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PPA Mechanics
Solar PPA Pricing: 2026 Benchmark Tariffs
PPA tariffs are quoted in pence per kilowatt-hour. In 2026 the indicative range across the UK market is 9–22 p/kWh year-1 — well below the 28–32 p/kWh that most commercial off-takers pay for grid import.
2026 indicative tariff bands by structure
| PPA structure | Year 1 tariff | Vs grid import | Typical term |
|---|---|---|---|
| Behind-the-meter on-site | 8–14 p/kWh | −55% to −70% | 15–25 years |
| On-site (in-front-of-meter) | 13–18 p/kWh | −40% to −50% | 15–25 years |
| Sleeved PPA | 11–20 p/kWh | −30% to −60% | 10–15 years |
| Corporate PPA (utility-scale) | £42–£60/MWh (4.2–6 p/kWh) | −75% to −85% | 10–20 years |
| Virtual/synthetic PPA | £45–£55/MWh strike | Financial hedge — no physical delivery | 10–15 years |
Bands are year-1 indicative for a 250kWp on-site deal with investment-grade off-taker on a 20-year term. Your actual tariff depends on the eight drivers below.
Eight drivers of your tariff
System size
Bigger systems mean lower £/Wp capex, which the provider passes through as a lower p/kWh.
Off-taker covenant
Investment-grade off-takers see tariffs 1–3 p/kWh below sub-investment-grade equivalents.
Contract term
A 25-year term gives the provider more years to amortise — tariff drops 0.5–1.5 p/kWh vs a 15-year contract.
Escalator structure
A fixed-3% escalator costs you more over time than a 0% / RPI-linked. Year-1 tariff lower with high escalator, but cumulative cost higher.
DNO connection status
Sites with existing G99 capacity get build-cost discounts. New connections add 6–18 months and £20k–£250k of capex.
Roof condition + age
Roofs over 15 years old need refurbishment first — this gets baked into the tariff or rejected from the deal.
Self-consumption %
Higher self-consumption means less SEG export — the provider quotes lower because less revenue depends on export prices.
Geographic location
Southern UK gets 1,050 kWh/kWp/yr; Scotland 850 kWh/kWp/yr. The lower yield bumps the tariff 0.5–1.5 p/kWh.
Want a real number?
Use our PPA savings calculator to model your specific site — or send a 60-second enquiry and we'll return an indicative tariff range within one working day.
FAQs
PPA pricing FAQs
Are PPA tariffs negotiable?
Yes, especially for larger systems (250kWp+) and investment-grade off-takers. The headline tariff, escalator, term, and exit options all sit on the table during heads-of-terms.
Why is my tariff higher than the headline range?
Most commonly: small system size (<100kWp), short site tenure, sub-investment-grade covenant, or DNO connection issues. The headline ranges assume a clean, mid-size deal.
Should I always pick the lowest tariff?
No. A low headline tariff with a 5% escalator costs more over 25 years than a higher tariff with 0%. Always model cumulative cost.
Get a tariff specific to your site
Indicative ranges only get you so far. A 60-second form gives us enough to return a real provider shortlist with site-specific tariffs.
Get an indicative PPA tariff
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