Commercial solar funding, leases and PPAs
A neutral checklist for comparing purchase, finance, roof lease and power purchase agreement structures.
Reviewed 2026-09-24 · 6 min read
Understand ownership
A capital purchase normally means the business pays and owns the equipment, subject to its contract. Finance can change cash flow, security and ownership. Under an onsite PPA, a funder may own and operate the system while the site buys generated electricity. These structures are commercially different.
Ask who holds warranties, insures equipment, repairs the roof, receives export income and handles removal if the building is sold or the tenant leaves. Never compare purchase price with PPA unit price without matching assumptions.
Define the electricity being sold. An onsite PPA may charge for metered generation consumed behind the site meter, while electricity imported from the grid and exported surplus can follow separate contracts. Ask which meter is authoritative, how estimated readings are handled and whether the customer has audit rights.
Check whether the funder can assign the contract, take security over the equipment or require consent for building works. The business should know whether a lender, landlord or purchaser could become involved if the site changes hands.
Read pricing mechanics
Ask whether price is fixed, indexed or escalated, and whether minimum purchase or deemed generation applies. Clarify outages, curtailment, negative prices, export, underperformance, change of control, refinancing and early termination. Request metering, billing, reconciliation and data schedules.
Test the contract against events that are easy to overlook: a roof leak, a temporary shutdown, a change in business hours, a grid outage, equipment replacement or a material fall in demand. Ask who bears the cost and whether the customer still pays during a period when electricity cannot be generated or consumed.
Compare the proposed PPA rate with the business’s realistic avoided import cost, not a headline tariff. Include standing charges, taxes, demand charges, export value and the cost of buying residual electricity. A finance adviser can help assess accounting and balance-sheet treatment.
Roof and end of term
A lease or licence should cover access, maintenance, insurance, roof replacement, damage, removal and reinstatement. Align term with roof and occupancy. Model lower generation, changed load, downtime, inflation and exit costs; distinguish contractual obligations from estimates.
At the end of the term, the system may be purchased, extended, removed or transferred, depending on the contract. Require a clear valuation method and responsibility for making good the roof. If removal is expected, ask what condition the roof and electrical installation will be left in.
Obtain legal, tax, technical and insurance advice proportionate to the project. A PPA is a long-term commercial commitment, not merely a different way to describe an equipment quote.
Check whether the contract contains performance reporting, inspection rights and a remedy if the system is unavailable. A customer may not control the equipment, but still needs timely evidence that invoices and generation records are correct.
Make an internal approval record explaining why the chosen structure suits the site’s lease, cash position, risk appetite and energy use. That record helps future property and finance teams understand obligations that can outlast the original project sponsor.
Common questions
Is a PPA free solar?
Not necessarily. The funder may pay for equipment, but the site buys electricity under a contract with obligations.
Can a PPA follow a sale?
Only if assignment and change-of-control terms permit it and the buyer agrees.
Should I lease my roof?
Only after legal, technical, insurance and end-of-term due diligence.