Generate solar electricity for your business without the upfront cost of purchasing a solar system
A commercial Solar Power Purchase Agreement can provide an alternative route to on-site solar generation. PLH Utilities can help UK businesses explore commercial solar PPA opportunities and determine whether this type of arrangement could be appropriate for their premises.
No obligation. Subject to site, technical, commercial and funding suitability.
What is a commercial Solar PPA?
A commercial solar Power Purchase Agreement is a long-term arrangement under which a business purchases electricity generated by a solar installation at its premises without necessarily purchasing the solar equipment itself.
Rather than your organisation funding the installation upfront, a third-party provider typically funds and owns the solar system. Your business then agrees to purchase electricity generated by the installation under the terms of the PPA.
How does a commercial Solar PPA work?
Your site is assessed
Roof or land, site circumstances and electricity requirements are reviewed.
Consumption is reviewed
Your electricity profile is considered against the potential solar opportunity.
The system is designed
Where suitable, an installation can be designed around the site's circumstances.
PPA terms are proposed
The commercial agreement sets out price, duration, ownership and responsibilities.
You decide
Your organisation reviews the long-term agreement before deciding whether to proceed.
Why consider a Solar PPA?
Avoid the upfront purchase cost
A PPA can provide a route to commercial solar without your business purchasing the entire system upfront, subject to the individual arrangement.
Generate electricity at your premises
The installation produces electricity at the commercial site, allowing suitable generation to be used on-site.
Contractual electricity arrangement
The price and terms applying to electricity generated under the PPA are established by the agreement.
Support your wider energy strategy
Solar can sit alongside procurement, energy efficiency, renewable grid electricity and ongoing energy management.
Third-party ownership
Under a typical PPA structure, the provider owns the installation during the agreement, subject to the actual contract terms.
Retain capital for other priorities
Avoiding the upfront purchase of the system can allow capital to remain available for other areas of the business.
Is a commercial Solar PPA really “free solar”?
You may see PPAs described as “free commercial solar panels”. That wording can be misleading if it is not properly explained.
A PPA may enable a business to have a solar system installed without paying the upfront purchase cost of the installation, subject to the particular agreement. However, the business then enters into a contractual arrangement to purchase electricity generated by the solar installation.
Commercial Solar PPA vs buying solar panels
| Consideration | Solar PPA | Purchase Solar |
|---|---|---|
| Upfront capital | Typically funded by a third party, subject to agreement | Business funds the system purchase |
| System ownership | Typically the PPA provider during the agreement | Typically the business |
| Electricity | Business purchases generated electricity under the PPA | Business uses electricity generated by its own system |
| Contract | Long-term PPA | No electricity PPA for owned generation |
| Maintenance | Depends on the PPA terms | Business or appointed provider responsibility |
| Suitability | Can suit businesses seeking to avoid substantial upfront capex | Can suit businesses able and willing to invest capital |
How much does electricity cost under a Solar PPA?
There is no single standard commercial Solar PPA electricity price. Pricing depends on the proposed project and agreement.
Relevant factors can include:
- System size
- Expected generation
- Site characteristics
- Electricity consumption
- Funding requirements
- PPA duration
- Contractual structure
- Project economics
How long does a commercial Solar PPA last?
Solar PPAs are generally long-term commercial agreements. The precise duration will depend on the project and provider.
Before signing, your organisation should understand:
- The full contract term
- Electricity pricing arrangements
- Any price-adjustment mechanism
- System ownership
- Maintenance responsibilities
- Access requirements
- Performance provisions
- What happens if the property is sold
- What happens if the tenant changes
- Early termination provisions
- What happens to the system at the end of the agreement
What happens at the end of a Solar PPA?
This depends entirely on the proposed contract. The agreement should explain what happens to the solar equipment when the PPA ends.
Depending on the arrangement, there may be provisions concerning continued operation, removal, extension or transfer or purchase of the system.
What happens if we sell the property?
This is an important consideration for any long-term solar agreement.
If your organisation may sell, relocate from or otherwise change its interest in the property during the proposed PPA term, the contractual implications should be understood before signing.
The answer will depend on the specific agreement and property circumstances, and businesses should consider this alongside their legal and property advisers where appropriate.
Can tenants use a commercial Solar PPA?
Potentially, but leasehold premises can introduce additional considerations because a solar installation affects the property itself.
Relevant issues can include:
- Landlord consent
- Lease duration
- Roof rights
- Access
- Repairing obligations
- Alterations provisions
- PPA duration
- What happens at the end of the lease
Is my business suitable for a Solar PPA?
Electricity consumption
Significant daytime electricity use may create a stronger on-site consumption opportunity.
Available roof or land
There needs to be suitable space for an appropriate solar installation.
Property condition
Roof condition, construction and other technical factors may affect feasibility.
Site tenure
Freehold or leasehold status and any third-party permissions can be important.
Business circumstances
PPA providers may have commercial, credit or funding requirements.
Long-term site plans
A long-term PPA needs to make sense in the context of your future plans for the property.
Solar PPAs for high-energy-use businesses
Manufacturing & Industrial
Factories and industrial sites can combine significant daytime demand with substantial roof areas.
Warehousing & Logistics
Large roof spaces may create solar opportunities, subject to consumption and site suitability.
Retail
Larger stores, retail parks and distribution facilities may warrant assessment.
Hospitality & Leisure
Hotels and leisure facilities operating throughout the day may be able to use solar generation on-site.
Care & Healthcare Facilities
Sites with sustained daytime electricity demand may warrant further assessment.
Offices & Business Parks
Suitable commercial buildings can explore solar as part of a wider energy strategy.
Commercial Solar PPA for multi-site businesses
For organisations operating a property portfolio, the strongest solar opportunity may not exist at every location.
PLH Utilities can help businesses consider which sites warrant further assessment by reviewing factors such as electricity consumption, roof or land opportunity, property tenure, site plans and contract position.
Solar PPA and your grid electricity contract
Installing solar does not normally remove the need for a commercial electricity supplier. Solar generation varies during the day and across the year, and a business may consume more electricity than the solar system generates.
PLH Utilities' wider commercial energy procurement experience means these requirements can be considered as parts of the same energy strategy.
What happens to surplus solar electricity?
At certain times, a solar installation may generate more electricity than the site is using.
Whether surplus generation can be exported and how any export arrangements operate will depend on the system, metering, network arrangements and commercial structure of the project.
The proposed PPA should make the relevant responsibilities and financial arrangements clear.
Commercial Solar PPA or green energy contract?
These options address different parts of a business's energy strategy.
Commercial Solar PPA
Enables suitable businesses to access electricity generated by solar installed at their premises under a long-term agreement.
Green business energy contract
Concerns renewable electricity purchased through a commercial energy supplier.
Questions to ask before signing a Commercial Solar PPA
- Who funds the solar installation?
- Who owns the equipment?
- How long is the PPA?
- What price will we pay for the solar electricity?
- Can that price change during the agreement?
- Who maintains and insures the equipment?
- Are there minimum purchase or other obligations?
- What happens if the system underperforms?
- What happens if we sell the building?
- What happens if our lease ends?
- Can the PPA be terminated early?
- What happens to the panels when the agreement ends?
- Who benefits from exported electricity?
- What access rights does the system owner require?
- What happens if the roof needs repair?
Our Commercial Solar PPA process
Initial business review
We discuss your premises, electricity consumption, energy costs, property position and objectives.
Site and consumption assessment
Relevant information is reviewed to establish whether the opportunity warrants further investigation.
Technical and commercial evaluation
Where suitable, the potential installation and PPA opportunity can be evaluated in greater detail.
PPA proposal
If relevant requirements are met, a proposal can set out the installation and contractual arrangements.
Review and decision
Your organisation considers the proposed commercial terms before deciding whether to proceed.
Project delivery
If contracts and approvals are completed, the project can progress towards installation and commissioning.
What information is useful for a Solar PPA assessment?
- Site address
- Recent electricity bills
- Annual electricity consumption
- Half-hourly consumption data where available
- MPAN information
- Operating hours
- Property ownership or lease information
- Roof information
- Site plans where available
- Existing solar installations
- Future site plans
- Sustainability objectives
You do not necessarily need everything before making an initial enquiry. PLH Utilities can explain what information may be required as the assessment progresses.
Commercial Solar PPA FAQs
What does PPA stand for in solar?
PPA stands for Power Purchase Agreement. In a commercial solar context, it is an agreement under which a business purchases electricity generated by a solar installation according to agreed contractual terms.
Do I have to buy the solar panels?
Under a typical third-party-funded PPA structure, the provider funds and owns the solar installation during the agreement, subject to the specific contract terms.
Is a commercial Solar PPA free?
It is more accurate to say that a PPA can potentially avoid the upfront cost of purchasing the solar installation. The business enters into a contract to purchase electricity generated by the system, so it is not simply free electricity.
Will a Solar PPA reduce my electricity costs?
The financial outcome depends on the specific PPA pricing, electricity generation, consumption, grid-energy costs and other contractual and operational factors. Any proposed financial benefit should be assessed using the actual project assumptions and contract terms.
Who maintains the solar panels?
Maintenance responsibilities should be set out in the individual PPA. Under many third-party-owned structures, the provider has responsibilities relating to the system, but the exact terms should be verified.
Can I have a PPA if I lease my building?
Potentially. Landlord consent, lease provisions, remaining lease term and other property considerations may need to be addressed.
Do I still need an electricity supplier?
Usually, yes. Solar may provide only part of the electricity required by your site, meaning additional electricity still needs to be purchased from the grid.
What happens when the PPA ends?
This depends on the individual contract. The agreement should clearly explain the end-of-term arrangements for the equipment and electricity supply.
Can a PPA cover multiple sites?
Potentially. Multi-site organisations can assess individual locations to identify sites that may be suitable for commercial Solar PPA projects.
Is every business eligible for a funded Solar PPA?
No. Projects are subject to factors such as technical feasibility, consumption, site circumstances, property arrangements and the commercial or funding criteria of the relevant provider.
Could your business generate solar electricity without purchasing the system upfront?
PLH Utilities can help you explore whether a Commercial Solar PPA could work for your site and understand the commercial considerations before your organisation commits to a long-term agreement.
We review your site and electricity consumption → assess the solar opportunity → consider technical and commercial suitability → develop a PPA proposal where appropriate → you review the terms and decide whether to proceed.
No upfront system purchase under an appropriate funded PPA structure. On-site renewable generation. Clear commercial assessment. Subject to eligibility and project approval.