Solar PPA or buy your own — how UK businesses should think about onsite solar
Rooftop solar can materially reduce grid demand and hedge future price risk. Here's how a PPA compares to capex ownership, and when each option makes sense.
Why onsite solar is having a moment
The combination of falling panel and inverter prices, elevated grid-delivered p/kWh, and business customers wanting a credible renewable story has made rooftop solar the single most-asked-about generation option for UK SMEs and mid-market industrials. For sites with usable roof area and daytime load, the payback maths is usually straightforward.
Capex ownership
You buy and own the system. You keep every kWh generated, benefit from any export income, and take the depreciation. Cash outlay is meaningful and payback typically sits in the 5-10 year range depending on system size, roof orientation and how well daytime load matches generation.
Power Purchase Agreement (PPA)
A third party funds, installs and owns the system. You sign a long-term (10-25 year) agreement to buy the generation at an agreed p/kWh, typically below your grid unit rate and often index-linked. No capex; the trade-off is a longer contractual commitment and (usually) a lower total lifetime saving than ownership.
How to choose
Capex works when the business has balance-sheet capacity, wants maximum lifetime saving, and is confident the site occupancy is long-term. PPA works when preserving cash, avoiding depreciation, or de-risking ownership matters more. Either way, model the interaction with your supply contract: onsite generation reduces import volume, which changes the shape you present to suppliers and — on flexible contracts — your non-commodity exposure.
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