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Last updated October 2026.
How an on-site solar PPA works
An on-site power purchase agreement lets a funder install, own and maintain panels on your roof while you buy the electricity they generate at an agreed price, often for 15 to 25 years. There’s no upfront cost, but you don’t own the asset, and indexation, minimum offtake and lease terms all need careful review.
This page covers on-site solar PPAs, where the system sits on your own roof or land. For the wider family of power purchase agreements, including sleeved and virtual PPAs, see what a PPA is.
Under a solar power purchase agreement a third party funds, installs, owns and maintains a solar system on your roof or land, and sells you the electricity it generates at an agreed price per kWh for a long term, usually 15 to 25 years. You pay nothing up front. The PPA price is usually set below your current grid rate, and any saving is the gap between the two over the term, and the provider makes its return from the sale over the term.
At the end of the term the system is typically transferred to you, removed, or the agreement extended. Throughout, the provider carries most of the performance risk: if the system underperforms, it sells less electricity.
PPA, purchase or lease
| Route | Up-front cost | Who owns and maintains | Saving | Suits |
|---|---|---|---|---|
| Outright purchase | Full capital cost | You | Largest: full value of self-consumed and exported power, plus capital allowances | Businesses with capital and a long tenure on the site |
| Asset finance or lease | None or low; fixed payments | You, or lessor until paid | Large; payments offset against saving; tax treatment varies | Businesses that want ownership without capital outlay |
| Solar PPA | None | Provider | Smaller: gap between PPA price and grid rate; no capital allowances | Businesses that want to avoid capital outlay and maintenance |
The PPA saving is usually smaller than ownership because the provider needs its return, though there’s no capital outlay. Whether it stays a saving depends on indexation and how grid prices move. For organisations that cannot or will not deploy capital on energy assets, or that want to protect the balance sheet, it is often the only route that gets solar built at all.
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Terms that matter
Frequently asked questions
What is a solar PPA?
A power purchase agreement under which a provider installs and owns a solar system on your site and sells you the electricity it generates at an agreed price for a long term, with no up-front cost to you.
Is a solar PPA cheaper than buying panels?
The saving per kWh is smaller because the provider needs its return, but there is no capital outlay or maintenance risk. Ownership gives the larger total saving if you can fund it.
How long is a solar PPA?
Typically 15 to 25 years, with options to transfer, remove or extend at the end.
Can a tenant sign a solar PPA?
Only with the landlord’s agreement to roof rights for the term, and the agreement needs to survive a change of ownership or tenancy.
What happens if we use less electricity than expected?
Check the minimum offtake terms. Some PPAs require you to buy a minimum volume; others let surplus be exported with the value shared.
Does Clearsight Energy arrange solar PPAs?
No. Clearsight doesn’t arrange power purchase agreements or funded solar. If you’d rather buy a system, we can introduce vetted installer partners and help you compare their quotes, then set up your export tariff.
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Call us on 020 8036 5715, or email us, and we will take it from there.