Rates · 2026
Solar PPA Rates in the UK: 2026 Benchmarks
Last updated 15 October 2026 · Figures indicative
Short answer: UK on-site commercial solar PPA rates in 2026 typically range from 10p to 14p per kWh, with large industrial projects (250kWp to 5MW+) at around 8–12p. That compares with roughly 24–28p/kWh for typical business grid electricity. Your rate depends on system size, site yield, term, indexation and your credit profile.
2026 solar PPA rate benchmarks
| System size | Typical rate | Typical term | Notes |
|---|---|---|---|
| 50–100 kWp | 12–14p/kWh | 20–25 years | Smallest sizes funders usually consider |
| 100–250 kWp | 10–14p/kWh | 15–25 years | Most common commercial rooftop band |
| 250 kWp–1 MWp | 9–12p/kWh | 15–25 years | Warehouses, factories, distribution |
| 1–5 MWp+ | 8–12p/kWh | 15–25 years | Industrial, often with private wire |
- 50–100 kWp: higher rates reflect fixed survey, legal and grid costs spread over fewer kWh; some funders set a 100kWp minimum.
- 100–250 kWp: Indicative UK on-site commercial rooftop PPA range; subject to site survey, term and credit.
- 250 kWp–1 MWp: overlaps the commercial and industrial ranges; rate depends mostly on self-consumption and credit.
- 1–5 MWp+: Indicative for large industrial on-site systems of 1MWp and above, often with private wire.
- Grid comparison: Typical UK business 1-year fixed unit rates (market averages ≈25–27p, Aug 2026); varies by size, region and contract.
What drives your PPA rate
- System size — bigger is cheaper per kWh.
- Site yield and region — sunnier southern sites generate more kWh from the same kit.
- Self-consumption — funders earn more when you use most of the output.
- Term — longer terms lower the rate.
- Indexation — indexed contracts start lower.
- Credit profile — stronger accounts mean lower risk and lower rates.
- Roof works — if the provider must repair or over-clad, the rate rises.
Fixed vs indexed vs stepped rates
| Structure | Year 1 | Year 10 | Year 20 | 20-yr average |
|---|---|---|---|---|
| Fixed | 12.5p | 12.5p | 12.5p | 12.5p |
| Indexed 2.5%/yr | 10.5p | 13.1p | 16.8p | 13.4p |
| RPI-style 3%/yr | 10.0p | 13.0p | 17.5p | 13.4p |
| Stepped +10% every 5 yrs | 11.0p | 12.1p | 14.6p | 12.8p |
The lowest year-one rate is not always the cheapest deal: compare the 20-year average against what you expect to pay for grid power.
Discount-to-grid structures
Some PPAs price at a fixed percentage below your grid tariff — for example 30% off. You always save versus the grid, but your rate rises and falls with the market, so you lose the price certainty of a fixed rate. Check how the reference grid price is measured.
How to judge a PPA quote
- Is the rate fixed, indexed or stepped, and is there a cap?
- What is the 20-year average rate and total expected cost?
- Is there a minimum take or deemed-generation clause?
- What does the buy-out schedule look like?
- Who pays for roof works, grid upgrades and legal fees?
- Is the generation forecast realistic for your region?
See also commercial solar costs if you are weighing up buying.
Rate history and outlook
UK PPA rates rose in 2022–23 alongside interest rates and equipment costs, then eased as panel prices fell. Business grid rates remain well above PPA levels as of August 2026. Future rates will depend on interest rates and equipment prices; we don't forecast them — benchmarks here are reviewed quarterly.
Methodology and sources
Benchmarks are indicative ranges compiled from UK installer and funder offers for on-site rooftop PPAs, checked against DESNZ business electricity price statistics; see the Sources section below. Every figure is held in one data file with an "as of" date and is updated when the market moves. Your site-specific rate requires a survey and credit check.
Try your own numbers in the solar PPA calculator or read the solar PPA guide.
Put these rates in context: our complete guide to solar power purchase agreements, the cost of buying a system outright, how to compare PPA providers' quotes, whether a PPA or purchase pays more and estimate savings at your own rate.
Solar PPA rate FAQs
Is 12p/kWh a good solar PPA rate?
For a typical UK on-site commercial rooftop PPA in 2026, 12p/kWh sits in the middle of the usual 10–14p range. Whether it is good depends on system size, term and indexation: 12p fixed for 20 years is stronger than 12p rising with RPI. Compare total cost over the term against your grid rate.
Do solar PPA rates rise each year?
It depends on the contract. Some PPAs fix the rate for the whole term; others rise each year by a set percentage or in line with an inflation index such as RPI or CPI. Indexed rates usually start lower. Compare the total cost over the term, not just the year-one rate.
Can we negotiate a solar PPA rate?
Yes. Rate, term, indexation, buy-out schedule and who pays for roof works are all negotiable. Getting comparable offers from more than one provider on the same system design, and offering a longer term or a larger roof, are the most effective levers.
Why are larger systems cheaper per kWh?
Fixed costs — design, scaffolding, grid application, legal work and connection — are spread over more kWh, and larger systems buy equipment at lower unit cost. Funders also prefer fewer, larger projects. That is why industrial sites often see 8–12p/kWh.
Sources
- GOV.UK — Greenhouse gas reporting: conversion factors (DESNZ)
- legislation.gov.uk — The Non-Domestic Rating (Plant and Machinery) (Amendment) (England) Regulations 2022, SI 2022/405
- HMRC — Capital allowances: Annual Investment Allowance and first-year allowances
- Energy Networks Association — G98 and G99 connection requirements
- European Commission JRC — PVGIS photovoltaic yield tool
Price ranges for larger systems, running costs, batteries and PPA rates are indicative market ranges from UK installer, funder and market sources; no official series exists above 50kWp.
What rate could your site get?
Describe your building and energy use for personalised guidance on whether a PPA fits.
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