What does a solar PPA cost?
Nothing upfront, and then a rate per unit of electricity the system generates. The useful question is not what the rate is in the abstract, but how it compares to what you pay your supplier today.
What you pay, and what you do not
Under a funded agreement there is no capital cost, no installation cost and no maintenance cost. What you pay is a rate per kWh for the electricity generated on your roof, invoiced monthly, alongside your normal supplier bill for everything the system does not cover.
The rate is set out in the agreement before you sign, and it is fixed for the term subject to whatever annual adjustment the contract specifies. That is the point of the arrangement: a known price for a meaningful share of your electricity, over a period far longer than any supply contract will fix.
How it compares to grid electricity
The comparison that matters is the PPA rate against your current blended cost per kWh, including standing charges and non-commodity costs rather than only the headline unit rate. Published DESNZ industrial electricity price statistics are a useful reference point for what UK businesses actually pay. Businesses commonly see overall electricity bills fall by up to 30% once a system is running, though the figure depends entirely on your roof, your usage pattern and what you currently pay.
Two things drive your actual number. How much of the generation you use on site rather than export, which depends on whether your demand lines up with daylight hours. And how expensive your current supply is, since a business on an old, cheap fixed contract has less to gain than one renewing at today's rates.
Why nobody can quote you a rate from a website
Any specific figure quoted without seeing your site is guesswork. The rate an investor can offer depends on the system size, the roof, the region, expected generation, your consumption profile and the length of term. Change any of those and the number changes.
This is why the assessment exists and why it is free. We model your actual roof and your actual consumption, and the funder returns figures for your building rather than an industry average. If a provider gives you a firm rate before looking at your site, treat it with some caution.
What about the cost of buying outright?
For comparison, a purchased commercial system typically pays back in the region of five to eight years depending on size and your current tariff, after which the electricity is effectively free for the remaining life of the equipment. That is the stronger lifetime return where the capital is available.
We set out both routes side by side in our comparison of a PPA against buying outright, and the assessment models both against your own numbers.
Costs that sometimes catch people out
- Roof works. Where remedial work is needed to take a system, it can usually be built into a funded agreement rather than billed to you. Confirm this for your own project.
- Grid connection. Larger systems may need a connection application, handled as part of the process. On constrained parts of the network this can affect timing more than cost.
- Export. Generation you do not use is exported. Whether and how you are paid for it depends on the arrangement, and is worth asking about where your daytime demand is modest.
What the assessment gives you
Indicative figures for your building: expected system size, expected annual generation, what proportion you would likely use on site, the resulting saving, and how a funded route compares to purchase. It costs nothing, needs no site visit, and carries no obligation at that stage or any other.
Every figure on this page is typical rather than promised. Yours will differ, and the only way to know by how much is to have the site modelled.
Related reading
- What is a solar Power Purchase Agreement?
- Solar PPA vs buying outright
- Solar PPA terms: length, price and exit
- Commercial solar funding options
- Common questions about fully funded commercial solar
The first step
A free desktop assessment. We use your site address and a recent electricity bill to model what your roof could produce and what it could be worth. No site visit, no cost, no obligation.
Common questions
How much does a solar PPA cost per kWh?
It depends on system size, roof, region, expected generation, your consumption profile and the length of term, so any figure quoted without seeing your site is guesswork. The rate is set out in the agreement before you sign, and the assessment returns indicative figures for your building at no cost.
Are there any upfront costs at all?
Under a funded agreement, no. There is no capital cost, no installation cost and no maintenance cost. You pay for the electricity the system generates, invoiced monthly.
How much will we actually save?
Businesses typically cut electricity bills by up to 30% once a system is running, but your figure depends on your roof, how much generation you use on site, and what you currently pay. It is modelled properly in the assessment rather than estimated.
What happens to electricity we generate but do not use?
It is exported to the grid. Whether and how you are paid for export depends on the arrangement, and it is worth asking about particularly where your daytime demand is modest relative to the roof area.