A Power Purchase Agreement (PPA) is the most common funding route in 2026 for care home operators without capital appetite. A third party owns, installs, and maintains the solar system. The home buys the electricity it generates at a fixed per-kWh tariff — typically 8p–14p, locked for 15–25 years — versus a grid import rate now at 27p/kWh. Day one cashflow positive. No capex. No depreciation on the balance sheet.

How a care home PPA works

Feasibility and proposal. We model the system from your meter data and provide a PPA tariff proposal. You see the gap between the PPA tariff and your current grid rate — typically 13p–19p/kWh saving on self-consumed energy.
PPA contract. A 15–25 year contract between the home and the PPA provider (usually a special-purpose vehicle backed by an infrastructure fund or specialist solar investor). Contract specifies the tariff (fixed or indexed), the annual generation guarantee, the maintenance arrangement, and the buyout option from year 7+ at fair market value.
Install and commissioning. The PPA provider funds and owns the install. We deliver the technical work as the EPC contractor. From signed contract to commissioning: typically 12–20 weeks.
Operation. Solar generates. You pay monthly invoices at the PPA tariff for the electricity used. The PPA provider keeps the SEG export income. Maintenance, monitoring, and warranty are the PPA provider's responsibility.
End of contract. Three options: extend the PPA at renegotiated rates, exercise the buyout option (typically year 7 or later), or hand the asset back to the PPA provider at end of contracted term.

Worked example: 50-bed home, 50 kWp PPA

Item	Year 1	Year 10	Year 20
Solar generation (kWh)	47,000	44,500	42,200
Self-consumed (50%)	23,500	22,250	21,100
PPA tariff (£/kWh, RPI-linked)	£0.11	£0.14	£0.18
Grid alternative (£/kWh, assume +3% inflation)	£0.27	£0.36	£0.48
Net saving on self-consumed (£/yr)	£3,760	£4,900	£6,330
Exported (SEG kept by PPA provider)	23,500	22,250	21,100

Total 20-year saving: approximately £95,000 — zero capex outlay.

When PPA is the right route

Care home operator without capital appetite or capital constraints
Charity hospice with preference for preserving cash for resident care
Group operator wanting balance-sheet-light rollout across multiple sites
Building with 20+ years of expected occupation
Operator who doesn't want maintenance responsibility

When PPA isn't the right route

Tax-paying operators with capital available — capital purchase + AIA usually beats PPA on lifetime economics
Buildings likely to be sold within 7 years (PPA novation is possible but adds sale friction)
Hospices where donor preference favours visible capital ownership
Charity operators where Charity Commission restricted-fund tracking favours owned assets

Key contract terms to negotiate

Tariff escalation. Fixed, RPI-linked, or CPI-linked. RPI-linked typically reasonable; avoid uncapped commodity-linked formulas.
Buyout option. Confirm year-7+ buyout right at fair market value. Some providers offer year-5; some defer to year-10. Earlier is better for sale flexibility.
Generation guarantee. The PPA should guarantee minimum annual generation (typically 95% of model). Falls below trigger compensation.
Maintenance scope. Confirm panel cleaning, inverter replacement, monitoring, and battery (if specified) are all PPA provider's responsibility.
Building modification rights. Confirm you can extend the building, replace the roof (with reasonable notice), and modify the electrical system without breaching the PPA.
End-of-contract handover. Confirm asset condition standard at handover if you don't exercise buyout.
Insolvency protection. Confirm the PPA provider's covenant strength — what happens if the PPA SPV fails? Most reputable providers use ring-fenced SPVs with parent-company guarantees.

SEC R reporting under a PPA

For SECR-reporting care groups, electricity supplied under a PPA is reported as Scope 2 (purchased electricity) — but with a clear renewable provenance. Most groups now report PPA-supplied electricity separately from grid-supplied, demonstrating progress toward Scope 2 reduction. This is a meaningful ESG investor signal.

Insurance, FRA, and CQC under a PPA

Under most PPA contracts, the system is the PPA provider's asset but the responsibility for safe operation on your premises remains shared. We coordinate with your insurer, FRA assessor, and registered manager exactly as we would for an owned system. CQC Well-led KLOE evidence pack provided as standard regardless of ownership model.

For a comparison of PPA vs lease vs capital purchase, see also solar leasing for care homes and capital allowances.

What a typical PPA contract looks like

A care home PPA contract is typically 35–70 pages of legal documentation. The key clauses to read carefully:

The licence to install. Grants the PPA provider rights to install, operate, and access the solar system on your roof for the term of the contract. Should include reasonable access provisions and not give the PPA provider unrestricted access to your premises.
The energy supply clause. Defines what electricity you're buying — usually "all electricity generated by the system" rather than a fixed quantity. Should clarify what happens if the system underperforms.
The tariff clause. The price per kWh and how it changes over time. Fixed-and-RPI-linked is reasonable; uncapped commodity-linked formulas are not.
Generation guarantee and remedy. If annual generation falls below modelled output (typically 95% threshold), what's the remedy? Compensation, accelerated buyout option, or contract termination?
Maintenance scope and access. The PPA provider is responsible for system maintenance — clarify what's included (panel cleaning, inverter replacement, monitoring, battery if installed) and notice required for access.
Buyout clause. The right to buy the system at fair market value from year 7+ (some providers offer year-5; some defer to year-10). Earlier buyout is better for flexibility.
Novation clause. If you sell the home, the PPA can be novated to the new owner (subject to credit check). Should include time-bound novation deadlines and clear pricing if novation requires PPA amendment.
Building modification clause. Your right to extend the building, replace the roof, modify the electrical system. Reasonable contracts include notice provisions and cost-sharing for temporary disconnection if needed.
End-of-contract handover. What condition is the system in at end of term? Who is responsible for decommissioning if you choose not to buyout?
Insolvency protection. What happens if the PPA SPV becomes insolvent? Ring-fenced SPVs with parent-company guarantees are standard for reputable providers.
Dispute resolution. Arbitration, mediation, or court route in case of contractual dispute.

Due diligence on PPA providers

Not all PPA providers are equal. Before signing, verify:

Track record — at least 5+ years of operating PPAs in the UK
Portfolio size — typically 50+ MW under management indicates established operations
Maintenance capability — in-house O&M team or contracted to a reputable specialist
Financial backing — name of parent company or backing infrastructure fund
References — operators in the care sector who can confirm post-install service quality
Insurance — Public Liability £10m+ minimum, Professional Indemnity for the technical advice

We don't operate as a PPA provider — we work as the EPC contractor on PPAs structured by your chosen funder, and we provide independent advice on contract terms before you sign.

Charity hospices and PPA

For charity hospices considering PPA vs capital appeal: both routes work. The PPA route is faster (no fundraising lead time), zero capex, immediate saving available for resident care from year one. The capital appeal route allows donor recognition (naming plaques, named generation segments) and preserves the asset on the charity's balance sheet. We've delivered both — the right choice depends on the hospice's fundraising capacity and donor base.

Solar PPA for Care Homes