What is a Power Purchase Agreement (PPA)? A Guide for Schools

Written by Declan Adams, Managing Director 

A Power Purchase Agreement (PPA) gives schools and academies access to solar energy on a simple premise: no upfront cost, no ownership risk, and immediate savings on electricity bills. 

With rising energy costs and increasing pressure to meet sustainability targets, PPAs offer a practical, low-risk route to solar adoption. 

 

In this guide, we’ll cover: 

• What a Power Purchase Agreement is and how it works  

• Why a PPA is a great solution for a school 

• A real-world example with The Education Impact Trust 

 

What is a Power Purchase Agreement and how does it work? 

A Power Purchase Agreement (PPA) is a contract between your school and an energy provider. You agree to buy solar-generated electricity at a fixed, pre-agreed rate, typically lower than grid prices. 

The provider covers the cost, installation, and maintenance of the solar system. You simply pay for the energy it produces. 

Think of it as subscribing to cheaper, greener electricity – without owning the panels. 

 

How the PPA process works 

1. Site Assessment
   We assess your school to design a system that maximises solar generation and cost savings.  
2. Agreement
   We agree on pricing, contract length, and performance guarantees.  
3. Installation
   Systems are installed during school holidays to minimise disruption.  
4. Operation & Maintenance
   We manage performance, monitoring, and maintenance – so you don’t have to.  

 

Most solar PPAs last 10–25 years, giving schools long-term cost certainty in an unpredictable energy market. 

 

Legal and contractual considerations 

Key terms and conditions 

A PPA typically outlines: 

• Contract duration  
• Energy pricing structure  
• Performance guarantees  
• Responsibilities of each party  

Termination clauses 

Contracts may include early exit options under certain conditions, such as underperformance or breach of agreement. 

Transferability 

Many PPAs can be transferred if the site changes ownership, ensuring continuity and protecting long-term value. 

 

Why is a PPA is a great solution for a school? 

The Department for Education (DfE) requires schools to implement a Climate Action Plan (CAP) – a roadmap to reduce emissions and improve energy efficiency in line with the UK’s net zero targets. 

At the same time, schools face: 

• High and rising energy costs  
• Increasing demand from IT and facilities  
• Budget constraints  

Solar energy can reduce electricity costs by up to 60%: Last month, our solar installation at Walsall Academy covered 58% of the school’s energy needs.

However, upfront installation costs are often a barrier to schools.  A solar PPA removes that barrier. 

With a PPA, schools can: 

• Start saving from day one  
• Avoid capital expenditure  
• Reinvest savings into education and facilities  
• Reduce carbon emissions immediately  

 

Real-world example: Our work with Education Impact Trust 

We’re incredibly proud to announce the upcoming installation of a 350kWp solar system across five schools within Education Impact Trust. 

Not only will this significantly reduce energy costs while avoiding upfront investment for the trust but it will accelerate their progress towards net zero targets. 

The trust is forecast to save more than £36,000 in the first year alone, with projected savings of almost £950,000 over 20 years. 

We’ll be sharing more details about this Power Purchase Agreement in the coming months. 

 

Frequently Asked Questions about Power Purchase Agreements (PPAs) 

What happens at the end of a PPA? 

At the end of the agreement, schools typically have a few options: 

• Extend the PPA  

• Purchase the solar system at a reduced cost  

• Have the system removed  

In many cases, continuing to use the system provides the greatest long-term value, as the majority of costs have already been recovered. 

 

Can schools buy the system during or after the contract? 

Yes. Most PPAs include an option for schools to purchase the system, either during the agreement or at the end of the term. 

This provides flexibility if budgets change or if the school decides it wants full ownership of the asset. 

 

What if energy prices fall? 

PPAs are designed to offer price stability and long-term savings. Even if market prices fluctuate, schools benefit from: 

• Predictable energy costs  

• Protection from price spikes  

• Lower risk in volatile markets  

Historically, energy prices trend upward over time, making fixed-rate PPAs a strong long-term hedge. 

 

Reduce your energy costs immediately 

Our team can help you unlock solar savings with zero upfront cost. 

📍 Midlands: 01543 713026
📍 South: 02392 400547 

Or click “Get a Quote” below to receive an instant estimate for your school or organisation. 

---