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It has to recover capital cost, the funder's required return, operating costs and allocated risks, spread over the kilowatt-hours the model expects the array to generate and the site to use. Quotes are not comparable unless you know whether the rate is fixed or indexed, on-site or sleeved, and what is excluded. Wholesale prices, interest rates and build costs also move, so an undated typical rate would mislead." } }, { "@type": "Question", "name": "What does a commercial solar PPA unit rate have to recover?", "acceptedAnswer": { "@type": "Answer", "text": "The headline pence per kilowatt-hour is the output of a financial model, not a panel price list. The funder commits capital to design, modules, mounting, inverters, electrical works and often roof strengthening or switchgear, and that capital has to earn a return over the term the buyer can credibly commit to. 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Higher installed cost, lower yield, a shorter term, weaker credit, less daytime self-consumption or extra electrical and grid works push the rate up if the funder is targeting the same return." } }, { "@type": "Question", "name": "How does an on-site PPA price differ from a sleeved or off-site PPA?", "acceptedAnswer": { "@type": "Answer", "text": "An on-site PPA prices solar kilowatt-hours generated at the premises and used there. A sleeved or off-site PPA prices generation elsewhere, and a licensed supplier passes an agreed volume through the business's supply contract. The generator's strike price is only one layer: sleeve fees, balancing and how that volume matches the site's demand sit on the invoice as well. That structure is not a substitute for a single-site rooftop price, and the all-in figure still needs to be read for what it includes." } }, { "@type": "Question", "name": "Is a year-one discount against today's import quote the saving over the whole term?", "acceptedAnswer": { "@type": "Answer", "text": "No. A year-one gap only means something if you know what it is measured against and for how long. Many supply contracts are short-dated, while a PPA may run for many years and rise with an index, a fixed escalator, or a floating discount to whatever the import tariff becomes. If the PPA is indexed and the comparison is only a one-year quote, the opening gap can narrow, widen or reverse without either party having mis-stated year one. A longer term can support a lower opening rate only if occupancy, landlord consent and roof life cover those years." } }, { "@type": "Question", "name": "Is surplus export paid at the same rate as power used on site?", "acceptedAnswer": { "@type": "Answer", "text": "Usually not. Export is priced separately from power used on site, and it is often a weaker commercial arrangement than the on-site rate. Do not assume a domestic export scheme applies to a commercial installation without checking whether that scheme covers the site in question. If most of the modelled output would be exported, the funder will usually shrink the array, pay less for export, or both. Metering has to separate solar use, import and export, or the billed volume becomes a dispute about the price." } }, { "@type": "Question", "name": "Does the PPA rate cover the whole electricity bill?", "acceptedAnswer": { "@type": "Answer", "text": "No. It usually covers solar kilowatt-hours that are generated and, on site, consumed. Import for evening, weekend and winter load remains, as do standing charges and other non-commodity items on the supply contract. A lower unit rate on solar-matched load does not remove the rest of the electricity cost. 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Off-site sleeved PPAs suit larger buyers who can commit volume; they do not fix a single shop or small office whose problem is a rooftop and a daytime load." } } ], "about": { "@id": "https://kilowatts.uk/resources/how-commercial-solar-ppas-are-priced-uk/#content" } }, { "@type": "WebPage", "@id": "https://kilowatts.uk/resources/how-commercial-solar-ppas-are-priced-uk/#webpage", "url": "https://kilowatts.uk/resources/how-commercial-solar-ppas-are-priced-uk/", "encoding": [ { "@type": "MediaObject", "encodingFormat": "text/markdown", "contentUrl": "https://kilowatts.uk/resources/how-commercial-solar-ppas-are-priced-uk.md" }, { "@type": "MediaObject", "encodingFormat": "application/ld+json", "contentUrl": "https://kilowatts.uk/resources/how-commercial-solar-ppas-are-priced-uk.schema" } ], "name": "How commercial solar PPAs are priced: UK business guide", "headline": "How commercial solar PPAs are priced: UK business guide", "description": "Commercial solar PPAs are priced from capital, yield, daytime load, credit and term, not a UK-wide tariff. 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