Resource

UK Solar PPA Diligence Checklist

A 10-section pre-signing diligence checklist for UK commercial off-takers entering a solar Power Purchase Agreement. Covers provider financial standing, contract structure, technical scope, O&M, M&V, REGO mechanics, end-of-term options, tax + accounting and off-taker preparation.

Use this as a starting framework — adapt to your specific deal structure. For a hands-on diligence review of a specific term sheet, send us the document via the contact form.

1. Provider financial diligence

• Companies House filing history (last 5 years)
• Audited accounts of provider entity and parent (last 3 years)
• Funding stack documentation (debt, equity, LP base)
• Reference deals — minimum 3 comparable in last 24 months
• Insurance evidence: PI £5m+, PL £10m+, system insurance

2. Contract structure

• Term length matches site tenure with 5+ year buffer
• Escalator clearly defined: type (fixed/RPI/CPI), cap, floor
• Off-taker covenant requirement explicit
• Change-of-control assignment provisions
• Force majeure carve-outs reasonable
• Change-in-law allocation defined
• Termination clauses with capped buy-out formula

3. Technical scope

• EPC contractor identity, MCS + NICEIC accreditations
• Panel + inverter brands disclosed with manufacturer warranties
• Roof penetration warranty separate from panel warranty
• Performance ratio guarantee: 78%+ over rolling 12 months
• P50 + P90 yield modelling included in heads-of-terms
• Site survey report (structural + electrical + planning)

4. O&M provisions

• 24/7 remote monitoring access for off-taker
• Annual on-site inspection schedule + thermal imaging
• Inverter replacement included (typically year 12-15)
• Soiling cleaning protocol
• Fault response SLA (target 48 hours)
• Insurance maintained for term

5. M&V protocols

• Independent generation meter (not provider-owned)
• IPMVP Option B methodology
• Performance ratio dispute mechanism with independent assessor
• Read-out data access for off-taker

6. REGO + green claim

• REGO certificate transfer explicit
• Annual retirement statement against off-taker consumption
• Audit trail via Ofgem REGO register
• Right to verify retirement

7. SEG / export arrangement

• SEG income assignment clarified (off-taker preferred)
• Export meter independent of provider
• Right to switch SEG supplier mid-contract

8. End-of-term options

• Extension option with pre-agreed tariff bands or formula
• Buy-out option at fair market value with defined valuation methodology
• Right of first refusal if provider divests
• Removal option at no cost to off-taker

9. Tax & accounting confirmation

• IFRS 16 treatment confirmed with auditor
• HMRC corporation tax deductibility confirmed
• VAT recovery on payments
• SEG income tax treatment

10. Off-taker preparation

• Internal stakeholder alignment (finance, ops, facilities, legal)
• Board approval where required
• Site lease term verification
• Roof survey commissioned independently
• Insurance coordination (existing building cover)