1MWp PPA — UK 2026 indicative cost & PPA tariff

2026 indicative numbers

System size	1MWp PPA
Indicative capex (cash)	£750,000–£950,000
PPA tariff (year 1)	10–13 p/kWh
Annual generation	950,000 kWh
Indicative annual saving	£104,500+ (vs 24 p/kWh grid)
Typical audience	Tier-1 manufacturers, large 3PL operators, NHS Trusts, council portfolios, distilleries.
Off-taker requirement	20+ year tenure, £400k+ annual electricity spend

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.

Crossing the megawatt line

A 1MWp PPA is a genuine capital project wearing an operating-cost disguise. Nobody commits £750,000–£950,000 of solar lightly, and the funders financing it behave accordingly. The reward is the keenest tariffs the rooftop market offers — 10–13 p/kWh against roughly 950,000 kWh a year — but reaching that price means clearing hurdles the smaller bands never meet.

Grid connection sets the timeline

At a megawatt, the DNO connection is often the critical path, not the panels. Exporting anything meaningful means a G99 application, and network reinforcement — where the local grid is constrained — can stretch lead times into many months and occasionally carry a charge that reshapes the economics. Serious buyers open the connection enquiry before the PPA is even drafted. Where the site swallows most of its own output the constraint eases, but the network still has to agree the arrangement.

Who signs, and how it is structured

Tier-1 manufacturers, large 3PL operators, NHS Trusts, council portfolios and distilleries dominate this band. Some install a single 1MWp array; others aggregate the same capacity across a handful of buildings under one contract. Either way, providers look for roughly two decades of tenure and yearly power spend near £400,000 — the covenant is examined closely, because a 25-year revenue stream is being underwritten.

• Twenty-plus years of tenure or a portfolio deal
• Yearly power spend approaching £400,000
• DNO connection enquiry opened early
• Board or committee approval built into the plan

Building the business case

The bigger the deal, the more the financing structure earns scrutiny. See how the numbers are assembled in the note on tariff construction, follow the underwriting logic in the covenant guide, and where a PPA is one of several routes, weigh it in the financing overview.