Solar Carport Power Purchase Agreement (PPA)

A solar carport Power Purchase Agreement (PPA) is a common zero-capex commercial solar finance route in the UK. Under a PPA, an investor funds, builds, owns and operates the carport. The site owner signs a long-term agreement to buy the electricity it generates at a fixed price (quoted prices have typically fallen between 14p and 18p/kWh), well below current grid retail (commonly 38-52p/kWh). There is no capex outlay and the site owner does not own the asset; how the contract is treated in the accounts depends on its terms.

How PPAs work

Three parties are usually involved: (1) the PPA provider funds and owns the carport asset (often through a project SPV); (2) the off-taker, the business whose car park it is, signs a 15-25 year power purchase agreement; (3) an installer designs and builds the carport. The off-taker pays only for the kWh consumed at the contracted price. Surplus exports to grid under SEG, and the PPA provider usually takes that revenue. Under most contracts generation risk sits with the provider, because the off-taker pays only for electricity delivered; check the contract to confirm.

UK PPA pricing in 2026

Indicative UK market range, not an offer from this site: commercial solar carport PPA prices have typically been quoted at 14-18p/kWh fixed for 15-25 year terms, with annual escalators often RPI-linked at 2-3.5%. Grid retail for half-hourly metered commercial sites has commonly sat at 38-52p/kWh, which is where the commonly cited 25-40% day-one saving comes from. Actual prices depend on site size, credit strength, export arrangements and contract terms, so get several written quotes.

Who benefits most from PPAs

PPAs tend to suit: (1) Non-tax-paying entities like charities, NHS Trusts and universities, which cannot use AIA tax relief anyway; (2) Companies with capex hurdles, such as capex-light retail, hospitality or logistics operations where every £100k goes to revenue-generating use; (3) Buyers who want to avoid funding the asset, where the contract structure allows (how a PPA is treated in the accounts depends on its terms, so check with your auditor); (4) Buyers who do not want to manage a PV asset, since maintenance, replacement and warranty management usually sit with the PPA provider under the contract.

PPA economics — worked example

Illustrative figures, not a quote. Take a 300 kWp solar carport at a retail site generating 255,000 kWh/yr, with a PPA at 16p/kWh fixed. Year 1 site bill if buying from grid at 47p/kWh: £119,850. Year 1 site bill from PPA solar: £40,800. Year 1 saving: £79,050, with zero capex. Over 25 years at 2.5% RPI escalation on the PPA, the total saving on these assumptions is ~£2.4m (vs the grid alternative).

PPA contract terms — what to scrutinise

Commercial PPA contracts can run to 75-150 pages. The critical clauses to check: (1) price escalator — fixed vs RPI; (2) volume commitment — minimum take-or-pay; (3) force majeure — what happens in extreme weather; (4) exit / step-in rights — the option to buy out the asset at year 5/10/15; (5) change of ownership — site sale, business sale; (6) maintenance and uptime guarantees — what happens if generation drops below threshold.

How a carport PPA is procured

A competitive PPA mini-tender usually runs: (1) feasibility, design and planning are prepared; (2) several independent PPA providers bid against the technical pack; (3) the buyer compares PPA pricing side-by-side; (4) the selected provider funds the asset and signs the PPA; (5) the installer builds it.

What to ask a PPA provider

Ask each provider, in writing: the price per kWh and the escalator; the contract term, and the exit and buy-out dates with their pricing; the minimum volume commitment; what happens if the site is sold or the use of the car park changes; who maintains, insures and replaces the equipment; what uptime or performance guarantee applies; what security the provider offers; and the decommissioning terms. Ask for offers in the same format so they can be compared, and have independent legal counsel review the contract.