commercial solar ppa funding

How does a solar PPA work? 
(Power Purchase Agreement)

What is a PPA?

A PPA (Power Purchase Agreement) is an agreement between the funding provider and an energy user to install a solar solution and the provider charges the tenant for the electricity produced, usually at a much reduced rate. 


The key benefits for the consumer is no up front costs and greener, cheaper energy. 

Frequently Asked Questions (FAQ's)

  • How does PPA work? (Power Purchase Agreement)

    PPA is an agreement between the provider and tenant to install a solar solution with no up front cost and the provider charges the tenant for the electricity produced, usually at a much reduced rate. 

  • How much do I pay for electricity with a PPA?

    The price can vary dependant on installation cost and efficiency of the system. The average electricity prices for grid prices in 2023 was 38.4 p/kWh. The average electricity price for PPA provided electricity in 2023 was 15.9 p/kWh. 

  • How much will I save on electricity with a solar PPA?

    The saving is dependent on solar solution size, efficiency and usage. The average reduction in energy savings is 30-50%. 

  • What are the advantages of Solar?

    Solar is a renewable energy, which turns the suns rays into electricity. Therefore there is no burning of fossil fuels or emissions. 

  • Can I cancel a PPA?

    PPA’s can usually be cancelled at anytime. There are clauses dependent on when you cancel. The tenant or the provider can buy back the system. 

  • What happens to a PPA if we move?

    PPA’s can be transferred. Therefore the new tenant of a building can also take advantage of the system. If a PPA is cancelled before the contract date the system can be moved to new premises or cancellation clauses can be agreed. 

  • How are PPA / electricity prices calculated?

    Prices are calculated dependant on cost of installation, condition / access of roof, contract length and usage. Comgen maximise efficiency to make the biggest savings. 

  • How do I qualify for a PPA?

    Each PPA provider will have different qualifications. It can depend on lease terms, solar size, company finances. Comgen uses private funding and is a lot more flexible than financial institutions like banks. 

  • Can I change my electricity supplier under a PPA?

    Yes, you can choose different energy suppliers for your grid electricity. 

  • What happens if the solar doesn’t not produce enough electricity for my needs?

    The solar is designed to supply as much energy as you use. The solar supply is restricted by size and sunshine. Therefore any additional electricity required will be topped up via your grid supplier. 

  • How much carbon does solar offset?

    A single solar panel can offset 900kg of CO2 a year. A typical warehouse roof installation offsets on average 100 metric tons of CO2 a year. 

  • What is the minimum size solar system for a PPA?

    The minimum size is dependant on the PPA provider. A lot of PPA providers have a minimum of a roof size of 1,000m2. Comgen have no minimum.

Cost and Savings

Commercial solar rooftop installations are typically priced at £1,000 to £1,500 per kW, this can be an expensive up front cost option for business energy users.


Example

A small 100kW system will cost an estimated £100,000 to £150,000.


Taking advantage of a commercial solar PPA you could benefit from substantial savings being an estimated £100 per kW annually, using the example above you would expect your energy bills to reduce by £10,000.


The main source of savings comes from the reduced electricity bill. Your grid supplier is typically charging 34p/kWh (average 2024). The commercial solar PPA price is typically up to 50% of the grid rate and using the example above the saving would be 17p/kWh.


Using the 100KW example, the CO2 saving per annum would be approximately 219 metric tonnes.


Consider the impact of adopting solar power for long-term savings and a sustainable energy approach. Contact us today to explore how rooftop solar panels can benefit your business!


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