The solar PPA process: seven steps from quote to switch-on
Signing a solar PPA is a sequence of seven steps, from an indicative tariff to the choices at the end of the term. This page sets out what happens at each step, who leads it, what …
PPA Mechanics
How Solar Power Purchase Agreements Work
Ten deep-dives on the mechanics of a UK commercial solar PPA — from indicative tariff through to end-of-contract options. Written for procurement, finance and facilities teams comparing routes to renewable electricity.
- Six structures: on-site, sleeved, virtual, corporate, behind-meter, in-front-of-meter
- 2026 tariff benchmarks: 8–22 p/kWh year 1 across UK structures
- 15–25 year typical term — three end-of-contract pathways
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Ten mechanics deep-dives
The complete PPA mechanics library
A solar Power Purchase Agreement is a contract under which a third party funds, owns and operates solar generation; you buy the power it produces at a pre-agreed tariff. The contract details — structure, term, escalator, off-taker covenant requirements, end-of-contract options — drive whether you save 20% or 50% on your electricity bill over 20 years.
Solar PPA Structures Explained
Not all PPAs are alike. The structure that fits depends on whether you own the roof, how many sites you operate, your treasury sophistication and whether you need REGO certificates…
PPA tariff UK 2026: what a solar PPA costs per kWh
A PPA tariff is the price per kilowatt-hour you pay for the electricity a provider-owned solar array supplies under a power purchase agreement. In 2026 UK on-site solar PPA tariffs…
Solar PPA Escalators: Fixed, RPI or CPI?
An escalator is the annual % uplift baked into your PPA tariff. Get the escalator wrong and a 25-year contract that looks cheap in year 1 ends up costing more than buying outright.…
Solar PPA Term: Why 15–25 Years and How to Negotiate It
Term length is the single biggest driver of tariff. Shorter terms mean higher rates; longer terms tie you in. Most UK PPAs run 15-25 years to give the investor a 7-9% IRR after deb…
End-of-Contract Options on a Solar PPA
Solar panels routinely produce for 30+ years; PPAs run 15-25 years. So what happens at the end? Three standard pathways, each with different financial implications.…
PPA offtaker: what it means and how your covenant sets the tariff
An offtaker is the buyer in a power purchase agreement: the business that commits to take, and pay for, a generator's electricity for the length of the contract. In a solar PPA the…
The EPC Contractor in a PPA Structure
EPC stands for Engineering, Procurement and Construction. In a PPA, the SPV that owns the system contracts a third-party EPC to build it. The EPC's quality is your quality.…
O&M Under a Solar PPA: What the Provider Covers
One of the biggest PPA selling points is that operations and maintenance are not your problem. But the contract scope matters — here's what a well-drafted O&M annex typically cover…
M&V Under a Solar PPA
M&V is how the provider measures what they generated and what they invoice you for. The metering, performance ratio guarantees and dispute mechanisms matter enormously over a 20-ye…
PPA Structures
15–25 years
10–15 years
10–15 years
10–20 years
15–25 years
10–20 years
Six structures available to UK off-takers in 2026
Not all PPAs are alike. The structure determines who builds the system, where the generation sits, how the electricity reaches your meter, and what risks you carry.
On-site PPA
Generator installs and owns kit on your roof or land; you buy the kWh.
Typical tariff: 9–18 p/kWh year 1 · Audience: Single-site businesses with 200kWp+ of roof or land, occupying for 15+ years.
Sleeved PPA
Generator builds at a separate location; an electricity supplier 'sleeves' the energy to your MPAN.
Typical tariff: 11–20 p/kWh year 1 (excludes supplier markup) · Audience: Multi-site businesses, tenants without roof rights, or sites with poor solar resource.
Virtual (synthetic) PPA
Financial contract-for-difference referencing a wholesale price — you don't take physical delivery.
Typical tariff: Strike price £55–£75/MWh indicative, fixed · Audience: Large corporates with treasury sophistication; net-zero commitments; multi-jurisdiction operations.
Corporate PPA (CPPA)
Direct bilateral agreement with a generator — can be physical or financial, on-site or off-site.
Typical tariff: £55–£75/MWh indicative, fixed or partially indexed · Audience: Investment-grade off-takers signing 20MW+ utility-scale solar farm output.
Behind-the-meter PPA
Variant of on-site PPA where generation sits inside your private wire; never touches the public grid.
Typical tariff: 8–14 p/kWh year 1 (lowest tariff band — no grid charges) · Audience: Industrial sites with 1MWp+ load coincident with daytime generation.
In-front-of-meter PPA
Generation exports to the grid; you receive the kWh via your supply meter under an export-and-import structure.
Typical tariff: 13–22 p/kWh (higher because of network use-of-system charges) · Audience: Sites with roof but limited daytime self-consumption.
Ready to model a PPA against your existing contract?
Our calculator runs your annual kWh, current import tariff and roof area through 2026 PPA benchmarks to show your indicative year-1 saving and 15-year cumulative.
Open the PPA calculator Compare PPA vs cashEach mechanic here is one clause or decision within a solar power purchase agreement, so it helps to start with how the whole contract fits together.
Once you know which mechanics matter to you, the next step is comparing solar PPA providers on the terms they will actually offer.
A PPA is not the only long-term price contract in the British market, and it is worth knowing how a PPA differs from a government CfD.
For sites close enough to a generator to run a direct cable, see how private wire PPAs work.