Solar power purchase agreements, and the other ways to fund a warehouse array
A solar power purchase agreement is a contract under which a funder pays for the array, owns it for the length of the term, and sells you the energy it generates at an agreed rate per unit. Nothing leaves your capital budget. Nothing about that part of the roof stays entirely yours either. This page sets out how solar PPAs are structured and priced in the UK, what the downsides are, how you get out of one, and how PPAs compare with buying the array outright, asset finance and an operating lease. If you only read one section, read the one on getting out, because that is where the cost of cheap power sits.
What is PPA in solar?
A solar PPA is a long-term contract between a generator and an energy buyer, under which the generator builds, owns and operates the array and the buyer agrees to take the energy it produces at a stated price per kWh for a stated number of years.
PPA stands for power purchase agreement. The same instrument underpins utility scale renewable energy projects and a single roof on an industrial estate, which is why the language in a rooftop proposal is borrowed from the wholesale energy market rather than from the building trade.
On a warehouse the shape is straightforward. A funder pays for the design, the equipment and the installation. The array sits on your roof under a lease or licence granted to that funder. You pay for the energy you draw from it, metered, at the rate written into the agreement. Anything you do not use is exported and sold by the funder, including whatever the site earns under the Smart Export Guarantee. At the end of the term the contract decides what happens to the equipment.
Two consequences follow. You are buying energy rather than buying an asset, so the capital allowances belong to the funder and not to you. And you are granting rights over part of your building for a long period, so a solar power purchase agreement is a property transaction as well as an energy one. Both points shape everything below.
SOURCE
The Smart Export Guarantee is an Ofgem administered scheme that obliges larger licensed
electricity suppliers to offer a tariff for units exported to the grid, checked September
2026.
SEE ALSO
FIG. 1 What moves, and which way, under a rooftop PPA
How PPAs are built
How solar PPA pricing is set
Where the initial rate comes from
The initial rate in a solar power purchase agreement is the price per kWh a funder needs in order to recover its costs and its return over the term, not a market price it looks up in an energy price table.
It is built from the cost of constructing your specific system, the cost of the funder's capital over the term, the modelled output of your roof, the operations and maintenance the funder carries, and above all the proportion of the generation you are expected to consume on site. That last figure is the one that moves PPA pricing most, because energy the funder cannot sell to you at the contract rate has to be sold into the market at export value instead. A building that runs hard through daylight hours supports a keener rate than one that does not.
Indexation over a long term
The rate in a solar power purchase agreement is usually indexed, most often to a published inflation measure, so it steps up each year rather than staying flat. PPA pricing is sold as stable and predictable, and set against volatile power markets it genuinely can be: a PPA contract offers long-term price certainty that an annual supply contract cannot. Stable is not the same as cheap.
The comparison that actually matters
The value of a PPA to you is the gap between the agreed rate and what you would otherwise pay to import power, held over a long term. Everything else is detail. Few occupiers have the in house resources to model that properly, which is why we build the comparison from half hourly consumption data rather than from an annual bill total.
Two benefits of the route are real and worth stating plainly. The first is that the capital stays in the business. The second is that the operational risk of the plant, the inverters, the monitoring and the replacement of failed components, sits with the funder for the length of the PPA contract rather than with you. Both benefits are paid for inside the unit rate. The process of working out whether they are worth that price is arithmetic rather than judgement, and it is the same process for every funder that quotes. Those benefits are also the reason a PPA contract runs as long as it does: the funder needs the term to recover what it spent on day one.
ASK FOR
Ask for a worked schedule of the indexed rate across the full term, not the year one number,
and put it beside what your energy supplier is quoting for renewal.
SEE ALSO
The arithmetic sits on our cost and payback page.
Corporate PPA, sleeved PPA and private wire PPA
A corporate PPA is an umbrella term covering several different contracts, and the differences between them are not cosmetic.
Power purchase agreements come in at least four shapes, and what varies is whether energy physically reaches you from the array, who sits in the middle, and what you are really buying. Getting the label right early saves a procurement process that solves the wrong problem.
Private wire PPA
A private wire PPA is an agreement in which the array feeds your building through a dedicated cable that never touches the public network, and it is the structure almost every rooftop scheme uses. The array is on your roof or immediately beside it, and the power travels to your incoming supply by that direct cable. You pay the funder for the units delivered over that wire, and you keep your existing licensed supplier for everything the roof does not cover. Because the connection is direct, there are no network charges or levies on the units you take from the array, which is where most of the saving in a private wire PPA comes from. Most rooftop PPAs in the UK are private wire PPAs, whatever the covering letter calls them.
Corporate PPA
A corporate PPA, used narrowly, is an agreement signed at company level under which one counterparty supplies several of a business's sites on a single contract. Corporate buyers with several sites often want one agreement, one counterparty and one reporting line rather than four separate roof deals. The physical arrangement on each roof may still be a private wire, but the negotiation, the covenant test and the reporting are handled centrally by a corporate energy team. Corporate PPAs of that kind are usually run as a formal procurement process with several funders bidding against one specification, and corporate PPAs signed across a portfolio tend to carry tighter reporting obligations than a single roof deal.
Sleeved PPA
A sleeved PPA is an agreement in which a remote generator sells you the energy and your existing licensed supplier delivers it, sleeving it into your supply for a fee. The generation sits somewhere else entirely, usually a ground mounted solar farm. It is the route for buyers who want to take renewable energy through a contract, and want renewable energy projects funded, but have no roof worth using. Sleeved PPAs do not displace network charges, because the power travels over the public network, so the economics are quite different from a direct wire arrangement.
Virtual or synthetic PPA
A virtual PPA, also called a synthetic PPA, is a financial contract that settles the difference between an agreed strike price and the wholesale market price, leaving your physical supply untouched and moving no power at all. Large corporate buyers use a virtual PPA to hedge their exposure to power markets and to bring new renewable energy projects to financial close. Those projects are typically solar farms and wind farms rather than rooftops, and virtual PPAs are settled by accountants rather than read off a meter. For a single distribution warehouse it is almost never the right instrument. A virtual PPA is worth knowing about mainly so you can tell when a proposal has drifted away from your roof.
| Structure | How the energy moves | Who sells to you | Fits |
|---|---|---|---|
| Private wire PPA | The array sits on or next to your building and the energy reaches you by a direct cable, never touching the public network | The funder that owns the array | Rooftop and adjacent ground schemes where the load and the generation share a site |
| Corporate PPA, on site | The same physical arrangement, contracted as a corporate energy purchase rather than as a building service | The funder or its energy trading arm | Corporate buyers running one agreement across several sites |
| Sleeved PPA | Energy from a remote renewable energy project is delivered through your existing licensed supplier, who sleeves it into your supply | A generator, with your supplier in the middle | Buyers who want renewable energy projects funded but have no usable roof |
| Virtual or synthetic PPA | No energy changes hands. A financial contract settles the difference between a strike price and the wholesale market price | A generator or trader, with supply left unchanged | Large corporate energy buyers hedging price rather than sourcing power |
General descriptions of how these agreements are commonly structured in the UK market. The contract in front of you governs, not this table.
Who keeps the renewable energy certificates
A REGO, or Renewable Energy Guarantee of Origin, is a certificate that Ofgem issues for each megawatt hour of accredited renewable generation in Great Britain.
REGOs are the British form of what the wider market calls renewable energy certificates, or renewable certificates for short, and they are what allows a company to say the energy it consumed was renewable. They can be traded separately from the energy itself.
Under a solar power purchase agreement the certificates follow ownership of the generation, which means they start with the funder. Whether they are passed to you, and on what terms, is a clause to read rather than an assumption to make. It matters if you report scope 2 emissions or sit in anyone's supply chain reporting, because a roof full of panels you cannot claim the energy certificates for is a weaker net zero story than the array suggests. Buy the array outright and the question does not arise: the generation, the export income and the renewable energy certificates are all yours.
This is worth settling before signature rather than at the first reporting deadline. A company that has committed to a carbon target needs the certificates as well as the panels, because the certificates are what turn low carbon generation on your own roof into a reportable cut in carbon emissions.
SOURCE
Ofgem's REGO scheme pages set out the accreditation and issuing rules, checked September
2026.
ASK THE FUNDER
Ask the funder in writing whether the REGOs are passed through, at what price, and what
happens to them if the agreement is assigned to the next occupier of the building.
Before you sign
What are the downsides of a solar PPA?
Solar PPAs are sold on their benefits, and those benefits are genuine: no capital, no plant risk, power at a known rate under a long-term agreement.
The downsides are less often set out, so here they are together. Six of them matter enough to put in writing before you sign.
- You do not own the cheapest energy your building will ever have. For the length of the term the generation belongs to someone else, and you buy it back a unit at a time. Over a long hold that is the single largest cost of the route, and it does not appear on any invoice.
- The allowances and the export income sit with the funder. So does the Smart Export Guarantee income and, unless the contract says otherwise, so do the renewable energy certificates. Under a capital purchase the Smart Export Guarantee payments would be yours.
- Your roof is encumbered. The funder normally takes a lease or licence over the roof and registers it against the title. That constrains re-sheeting, plant replacement and anything else that disturbs the array, and it is disclosed to any buyer or lender.
- The rate moves. Indexation means the unit price rises through the term. A rate that undercuts your current supply contract in year one may not in year twelve.
- Exit is by formula, not by notice. Getting out means triggering a buyout or an assignment on terms fixed at signature.
- The PPA contract is long and it is not standard. Two funders will send two very different documents for the same roof, which makes a like for like comparison hard work, and it is a long-term obligation to sign on a document nobody in the business has read twice.
None of that makes a PPA the wrong answer. For a tenant with a long lease, no appetite for the asset and a heavy daytime load, it is often the only route that works at all. It should be read by the solicitor who reads your property documents, not only by the person who reads your energy bills.
What are the current solar PPA prices in the UK?
Solar PPA prices in the UK are quoted in pence per kWh and settled deal by deal, so there is no published national figure and any page quoting one as the current rate is guessing.
The inputs are site specific: construction cost, the funder's cost of capital, modelled yield, the operations and maintenance obligation, and your self consumption. Two identical looking warehouses on the same estate can be quoted differently on the strength of their consumption profiles alone.
The benchmark that decides whether an offer is good is not a market average. It is the day rate on your current supply contract and the renewal your energy supplier is quoting. Ask each funder for three things in writing: the initial rate, the exact indexation mechanism, and a modelled total cost across the full term on your own consumption. Then put those beside a capital purchase on the same figures. We do not publish an indicative PPA rate on this site, because we would be inventing it, and the number that matters is yours rather than the market's.
The market context is still worth holding in mind while you read a quotation. Rooftop PPAs are priced against the same power markets that set your supply tariff, so when those markets move, offered rates move with them, and agreements signed in a different market can look either very good or very poor a few years later. Utility scale solar projects reach the market through the Contracts for Difference regime and those auction results are published. Rooftop power purchase agreements are private and none of them are. There is therefore no comparable published price for a scheme like yours, only the discipline of putting two or three funders in front of the same site pack at the same time. If the wholesale market has moved since a funder last repriced, say so and ask them to requote.
How do you get out of a solar PPA?
Buyout
A buyout clause is a provision that lets you purchase the system at a price set by a formula in the PPA contract and terminate the agreement early.
Most solar power purchase agreements contain one. The price is fixed by that formula rather than negotiated at the time, and it is normally designed to leave the funder whole on the return it expected. Read how the formula is built, what discount rate it applies, and whether it is available at any point or only on set dates. This is the single clause most worth spending money on before signature.
Assignment when the building is sold
A solar power purchase agreement is written to survive a change of occupier. On a sale or a lease assignment the agreement passes to the incoming party, usually subject to the funder's consent and to a covenant test on the new buyer. If nobody suitable takes it on, you are back to a buyout. Owners who expect to sell inside the term should read the assignment and buyout wording together, because those two clauses decide how saleable the building is while the agreement runs.
End of term options
At expiry the contract will already have fixed the options, and they usually amount to three: removal and making the roof good, purchase at a price or formula set out in the agreement, or extension on pre agreed terms. Ask who pays for removal, what condition the roof is returned in, and whether an extension is at your option or the funder's. These are cheap to negotiate at the start and impossible to negotiate at the end.
FIG. 2 The term, the indexed rate and the three ways out
The same markers as a list
| Point in the term | What is fixed there |
|---|---|
| Signature | The initial rate, the indexation mechanism, the term length, the buyout formula and the end of term options are all settled here. Everything below is read off this document. |
| Each indexation date | The unit rate steps up by the mechanism agreed at signature, most often against a published inflation measure. Ask for the worked schedule across the full term. |
| Buyout window | You pay the sum the formula in the agreement produces and take ownership of the system. Whether that is available at any point or only on set dates is written into the contract. |
| Assignment | On a sale of the building or a lease assignment the agreement passes to the incoming party, usually subject to the funder's consent and to a covenant test. |
| End of term | Removal and making the roof good, purchase at the price or formula set out in the agreement, or extension on terms already written down. |
Termination for cause
Default rights exist on both sides of a PPA contract, and they are narrow. In practice the funder's rights are the broader ones, because it has the capital at risk. Poor performance by the system is dealt with by availability or output warranties rather than by a right to walk away, so check what those warranties actually promise and what the remedy is when they are missed.
Contract management over the term
Contract management is the work of living with the agreement once the array is running: reading the energy meter, checking the invoices against the indexed rate, tracking availability against the warranty and keeping the paperwork where the next finance director can find it. Nobody sells a PPA on its contract management, and it is the part most often forgotten.
Give one person the PPA contract, the meter readings and the indexation clause, and have them check a bill properly once a year. Two things go wrong otherwise. An indexation step is applied that the PPA contract does not support, and nobody notices for three years. Or the building is sold and nobody can find the agreement, the assignment wording or the buyout schedule during the due diligence that follows.
The other three routes
Buying the array outright
What you own
A capital purchase is the route in which you buy the array outright, so you own the system from day one along with every unit of solar energy it generates, the export income and the certificates.
There is no funder with an interest in your roof, nothing registered against the title, and nothing for a buyer's solicitor to raise if you sell. Over a long hold a capital purchase is almost always the cheapest route in total cost, because you are not paying anyone else for the use of their capital.
The tax position
The special rate pool is the capital allowances pool that holds expenditure on integral features of a building, and HMRC treats solar panels as integral features, so a commercial array goes into it.
Special rate expenditure can be covered by the Annual Investment Allowance, subject to the limit and to whatever else your company has spent that year, and gov.uk sets out the current position under capital allowances. We do not calculate your relief and we are not qualified to. Send the quotation to your accountant and ask what the company can claim in the year of spend.
SOURCE
HMRC sets this out in its Capital Allowances Manual at CA22335, checked September 2026.
SEE ALSO
The wider picture, including VAT and why there is no general grant for commercial solar, is
on our grants and tax page.
Asset finance and hire purchase
How repayment is structured
Hire purchase is a form of asset finance in which a funder buys the array, you repay it over an agreed term, and title passes to you at the end.
There is typically a deposit at the start and a small option fee on the final payment. The appeal is that you end up owning the asset, the solar energy and the export income without the capital leaving the business on day one, which matters when the same money is wanted for racking, vehicles or stock.
Security, guarantees and covenant
Funders lend against the covenant of the company, not against the panels, because a part used rooftop array is poor security. Expect filed accounts to be read closely, expect a debenture on larger facilities, and expect personal guarantees to be asked for from the directors of smaller companies. If a personal guarantee is on the table, that is a decision for you and your solicitor, not a formality to sign at the survey.
Operating lease and rental
An operating lease is an agreement under which the funder owns the array throughout the term and you pay a rental for its use.
Because ownership stays with the funder, the funder claims the capital allowances and prices that benefit into the rental. Terms are often shorter than a solar power purchase agreement and the commitment is easier to unwind, but you are still renting rather than owning, and the export position depends on the lease.
Whether the rental sits on or off your balance sheet depends on the accounting standard your company reports under, and IFRS 16 and FRS 102 do not treat leases the same way. Anyone who tells you that leasing is automatically off balance sheet is describing an older set of rules. Ask your accountant how it lands in your accounts before you use that as the reason to choose it.
The four routes side by side
| Route | Cash on day one | Who owns the array | Capital allowances | Export income | Fits when |
|---|---|---|---|---|---|
| Capital purchase | Full cost | You, from day one | You claim | Yours | Freehold, cash available, long hold |
| Asset finance or hire purchase | Deposit only | You, at the end of the term | Usually you | Yours | You want the asset, capital is committed elsewhere |
| Operating lease | First rental | The funder | The funder | Depends on the lease | Rentals off the capital budget, shorter commitment |
| Solar power purchase agreement | None | The funder, for the term | The funder | The funder | Long lease or freehold, no capital, no appetite for the asset |
General positions, not advice on your company. Allowance and accounting treatment vary with the exact structure of the agreement and with the standard you report under. Your accountant decides this, not us.
Choosing the right route for your building
The right funding route for a building is decided by three questions, and none of them is about the panels.
Do you want the asset on your own balance sheet, with the allowances and the solar power that go with it? How long do you control the roof, as owner or as tenant? And what is the capital you would spend on an array otherwise earning inside the business, given the other calls on the resources of a trading company? Answer those and the route usually picks itself.
A PPA EARNS ITS PLACE WHEN
- There is no capital to commit and no appetite to own generating plant
- You control the roof for longer than the funding term, as owner or as tenant
- The building runs hard through daylight hours, so most of the generation is consumed on site
- The plant risk on the inverters and the monitoring is worth paying a funder to carry
IT COSTS MORE THAN IT SAVES WHEN
- The capital is available and there is no better use for it inside the business
- The unexpired lease is shorter than the term a funder needs
- The capital allowances and the export income are worth more to you than to the funder
- You expect to sell the building inside the term
Where the answers are cash available, long hold and no better use for the money, a capital purchase wins on total cost almost every time, and it is the only route that leaves the renewable generation and the certificates in your own hands over the long term. Where the capital is committed but you still want the asset, asset finance does the same job with interest attached. A solar power purchase agreement earns its place when you have neither the capital nor the appetite to own generating plant, and it is the only one of the four that turns the roof into energy you simply buy. An operating lease sits between the two, and is chosen more often for how it lands in the accounts than for its total cost.
FIG. 3 The four routes against the four questions that decide it
| Capital purchase | Asset finance or hire purchase | Operating lease | Solar power purchase agreement | |
|---|---|---|---|---|
| Who owns the array | You, from day one | You, at the end of the term | The funder | The funder, for the term |
| Who claims the capital allowances | You | Usually you | The funder | The funder |
| Who carries the plant risk | You, with the equipment warranties | You, with the equipment warranties | As the lease sets out | The funder, for the term |
| What happens at the end of the term | Nothing to settle. It stays yours | Title passes to you | Agreed in the lease | Removal, buyout or extension |
- sits with you
- sits with the funder
- decided by the document you sign
What the process looks like from enquiry to first generation
The commercial solar process is the same for all four funding routes until the contracts diverge, and on a warehouse it usually runs three to six months.
Most of that is waiting on the network operator rather than on anyone with a ladder.
- Survey and measurement. The roof is measured, the covering and the purlins are checked, and the usable area is worked out once rooflights, plant and shading are taken off. The roof survey is the document everything else is built on.
- Yield model against your consumption. Half hourly data from your energy supplier is set against modelled generation, which produces the self consumption figure that drives both a payback and a PPA rate.
- One pack to every funder. The same site pack goes out to each funder, so the quotations that come back are comparable. This is the part of the process occupiers most often get wrong on their own.
- Connection and contract in parallel. The G99 application goes to your network operator while the solicitors read the power purchase agreements or the finance documents. The export limit the operator grants can change the design, so it starts early.
- Installation and commissioning. Our MCS-certified partner installs and commissions the system, registers it, and hands over the certificate a supplier needs before it will pay under the Smart Export Guarantee.
HAVE READY
Have the filed accounts, the lease and twelve months of half hourly data ready before you
start and the process is materially shorter, because those three documents are what every
funder asks for first.
SEE ALSO
What a funder looks at before it quotes
Funders ask a narrow set of questions and they ask them early, so it saves time to have the answers ready.
Filed accounts and the trading history behind them. Who owns the building, and if you do not, how many years the lease has left and whether the landlord will consent to the works and to any security over the roof. Half hourly consumption data from your energy supplier, because the proportion of generation used on site is what makes the numbers work. The condition and remaining life of the roof covering, since nobody funds a twenty year asset sitting on a roof with five years in it. And the connection position with your network operator, because an export limit that is refused changes the model.
We gather those during the survey so that one set of facts goes to every funder. It also keeps the process short: funders with the balance sheet and the resources to hold a twenty year asset are not short of enquiries, and the ones that answer quickest are the ones sent a complete site pack rather than a postcode. Four versions of the same site produce four quotations that cannot be compared.
Lease length, landlord consent and the roof
The most common reason a commercial solar scheme stalls is roof control rather than cost: the occupier does not hold the building for long enough to cover the funding term.
As a rough rule, the funding term needs to sit comfortably inside the unexpired lease, and the landlord has to agree in writing to both the installation and to whatever long-term security the funder wants over the roof. Where the landlord is willing to fund instead, the conversation changes: the array becomes the landlord's asset and the tenant buys the output under a private wire arrangement, which is a corporate PPA in all but name.
Where a roof is nearing the end of its life, re-sheeting before the array goes on is nearly always cheaper than stripping and refitting panels later.
NOTE
We would rather tell you that at survey stage than let a funder discover it in year three.
SEE ALSO
You can see the network operator and the modelled yield for your area on our locations pages.
Where we sit
What we arrange and who installs it
Lenzie Consulting Ltd arranges the survey, the design and the installation through our MCS-certified partner, and introduces you to funders who quote commercial solar and solar power purchase agreements. We are not authorised or regulated by the Financial Conduct Authority and we do not give financial, tax or legal advice. Finance and leasing to a limited company for business purposes is generally unregulated business lending, which means the protections that apply to consumer credit do not apply to you. Sole traders and small partnerships can fall inside regulation depending on the agreement, and a funder will tell you which side of the line you are on.
We do not publish case studies or testimonials, because we would rather show you the measured numbers for your own roof than someone else's. The resources on this site are written for that purpose: the cost arithmetic, the survey method and the comparison between capital purchase and PPAs, all of it free to read before you speak to anybody. Take your own tax and legal advice before you sign anything. We put the options and the measured numbers in front of you, and we tell you when none of them work on your roof.
Ask what a PPA looks like on your roof
Send the postcode, the rough footprint and roughly what you spend on energy a year. We come back with what the roof can carry, what it would generate against your consumption, and what a capital purchase, asset finance, a lease and a solar power purchase agreement each look like on those figures.
No survey fee and no obligation to proceed. We pass your details to our MCS-certified installation partner and to funders so they can quote.
Questions about solar PPAs and commercial solar finance
- What is PPA in solar?
- A PPA in solar is a long-term contract under which one party owns and operates the solar array and the other agrees to buy the energy it generates, at a stated price per kWh, for a stated number of years. PPA stands for power purchase agreement. On a warehouse roof the generator is a funder and the buyer is the occupier of the building. The same instrument is used across large renewable energy projects, which is why a rooftop proposal borrows its vocabulary from the wholesale energy market. The defining feature is that you are buying energy rather than buying an asset.
- What are the downsides of a solar PPA?
- The downsides of a solar PPA are that the generation belongs to the funder, that the roof is encumbered for the term, that the unit rate is indexed, and that exit is by formula rather than by notice. You do not own the generation, so the value of every unit the roof produces for the length of the term sits with the funder rather than with you, along with any export income and the renewable energy certificates. The agreement is long, it is usually secured by a lease or licence over the roof that is registered against the title, and it restricts what you can do to that roof, including re-sheeting. The unit rate is normally indexed, so it rises over time rather than staying flat. Exit is by a buyout formula written into the contract rather than by notice. On a sale of the building, the buyer inherits the agreement and their solicitor will read it. None of that makes a PPA wrong. It makes it a property transaction as well as an energy one, and it should be priced and lawyered as both.
- What are the current solar PPA prices in the UK?
- Solar PPA prices in the UK are quoted in pence per kWh and settled deal by deal, so there is no published national figure and any page that quotes one as the current solar PPA price is guessing. Rates are set against the cost of building your specific system, the cost of the funder's capital, the modelled output of your roof and how much of that output you are expected to use on site. The only benchmark that decides whether an offer is good is your own position: the day rate on your current supply contract, and what your supplier is quoting for renewal. Ask for the initial rate, the indexation mechanism and a worked total over the full term, then compare all three against that. We do not publish a rate because we would be inventing it.
- How do you get out of a solar PPA?
- A solar PPA is exited through the provisions written into the contract, because a solar power purchase agreement carries no general right to terminate for convenience. Typically there are three routes. A buyout, where you pay a sum calculated by a formula set out in the agreement and take ownership of the system. An assignment or novation, where the agreement passes to the next owner or occupier of the building on a sale or a lease assignment, subject to whatever consent and covenant tests the funder has written in. Or termination for cause, which is narrow and usually runs in the funder's favour rather than yours. The figures and the tests are fixed on the day you sign, so the time to negotiate them is before signature rather than when you want out.
- Can a business get solar panels with no upfront cost?
- A business can put solar panels on its roof with no upfront cost through a solar power purchase agreement or through an operating lease, and in both cases a third party pays for the equipment and recovers the money over a term. There is no route in which the panels are free. The question worth asking a funder is what the total cost over the term looks like against your current day rate, not whether the first invoice is zero.
- What happens at the end of a solar PPA term?
- The end of a solar PPA term is governed by options fixed in the contract at the outset, and they usually amount to three: the funder removes the system and makes the roof good, you buy the system at a price or formula fixed in the agreement, or the agreement extends on terms already written down. Which of those you get is decided on the day you sign, not on the day the term ends, so it is worth negotiating at the start. Ask specifically what condition the roof is handed back in, and who pays for the removal.
- Is solar asset finance regulated by the FCA?
- Lending and leasing to a limited company for business purposes is generally outside the scope of Financial Conduct Authority regulation. Sole traders, small partnerships and unincorporated bodies can fall inside it depending on the size and type of the agreement. We are not FCA authorised and we do not give financial advice. We introduce you to funders and pass on what they quote, and you should take your own tax and legal advice before signing anything.
- Does a lease or PPA affect selling the building?
- A lease or a PPA can affect the sale of the building, because the funder normally wants security over the roof for the length of the term and that security is disclosed on the title. A buyer or their lender will want to see the agreement, the buyout position and any obligation to keep buying the energy. Owners who expect to sell inside the term should ask the funder for the assignment and buyout wording before they sign rather than after.