Commercial & financial
What is a Solar Power Purchase Agreement (PPA)?
A Solar PPA is a long-term contract where a third-party funder pays for, installs, owns, and maintains a solar PV system on your commercial site. Your business agrees to buy the electricity generated at a pre-agreed, fixed rate for 10-35 years. No upfront cost, no maintenance liability, and the rate is typically 20-40% lower than your current grid electricity tariff.
How much does a commercial solar PPA cost upfront?
Zero upfront cost. The funder pays for design, equipment, installation, and ongoing maintenance. Your business pays only for the electricity generated, at a fixed per-kWh rate.
How much can a UK business save with a Solar PPA?
Most UK commercial sites save 20-40% on the per-kWh cost of electricity covered by solar generation. For a typical 250kWp system, that translates to an indicative amount in annual savings depending on roof size, consumption profile, and current grid tariff. Over a 20-year PPA term, total savings often exceed a substantial sum.
What size systems does UK Solar Fund deliver?
We deliver commercial systems from 100kWp to 5MWp+, covering single-site rooftops, ground-mount installations, multi-site portfolios, and solar carports. Smaller systems below 100kWp don't usually achieve the cost efficiencies needed for attractive PPA economics.
How long does a Solar PPA last?
Commercial Solar PPAs typically run 10 to 35 years, with 15-25 years being most common. Longer terms generally achieve lower per-kWh rates because the funder recovers capital over a longer period.
Who owns the solar panels during the PPA?
During the PPA term, the funder owns the system. They are responsible for maintenance, insurance, monitoring, and any repairs. At end of term, most PPAs offer to transfer ownership to your business for a nominal sum.
What happens at the end of the PPA?
Three options: (1) Transfer ownership for a nominal sum, the system continues generating lower-cost electricity for its remaining 5-15 years of life. (2) Extend the PPA at a renegotiated rate. (3) Have the funder remove the system at no cost. Most businesses choose option 1.
What if my business relocates or vacates the site?
PPAs include contractual provisions for site changes. Options typically include: transferring the agreement to the new site occupier (most common), paying a calculated early termination fee, or arranging buyout/relocation. We explain all scenarios upfront.
Can I exit the PPA early?
Yes, with a calculated early termination fee. The fee covers unrecovered capital plus contracted return minus residual asset value. Early termination is most economical from year 10 onwards. We provide a transparent termination cost schedule upfront.
How does VAT work on a Solar PPA?
PPA payments are subject to standard 20% VAT (supply of electricity). VAT-registered businesses can reclaim this input VAT. The PPA payment counts as an operating expense for tax purposes, not capital expenditure, fully deductible against trading profits with no capital allowances needed.
How does the indexation work on PPA rates?
Most PPAs have an annual indexation mechanism, typically RPI-linked, CPI-linked, or a fixed percentage (often 1.5-3% per year). Even with indexation, the PPA rate typically stays well below grid electricity prices for the full term. Some PPAs offer 100% fixed rates with no indexation at a slightly higher starting rate.
What if grid electricity prices fall below our PPA rate?
This is the main risk to consider. If grid prices fall significantly and stay low for years, your PPA could end up costing more than grid. We model this risk in scenarios. Historically UK commercial electricity has trended upward. Most PPAs include a price-floor mechanism or option to renegotiate at trigger points.
What is the difference between a Solar PPA and a solar lease?
In a Solar PPA, you pay per kWh generated, production-linked, no electricity = no payment. In a solar lease, you pay a fixed monthly rent regardless of generation. PPAs shift performance risk to the funder; leases shift it to you. We almost always recommend PPAs as the better commercial structure for UK businesses.
Who funds the solar PPA?
We work with a panel of institutional funders, pension funds, infrastructure investors, and dedicated renewables funds. Funders compete to offer the best PPA rate for each project, which is how we secure competitive pricing.
Technical & installation
What roof types are suitable for solar PPAs?
Most commercial roof types work: flat membrane roofs (ballasted system), trapezoidal/profiled metal roofs (clamp-mounted), composite panel roofs, standing seam metal (no penetration), and slate or tile roofs in some cases. We carry out a structural survey upfront.
What if our roof needs replacement during the PPA term?
Roof condition is assessed upfront. If your roof has 20+ years remaining life, no concern. If it needs work, we can: (1) sequence replacement before installation, (2) include refurbishment costs in the PPA, or (3) plan removal-reinstatement during the PPA term. Each option modelled with you upfront.
How long does installation take?
Most commercial rooftop installations take 2-8 weeks on-site depending on system size. A typical 250kWp system completes in 3-4 weeks. Full process from contract signature to commissioning is typically 4-8 months including planning, structural surveys, DNO grid connection, and installation.
Will installation disrupt our operations?
Minimal disruption in most cases. Installation work happens on the roof or in dedicated plant areas. We coordinate with facilities and operations teams, schedule heavy work outside business hours where possible, and ensure no impact on production lines or customer access.
Do we need planning permission?
Most commercial rooftop solar is permitted development under the General Permitted Development Order (Schedule 2, Part 14). No planning application needed if panels are roof-mounted, don't protrude above the ridge line, and aren't on listed buildings or in conservation areas. Larger ground-mount and listed building projects need consent, we handle the application.
What is G99 and why does it matter?
G99 is the UK engineering standard governing grid connection of generation systems. Every commercial solar installation requires DNO approval under G99. We submit and manage the entire connection application, typically 8-12 weeks from submission to approval.
What about maintenance and monitoring?
All operations and maintenance is included in the PPA, handled by the funder. Annual visual inspections, panel cleaning where needed, inverter servicing, performance monitoring, fault diagnosis, and any repairs. You receive monthly performance reports via the monitoring portal.
What insurance do we need?
All insurance for the solar system is provided by the funder, damage, theft, public liability, consequential losses. Your existing buildings and business insurance is unaffected. In some cases, building insurance premiums slightly reduce because the funder is liable for the solar asset.
Can we add battery storage?
Yes. Battery storage is increasingly common. Benefits include time-shifting solar generation to evening peak hours, backup power during grid outages, and additional revenue through DSR (Demand Side Response) programmes. Batteries can be included from day one or retrofitted later.
Can we add EV charging?
Absolutely. Solar + EV charging is an attractive combination, fleet, staff, and visitors can charge at minimal cost using solar-generated electricity. We can include EV chargers in the same PPA structure or as a separate but coordinated installation.
What if we want to export electricity to the grid?
Most commercial PPAs prioritise self-consumption (using generated power on-site). Excess generation can be exported through a separate Power Purchase Agreement, earning an export rate for surplus generation. Both self-consumption and export revenue are modelled in your project economics.
Property & ESG
How does this work for leasehold properties?
Leasehold installations require landlord consent. We work with both you and your landlord to structure the agreement, usually involving a small ground rent or roof rent to the landlord. PPA terms align with your remaining lease term, and end-of-lease provisions are explicitly addressed.
What about property sale or sale and leaseback during the PPA?
PPAs include provisions for property ownership changes. The PPA typically transfers to the new property owner or remains with the tenant depending on contract structure. We explain how property sale, lease assignment, or sale-and-leaseback transactions are handled before you sign.
What carbon impact does a commercial solar PPA deliver?
A 250kWp system displaces approximately 45-55 tonnes of CO2 per year (UK grid carbon intensity ~196 gCO2/kWh). Over 25 years, that's 1,100-1,400 tonnes of avoided emissions. Verified monthly carbon data feeds into your Scope 2 reporting, ESG returns, B Corp assessments, and GHG Protocol disclosures.
How do PPAs fit with our ESG and Net Zero commitments?
Solar PPAs are one of the most credible Scope 2 reduction interventions. Unlike renewable energy tariffs (which can have additionality concerns), on-site solar PV produces verifiably new renewable generation directly used at your site. Many businesses cite their solar installation as a centrepiece of their Net Zero transition plan.
Getting started
How does the assessment process work?
Get in touch and we arrange a site visit. We assess: roof condition and orientation, available area, structural capacity, existing electrical infrastructure, your consumption profile (from 12 months of bills), and grid connection capacity. We then issue a written assessment with system specification, projected generation, indicative PPA rate, and savings forecast. Typically 2-3 weeks from initial contact.
What information do we need to provide?
For an indicative assessment: site address, 12 months of electricity invoices (or annual kWh consumption), roof information (age, type, condition if known), and confirmation of decision-maker authority. For a detailed proposal: structural drawings, operational patterns, planned capital expenditure, lease information if applicable, and sustainability targets.
How quickly can we get an indicative PPA rate?
Indicative rate within 5-10 working days of receiving your information. Detailed binding proposal (with funder commitment) typically 3-6 weeks after that. From initial enquiry to signed contract is usually 2-4 months, depending on your internal approval process.
Are you regulated and accredited?
UK Solar Fund (trading name of Murphy Technologies Ltd) is not authorised by the FCA, our services are commercial B2B arrangements outside FSMA scope. All our installation partners are MCS-certified (Microgeneration Certification Scheme), G99-compliant for grid connections, and operate under industry-standard contracts.
Can we see operating solar PPA installations?
Yes, we can arrange site visits to operational installations across our portfolio, subject to host client permission. Particularly useful for board-level due diligence, seeing comparable installations and meeting facilities teams at reference sites.