Corporate Solar Finance & Tax Guide

Commercial Solar PPA UK: On-Site Power Purchase Agreements

By HeatPumpsAndSolar.co.uk Commercial Technical Team · Published 21 October 2026 · Updated 29 October 2026

A funded rooftop array can change who pays upfront — not remove the need for contract scrutiny.

Considering an on-site commercial solar PPA in the UK? Compare energy billing, indexation, roof rights, maintenance and exit terms against an owned-system quote.

Executive Summary & Key Takeaways

A third-party funder typically pays for and owns the array; the site host grants roof rights and purchases electricity under the signed terms.
Check whether charges apply to electricity generated, delivered to the site or subject to minimum purchase and take-or-pay obligations.
Test indexed PPA prices against your actual import contract and half-hourly usage, not a headline average grid tariff.
Roof repairs, insurance, export rights, downtime and early exit can change the total cost materially.

Compare a PPA with an owned-system quote

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On-site PPA, mapped

Follow the power, then follow the contract

A typical arrangement, not a substitute for your proposed metering diagram and signed agreements.

Owner and roof rights

Funder or project company

Typically finances and owns the solar array on the host or landlord’s roof. Roof access and removal rights need a separate agreement.

Generation → meter → use

Array and generation meter

Metered solar output feeds the building behind its grid meter. The PPA must say whether the bill covers generated energy, delivered energy or a minimum volume.

Site and network

Building ↔ grid import/export meter ↔ DNO

The building uses available solar; the grid supplies shortfalls. Surplus may export if approved. Confirm who receives export proceeds and who bears curtailment.

Money and rights flow separately: the electricity buyer pays the funder under the PPA, while the landlord or host grants roof rights. A tenant, landlord and buyer need not be the same party. An off-site PPA instead contracts for generation at another location and does not itself deliver power behind this building’s meter.

For a delivered-energy offer, calculate billable kWh from matched half-hourly generation and site demand (subject to the meter and contract), not simply annual generation minus annual export. Imports and exports at different times still appear on separate grid meter readings.

Test an on-site PPA offer

Use an expected annual delivered volume from a half-hourly model and the import unit charges that on-site solar would actually displace. Leave a field blank if you do not yet have the figures.

Delivered solar (kWh/year) Avoidable grid unit rate (p/kWh) Opening PPA rate (p/kWh) Annual PPA rate escalator (%) Contract term (whole years) Annual fixed PPA charges (£) Annual minimum PPA payment (£)

Grid unit charges displaced over term Enter the proposal figures

Modelled PPA payments over term —

Difference before other costs —

Illustrative nominal totals only: constant delivered volume and avoidable grid rate; annual PPA price escalation compounds, and each year’s payment is the greater of variable charge plus fixed charge or the entered minimum. Real minimum-volume, indexation, export, VAT, tariff changes, seasonal patterns, downtime, roof works, termination and other site-specific charges may differ. A negative difference means higher modelled PPA payments. Check signed metering and terms before relying on any figure.

Who owns what in an on-site solar PPA?

A funder or project company normally finances and owns the array; a developer or installer may build and operate it. The building owner grants access or roof rights, while the business using the electricity agrees to pay for contracted output. These may be three different parties on a tenanted site. Before comparing offers, identify the host, landlord, electricity buyer, funder and meter owner, and confirm whose permission is needed.

Generated, delivered and exported energy are not the same thing

Ask where the meter sits and whether you pay for all electricity generated by the array or only electricity delivered and used behind your meter. Check what happens when the building is closed, load is low, the inverter is curtailed or the grid connection limits export. Who receives export revenue, and who bears any shortfall or minimum-take obligation? Match half-hourly generation to half-hourly demand and the signed metering rules: annual generation minus annual export is not a reliable shortcut for a delivered-energy bill, because imports and exports arise at different times.

Compare the whole contract, not just the starting pence per kWh

Model the PPA tariff, any fixed fees, indexation formula, floor or cap and annual escalator across the proposed term. Compare only the grid charges you actually avoid when using on-site electricity; standing charges and other fixed costs may remain. Run a low-use and low-generation case alongside the base case. Neither a cheaper opening tariff nor a national price average guarantees savings at your site.

Roof access, maintenance, sale and early termination

The contract should allocate roof repairs, temporary removal, leaks, insurance, inverter replacement, monitoring, performance issues and access during operating hours. Check what happens when the roof is replaced or the property is sold, the tenant leaves, the site closes or the funder defaults. Ask for the buy-out formula, assignment conditions and removal obligations in writing. A PPA is not automatically off balance sheet: your accountant must assess the actual agreement under the applicable reporting framework, including FRS 102 or IFRS 16.

PPA due-diligence checklist before signing

Metering: What is billed — generated, delivered or self-consumed energy — and who checks the readings?
Price: What are the opening tariff, indexation, floors, fixed fees and reconciliation terms?
Minimums: Is there a take-or-pay, deemed-generation or minimum-volume charge during closure or curtailment?
Roof: Who consents, maintains the roof and pays to remove and reinstall panels for repairs?
Grid: Who applies for the connection and bears G99, G100, export-limit or reinforcement risk?
Exit: What happens on sale, tenant departure, early termination or at contract end?
Operations: Who pays for maintenance, insurance, inverter replacement and underperformance?

Financial Q&A

Frequently Asked Questions

Key financial controllers and CFO considerations

Is a commercial solar PPA free to install?

The funder may pay the installation cost, but the host usually commits to buying electricity and may grant roof rights or accept other costs. Read the payment, roof and exit terms before describing a proposal as zero cost.

Will an on-site PPA always save money against grid electricity?

No. Savings depend on the negotiated PPA price and escalation, the import charges actually displaced, half-hourly on-site use and contract obligations. Model the signed offer against your own bills.

Can we move premises or sell the building during a PPA?

Possibly, but assignment, early buy-out, landlord consent and removal terms are contract-specific. Check these against your lease and property strategy before signing.

Does a PPA avoid a G99 application or keep the array off our balance sheet?

No automatic exemption applies. The proposed generation and export arrangement still needs the relevant network approval; an accountant should assess any lease element under your reporting framework.