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Solar PPA (Power Purchase Agreement)

Solar PPA

Solar PPAs in a nutshell

A Solar PPA or Power Purchase Agreement is a long-term (20 years plus) contract between

  • an investor who pays for the installation and maintenance of a solar PV system at a site; and
  • the site owner / operator who agrees to purchase electricity generated by the solar PV system.

The purchase price of solar electricity is set at a discount to the grid cost of electricity.

Benefits of a Solar PPA

  • Free Solar PV: site owner / operator obtains the benefit of solar at no cost. The investor handles the upfront costs of sizing, procuring, installing and maintaining the solar PV system.
  • Energy Savings: The site owner is able to benefit from solar energy priced below the cost of grid electricity and start saving money as soon as the system becomes operational.
  • Reduced energy price variability: Solar PPAs provide a fixed, predictable cost of solar electricity for the duration of the agreement. The fixed cost per kWh paid for solar energy typically inflates either at a known fixed rate, or at the rate of RPI.  Both inflation rates are below expected electricity price inflation.
  • Zero cost 'green': Improved sustainability, positive CSR benefit, contribution to renewble energy target.
  • Limited risk, no maintenance costs:The developer is responsible for all installation and operating permissions, system performance and operating risk.

 

Ideal for any organisation ...

  • owning their premises or with a long-term lease;
  • with at least 250 m2 (2500 square feet) of roof space and can accommodate a system sized at 50kWp or more;
  • with a reasonable (50,000 kWh a year plus) electricity usage and half-hourly metering in place;
  • with a good credit rating and sustainable long term outlook.

If you don't fit these criteria, it doesn't mean solar isn't right for you and it doesn't mean it can't be funded - there is other finance available e.g. the Green Business Fund, Lease finance etc. So please get in touch if you would like a quote or further information. Solar can usually be structured to be a cash neutral or cash positive investment from the outset.

Why Spirit?

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Spirit is a commercial solar installer. We work with several financiers and can obtain quotes for lease finance and / or Solar PPA finance.  We can usually obtain three or four PPA quotes on behalf of our clients.

We installed the largest educational solar system in the UK - 634kWp at Sparsholt College in Winchester. The system was financed by a PPA agreement and the College is now benefitting from low cost solar electricity.  If you are looking for a solar PPA, we'd love to help.

Sparsholt College Case Study

View case study

solar ppa

More information

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A Solar PPA or Power Purchase Agreement is an agreement under which a PPA investor (developer) arranges for the design, financing and installation of a solar PV system at a commercial site, at no upfront cost to the site operator (usually, but not always, the site owner).

Spirit’s role is to provide initial design and installation, as well as on-going monitoring and maintenance services to the developer, with end-to-end project management using our in-house design and installation team. 

The developer sells the power generated to the site operator at a fixed rate that is below the rate available via the grid. This lower electricity price serves to offset the customer’s purchase of electricity from the grid. 

As well as receiving income from the site operator, the developer also receives the Feed-in Tariff in respect of any solar energy generated, as well as an export tariff in respect of any solar energy exported to the grid.  

The term of a solar PPA is typically 25 years. The developer is responsible for the operation and maintenance of the system for the duration of the agreement. At the end of the PPA contract term, a customer may be able to extend the PPA, have the developer remove the system or choose to buy the system from the developer, usually for a peppercorn amount (£1).

Guide to Solar PPAs

Free to download

Guide to Solar PPA Download now

Get in touch

Call 0118 951 4490 or

request a call back:

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or fill out our form with details of your enquiry:

Request advice or free quote

You can also complete our Solar PPA Quick Assessment Form and we will make an initial assessment of the viability of a PPA at your premises: 

PPA Quick Assessment Form