PPA Mechanics · Structures

In-front-of-Meter PPA Explained

An in-front-of-meter PPA routes your solar generation through the public grid and delivers it back via your supply meter, so the tariff carries network charges that behind-the-meter power never sees.

Export-and-import: how the structure actually works

Every commercial PPA answers one question before any other: does the electricity ever touch the public grid between the panel and your load? In a behind-the-meter arrangement the answer is no — generation flows down a private wire straight to your distribution board and never registers as either export or import. An in-front-of-meter PPA is the deliberate opposite. The generation is metered as it leaves the site, sold onto the grid, and then bought back through your normal supply point as if it were ordinary imported electricity.

That round trip is the defining feature. Physically, the same electrons may light the same building, but commercially the kilowatt-hour has been exported by the generator and re-imported by you. It is settled through the wholesale and balancing mechanism, not through a private connection. The PPA tariff you pay — 13 to 22 p/kWh in year one — is the price of the generation plus the cost of moving it across the network, because once power is on the grid it cannot escape the charges every other unit of grid electricity carries.

This is why the structure is sometimes called a grid-connected or export PPA. You are not avoiding the grid; you are using it as the delivery layer between a generator that produces more than you can instantly consume and a meter that needs power at times the sun is not shining.

Why the tariff is higher: BSUoS, TNUoS and the network stack

The single biggest reason an in-front-of-meter PPA costs more per kilowatt-hour than its behind-the-meter cousin is that exported-then-imported power is fully exposed to the GB network charging stack. When electricity flows down a private wire it sidesteps almost all of this. When it crosses the grid, it picks up the lot.

Charge	What it is	Why it lands on you
TNUoS	Transmission Network Use of System — the cost of the high-voltage backbone	Applied to grid-delivered power; varies sharply by region and demand band
BSUoS	Balancing Services Use of System — the cost of keeping supply and demand matched second by second	Now levied on final demand, so imported PPA power carries it
DUoS	Distribution Use of System — the local network operator's charge	Triggered the moment power uses the public distribution network

Stack those on top of the generation cost and the supplier's balancing margin, and the 8-14 p/kWh you might pay behind the meter becomes 13-22 p/kWh in front of it. The premium is not a markup for its own sake — it is the unavoidable toll for using shared infrastructure. For a full breakdown of what drives the rate you are quoted, see our PPA pricing benchmarks; this page only explains why this particular structure sits at the top of that range.

When in-front-of-meter is the only option

Plenty of off-takers would prefer the cheaper behind-the-meter route and simply cannot use it. The deciding factor is daytime self-consumption. Solar generates in a midday-weighted bell curve; if your load does not coincide with that curve, behind-the-meter generation has nowhere to go and the economics collapse. In front of the meter solves that by selling the surplus onto the grid and buying back what you need, when you need it.

• Low daytime load. A site that draws most of its power in the evening or overnight cannot absorb a midday solar peak on-site.
• Seasonal occupancy. Demand drops to near zero for months at a time, so a behind-the-meter system would spend half the year generating into an empty building.
• Roof far larger than load. A vast warehouse roof can host far more kWp than the operation underneath it will ever consume during daylight.
• Split or shared metering. Where private-wire routing is impractical, the grid becomes the only realistic delivery path.

In each case the question is not which structure is cheapest but which structure is feasible at all. An in-front-of-meter PPA turns a roof you could not otherwise monetise into cheaper-than-grid electricity, even after the network charges.

REGO transfer and your renewable claim

Behind the meter, the renewable attribute travels with the electron — you generated it, you consumed it, you can claim it. The instant power is exported to the grid, that link is severed. The kilowatt-hour you buy back is, legally, an ordinary grid unit unless the Renewable Energy Guarantee of Origin (REGO) certificate is explicitly transferred to you under the PPA.

This matters enormously for any off-taker reporting Scope 2 emissions or making a green-electricity statement. Without the REGO, you have cheaper power but no defensible renewable claim. The generator can retain the certificates, sell them separately into the REGO market, or assign them to you — and which of those happens is a drafting decision, not a default. If your motivation includes carbon reporting, the contract must name REGO transfer as an obligation, not an option. Our deeper note on REGO mechanics under a PPA walks through the certificate flow and the clauses that protect your claim.

Drafting watch-point: never assume REGO transfer is bundled into an export-and-import structure. If the heads of terms are silent on it, you are buying brown-grid power at a green-power price.

Imbalance settlement and the supplier's role

Because generation is metered as export and your consumption as import, the two rarely match minute to minute. Solar over-produces at noon and produces nothing at 6pm; your demand follows its own curve. That mismatch has to be settled through the balancing mechanism, and someone carries the imbalance risk — the cost of the gap between what was forecast, what was generated, and what was consumed.

In a well-structured in-front-of-meter PPA the licensed supplier sits in the middle, balancing and shaping the position so you are not personally exposed to half-hourly imbalance prices. That balancing service is one of the costs baked into your tariff. The detail to check before signing is who bears imbalance in which scenarios: a firm structure passes that risk to the supplier or generator; a non-firm one can leave it with you. Getting this wrong turns a predictable tariff into a volatile one. The mechanics here overlap heavily with the sleeved PPA, which uses the same supplier-balancing layer to deliver off-site generation to your meter.

How SEG interacts with an export PPA

People conflate the Smart Export Guarantee with an in-front-of-meter PPA because both involve power flowing onto the grid — but they are opposite relationships. SEG is an export-only payment: a supplier pays you a per-kWh rate for surplus you push to the grid, full stop. An export PPA is a supply contract: you are buying generation back at an agreed tariff. One pays you for what you send out; the other charges you for what you bring in.

They can coexist. Where a system generates more than even your import requirement can absorb — a common situation on an oversized roof with seasonal demand — the genuine surplus beyond the PPA can be sold under SEG. The contract has to be clear about which kilowatt-hours fall under the PPA tariff and which spill into the SEG rate, because the values are very different and double-counting the renewable attribute is not permitted. For the full comparison of the two payment routes, read Smart Export Guarantee vs PPA export tariff.

Best-fit sectors — and who should look elsewhere

The structure earns its keep wherever there is roof or land but limited coincident daytime demand. The clearest examples share one trait: their load falls away precisely when solar output peaks.

• Schools. Term-time demand is decent, but the summer holiday — the sunniest months — empties the building. An in-front-of-meter structure monetises that summer export rather than wasting it. See solar PPAs for schools.
• Churches and charities. A Sunday-peak, mostly-empty-weekday profile leaves most weekday generation for export.
• Seasonal hospitality. A coastal hotel or park that runs hot April to October and idles over winter cannot absorb year-round generation behind the meter. See solar PPAs for hotels.
• Low-base-load warehouses. A huge roof over a lightly-powered storage operation generates far more than the racking and lighting below will use. See solar PPAs for warehouses.

The off-takers who should not use this structure are high daytime-load industrials — continuous-process manufacturers, cold stores, data centres. They consume most of what they generate on-site, so paying network charges to route power through the grid is simply burning money. For them, behind-the-meter is materially cheaper and the obvious choice. If you are unsure which side of that line your operation falls on, tell us your daytime load profile and we will point you to the right structure before you go to market.

FAQs

Frequently asked questions

Why is an in-front-of-meter PPA more expensive than behind-the-meter?

Because the electricity travels across the public network before reaching your meter, it attracts use-of-system charges (BSUoS, DUoS, TNUoS) and supplier balancing costs that behind-the-meter power avoids. That pushes the band to 13-22 p/kWh versus 8-14 p/kWh on-site.

When is an in-front-of-meter PPA the only viable option?

When daytime self-consumption is too low to absorb on-site generation — a school that empties over summer, a seasonal hotel, or a low-base-load warehouse. If most output would be exported anyway, routing it through the grid is the only way to monetise the roof.

Who owns the REGO certificates under this structure?

It depends entirely on the contract. Once power is exported and re-imported the renewable attribute is severed, so the PPA must explicitly transfer the REGOs to you. Without that clause you have cheaper power but no defensible renewable claim for Scope 2 reporting.

How does an export PPA differ from the Smart Export Guarantee?

SEG pays you a per-kWh rate for surplus you export — an export-only payment. An in-front-of-meter PPA is the reverse: you buy generation back as a supply contract. They can coexist, with genuine surplus beyond the PPA sold under SEG, but the kilowatt-hours must not be double-counted.

Who bears the imbalance risk in a grid-connected PPA?

In a well-structured deal the licensed supplier balances and shapes the position so you avoid half-hourly imbalance prices. In a non-firm structure that risk can sit with you. Always confirm who carries imbalance, and in which scenarios, before signing.

Related on this site

• /mechanics/structure/ — Compare all six PPA structures side by side
• /mechanics/pricing/ — What drives the p/kWh tariff you are quoted
• /blog/seg-vs-ppa-export/ — Where surplus export goes and at what price
• /blog/rego-mechanics/ — Who owns the renewable claim
• /sectors/schools/ — Summer-export sites and term-time demand
• /quote/ — Match your site to the right structure