/7 load such as a hospital or a care home absorbs nearly everything the array makes; a school runs term-time and exports through the summer; a Monday-to-Friday office matches the curve well on weekdays and not at all at weekends.
- What happens to the surplus. The more a site exports rather than self-consumes, the more of the provider's return rests on export revenue instead of your tariff — and that shows up in the rate you are offered.
- Tenure and covenant strength. Both vary far more between two businesses in the same sector than they do between sectors.
The per-sector bands we publish on the sector pages are shorthand for the typical system size and load profile in that sector — not evidence that the sector itself is priced differently. Read the band as a starting point, then check whether your own load curve actually looks like the sector's.
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Get an indicative PPA tariffCommercial solar PPA rates
A commercial solar PPA rate is the price you pay per kilowatt-hour for the electricity the system generates and you consume on site. It is not a quote for equipment. The funder owns and maintains the asset, so the rate has to recover capital cost, cost of capital, operation and maintenance, insurance and inverter replacement across a 15–25 year term.
Rates fall as system size rises, because fixed development costs spread across more kWh. On the bands in the table above, a 50kWp scheme sits at 16–20 p/kWh, a 250kWp at 12–16 p/kWh and a 2MWp at 9–12 p/kWh, while utility-scale 10MWp+ arrangements are normally quoted in pounds per megawatt-hour (£42–55/MWh) rather than pence. Judge any of them against a grid import benchmark of roughly 21–25 p/kWh.
Beyond size, five factors move the number materially:
- On-site consumption share — the more of the generation you use behind the meter, the less the funder depends on low-value export, and the keener the rate.
- Off-taker covenant — an investment-grade or guaranteed counterparty prices well below a thin trading company on the same roof. See how funders assess covenant strength.
- Contract term — a 25-year term amortises across more kWh than a 15-year one, so it starts lower.
- Escalator — a low year-one rate carrying RPI indexation can cost more over the term than a higher fixed rate.
- Site condition — remaining roof life, asbestos, structural loading and available DNO capacity all price in.
Two rates are only comparable if term, escalator, generation assumption and export treatment are identical. Our breakdown of how a PPA tariff is built up sets out the line items to normalise before you put quotes side by side.
What is a typical commercial solar PPA rate in the UK?
Indicative UK commercial PPA tariffs run from about 16-20 p/kWh at 50kWp down to 9-12 p/kWh at 2MWp, with utility-scale contracts quoted around GBP 55-75/MWh indicative. The comparison point is a grid import benchmark of roughly 21-25 p/kWh. Your actual rate depends on system size, on-site consumption share, covenant strength, contract term and escalator.
PPA prices
PPA prices are quoted in two different units, and that alone makes offers hard to line up. Commercial rooftop schemes are priced in pence per kilowatt-hour; utility-scale contracts are usually written in pounds per megawatt-hour, so £42–55/MWh is the same figure as 4.2–5.5 p/kWh. Convert everything into one unit first, then normalise the assumptions underneath it.
A PPA price is a build-up, not a market rate. Inside the pence you are quoted sit the amortised capital cost of the system, the funder's cost of capital over 15–25 years, operation and maintenance, insurance, monitoring and metering, inverter replacement in years 10–15, and asset management. Outside it sit your standing charges and non-commodity costs on whatever you still import, plus any site works you have agreed to fund yourself. A tariff that looks unusually low is often one where a cost has been moved out of the price rather than out of the project.
Four assumptions decide whether two prices are genuinely comparable:
- Volume — the kWh/kWp yield assumed and the annual degradation applied. An optimistic yield lowers the quoted pence and raises what you actually pay.
- Metering basis — billed on metered on-site consumption or on deemed generation. They are not the same invoice.
- Export treatment — surplus units are worth around 12 p/kWh on the main business export product, well below your 21–25 p/kWh import cost, so who keeps that revenue changes the tariff.
- Term and indexation — a low year-one price with RPI escalation can overtake a higher fixed price well inside the contract.
Model your own consumption in the PPA savings calculator, then issue the same specification to every funder using our PPA tender structure so the prices that come back are like-for-like.
What is actually included in a solar PPA price?
The quoted pence per kWh covers the system's capital cost, the funder's cost of capital, operation and maintenance, insurance, monitoring and metering, inverter replacement and asset management across the term. It excludes your standing charges and non-commodity costs on residual grid import, plus any site works you agree to fund directly. Always confirm which side holds export revenue.
Solar PPA UK
UK solar PPA pricing only makes sense against three domestic numbers. The first is the grid import benchmark: most commercial supply contracts land at roughly 21–25 p/kWh all-in, and that is the price a PPA tariff displaces. The second is export value — published business export products sit far below import, with Octopus Panel Power at 12 p/kWh for systems under 150 kWp; above that ceiling export is negotiated supplier by supplier. The third is the tariff itself, indicatively 9–18 p/kWh across most commercial sizes.
The gap between those figures drives UK design decisions. A kilowatt-hour consumed on site is worth 21–25p to you; the same kilowatt-hour exported is worth about 12p. That is why UK commercial PPAs are sized to your daytime load profile rather than to available roof area, and why half-hourly consumption data matters more at feasibility than roof drawings. Set export income against PPA savings before you sign off a system size.
Two further UK specifics shape the deal:
- Capital allowances follow ownership. Solar is a special-rate asset, so it does not qualify for full expensing. The 100% route is the Annual Investment Allowance, up to £1m, then 50% first-year allowance. Under a PPA you do not own the system, so those allowances sit with the funder — and should be visible in the tariff you are offered.
- REGOs are negotiable. Whether the generation certificates transfer to you determines whether you can report that electricity as zero-carbon under market-based Scope 2 reporting. Ask who retains them; it is rarely volunteered.
On property compliance, be careful with dates. The floor to let commercial property is EPC E today. The proposed interim EPC C for 2027 was dropped in the government's June 2026 interim response, and EPC B is proposed for 2031 for buildings over 1,000 m² only, subject to secondary legislation — see the current MEES position. On-site generation does feed the EPC calculation, but alongside fabric and services, so do not assume a PPA alone moves a band.
Can I claim capital allowances on a solar PPA in the UK?
No. Under a PPA the funder owns the system, so the allowances sit with them rather than with you. If you buy outright instead, solar is a special-rate asset and does not qualify for full expensing; the 100% route is the Annual Investment Allowance up to one million pounds, with 50% first-year allowance on spend above it.
PPA for commercial ground solar
Ground-mount changes the economics of a commercial PPA more than most buyers expect. Land is cheaper per kWp than a constrained roof, arrays can be pitched and oriented properly, and there is no roof life, loading or asbestos risk for the funder to underwrite — so tariffs are keener. At the 5MWp band a ground-mount or large rooftop scheme carries indicative capex of £3.5m–£4.5m and a PPA tariff of 8–11 p/kWh against that 21–25 p/kWh import benchmark, generating in the order of 4.75 million kWh a year.
What ground solar adds is process. A scheme at this scale needs full planning permission rather than permitted development, and the local authority sets that timeline, not the funder. Grid capacity is the second gate: sizing to your own load avoids an export-heavy connection application, which is why private-wire and behind-the-meter structures dominate commercial ground arrays. Land tenure is the third — the funder needs security over the land for the full term, so the lease or option, registered title and any lender consents must be resolved before pricing firms up.
Practical checks before you go to market:
- Indicative land take is assessed at roughly 4–5 acres per MWp at feasibility, before setbacks and access are allowed for.
- Ground conditions decide the mounting system — screws, driven piles or ballast — and that moves capex.
- If the land is not yours, rent to the landowner is a cost line inside the tariff, not a separate income stream.
- Fencing, CCTV and access tracks are excluded from headline capex figures more often than not.
- Terms are typically 25 years, and covenant requirements harden accordingly.
Work through the figures band by band on the 5MWp cost page before you commit to a land option.
Is a ground-mounted solar PPA cheaper than a rooftop PPA?
Usually, per kilowatt-hour. Ground arrays avoid roof life, structural loading and asbestos risk and can be optimally pitched, so tariffs at the 5MWp band sit around 8-11 p/kWh. The trade-off is process: full planning permission, a grid connection application and secure land tenure for the full 25-year term all have to be resolved before pricing firms up.
The indicative capex figures below are a cash-purchase reference only; under a PPA you never own the asset, so read PPA tax and accounting explained before assuming any allowance sits with you.
If your consumption places you between the 100 kWp and 250 kWp bands, a 220 kWp distillery worked example shows what a 20-year contract at that scale looked like in practice.
Capacity can be assembled from several buildings rather than one, as 615 kWp across a school estate shows for a trust whose individual roofs each carried well under 100 kWp.
Organisations large enough to sit in the upper bands here are usually large undertakings for ESOS purposes, and the ESOS Phase 4 duty explained sets out why an energy audit on its own no longer discharges it.
Between the 100 kWp and 250 kWp bands, a 145 kWp PPA in practice shows how the per-kWh rate resolves once self-consumption is modelled.
Keep going
- 2MWp PPA — UK 2026 indicative cost & PPA tariff
- 5MWp PPA (ground-mount or large rooftop) — UK 2026 indicative cost & PPA tariff
- 1MWp PPA — UK 2026 indicative cost & PPA tariff
- 500kWp PPA — UK 2026 indicative cost & PPA tariff
- 100kWp PPA — UK 2026 indicative cost & PPA tariff
- 250kWp PPA — UK 2026 indicative cost & PPA tariff
See what PPA providers would quote you
Solar PPA cost & tariff by system size — UK 2026 — tell us about your site and we'll return an indicative p/kWh tariff for it. Reply by email within one working day.