250kWp PPA — UK 2026 indicative cost & PPA tariff

2026 indicative numbers

System size	250kWp PPA
Indicative capex (cash)	£200,000–£260,000
PPA tariff (year 1)	12–16 p/kWh
Annual generation	237,500 kWh
Indicative annual saving	£26,125+ (vs 24 p/kWh grid)
Typical audience	Factories, distribution centres, large hotel chains, MAT schools, NHS community sites.
Off-taker requirement	15+ year tenure, £80k+ annual electricity spend, investment-grade or guarantor required

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.

A quarter-megawatt changes who gets to sign

At 250kWp the question shifts from "will the panels fit" to "is your balance sheet strong enough". A system costing £200,000–£260,000 to build is real capital a funder puts at risk over 15 to 25 years, so covenant scrutiny sharpens. Providers here generally want an investment-grade off-taker or a guarantor behind the contract, at least fifteen years of secure tenure, and yearly power spend around £80,000. Weaker credits are not shut out, but they pay for it in the tariff.

Grid connection enters the picture

An array generating roughly 237,500 kWh a year can exceed what your existing connection is allowed to export, so a G99 application to the DNO may join the timeline. If you consume most of the output on site the constraint is milder, but any meaningful export needs the network operator's agreement, and that can add weeks. Pinning down your maximum export capacity early stops it ambushing the programme later.

Tariff leverage improves

The upside of scale is price. At 12–16 p/kWh the per-unit cost undercuts the smaller bands, because the fixed transaction costs now rest on a far larger generation base. That is real money — hundreds of thousands of kilowatt-hours annually — so the rate and the escalator are worth pushing on. Getting to grips with how the tariff is constructed gives you the language to negotiate.

• Investment-grade covenant or a named guarantor
• Fifteen-plus years of remaining tenure
• Yearly power spend of roughly £80,000
• Early export-capacity check with the DNO

Getting the structure right

Multi-academy trusts, hotel chains and NHS community estates often want one PPA across several buildings, which raises metering and apportionment questions. See how funders judge the strength of your covenant, and if you are weighing a PPA against grant-funded ownership, the comparison pages set out where each route wins.