Financing Business Solar Through PPAs: What you need to know! 

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Rob Kerr
13th May 2024
Two engineers in white hard hats fitting a solar panel on a commercial roof, with a blue sky background

Is solar right for my business?

When it comes to generating clean, green, renewable energy on site, solar panels are a great choice for most commercial property owners. Reducing your reliance on the grid can help to meet stringent compliance obligations and improve your ESG performance, while simultaneously protecting your business against rising energy costs. After all, by decentralising supply, you not only improve energy security, but also benefit from a low, fixed rate for the energy that you do use.

Experts can help you to assess the feasibility and specific benefits of installing solar, based on your location, energy use and roof space. They may also offer options to adopt additional technologies to maximise the amount of green energy available to your business, such as battery storage.

Financing business solar

There are three key ways to finance your business solar installation: by purchasing panels outright; by leasing panels through a trusted provider; or by embracing a Power Purchase Agreement (PPA). You should give each of these options careful consideration as part of your buying decision.

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Why choose a Power Purchase Agreement?

PPAs allow your business to benefit from solar energy generation without paying the upfront cost of purchasing and installing solar panels. This minimises risk and can also help to speed up internal approvals. With a PPA, the provider owns the system and is responsible for installing, optimising and maintaining it. The customer simply agrees to purchase the energy produced at a contracted rate, which is typically far lower than market rates. As a result, businesses can benefit immediately from a reduced carbon footprint and lower energy bills, with no upfront costs.

View of a sunrise with commercial solar panels on a rooftop in the foreground and trees in the background
"Power Purchase Agreements make it easy for businesses to get started on their journey to Net Zero. PPAs take care of both the initial investment and ongoing maintenance so that businesses can focus their capital - and attention - on their core activities."
John Behan, AMPYR Distributed Energy 

What happens after the system is installed?

Once installed, you simply pay a fixed rate for the solar energy you consume (pence per kWh, no standing charge). You can agree a separate standard energy contract with a utility provider for any additional energy needs you may have.

This means that you benefit from total peace of mind – not just now, but in the long term. As the provider is responsible for optimising and maintaining the asset, there are no additional costs to pay throughout the lifetime of the PPA (including insurance, emergency callouts, part replacements, cleaning and monitoring costs). After the PPA term ends (typically 25 years), the asset will be transferred to your business and you can continue to benefit from the renewable energy it produces.

Getting started on your solar journey

The sooner you start, the faster your business will benefit. As a first step, contact a member of Solar Energy UK – such as AMPYR Distributed Energy – for a completely free, no obligation consultation.

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