Solar Power Purchase Agreements for Churches — Zero Upfront Cost Solar Explained

What is a solar PPA?

A Power Purchase Agreement (PPA) is a contract in which a third-party investor installs, owns, operates and maintains solar panels on your church building — and you agree to purchase the electricity they generate at a fixed or index-linked price per kWh for a defined term, typically 10–25 years.

The key characteristic: the church pays nothing upfront. The capital cost (panels, inverters, wiring, scaffolding, heritage design work) is borne entirely by the PPA provider. In return, the church commits to buying the electricity from the system for the contract term at a price below the retail grid tariff.

For cash-strapped parishes — particularly those with limited reserves, no grant eligibility, or an unexpected urgent energy cost increase — a PPA can bring solar to the building without any capital expenditure.

How a church PPA typically works

1. Survey and agreement: the PPA provider surveys your building, models the expected generation, and makes an offer stating the PPA price (e.g., 14p/kWh) and term (e.g., 20 years).
2. Installation: the provider installs the system at their cost. For listed churches, they also manage the faculty or planning consent.
3. Operation: the church receives electricity from the system at the agreed PPA rate. Any excess generation is exported to the grid — the export income (SEG) typically goes to the PPA provider, not the church.
4. End of contract: options typically include: renewing the PPA at a new rate, purchasing the system at residual value, or having the system removed.

PPA pricing: what to expect in 2026

The PPA market for churches and charities in 2026:

Element	Typical range
PPA electricity price	10–16p/kWh (vs retail 21–23p/kWh at 2026 rates)
Contract term	15–25 years
Price escalation	Fixed, or linked to CPI/RPI (usually 2–4% annual escalation)
System size	Most PPA providers require minimum 10kW (some 20kW+) for commercial viability
Export income	Usually retained by PPA provider
Maintenance	Included in PPA arrangement

The saving per kWh is the difference between your current retail tariff (say 22p) and the PPA rate (say 13p) — roughly 9p per kWh. On a 20kW system generating 18,000 kWh/year with 60% self-consumption, that is:

• On-site consumption: 10,800 kWh × 9p saving = £972/year saving
• No upfront cost

Compare this to ownership: the same system costs £22,000, grants might cover £12,000, net cost £10,000 — but the saving is the full retail rate (22p × 10,800 kWh = £2,376/year on-site, plus SEG export income). Over 20 years, ownership is significantly more valuable — but requires the upfront capital or grant access.

When a PPA makes sense for a church

PPA is worth considering when:

• The parish has no reserves or access to grants (some denominations and rural parishes have very limited grant options)
• The building is not listed (avoiding the heritage design complexity that PPA providers often won’t take on)
• The parish needs an immediate energy cost reduction and cannot wait 6–18 months for a grant round cycle
• The PCC is risk-averse and prefers a predictable electricity price to capital investment

PPA is usually not the right choice when:

• The parish can access Buildings for Mission or equivalent grants — ownership with grants is substantially more financially rewarding over the contract term
• The building is Grade II listed or above — most PPA providers decline listed building work due to faculty complexity and reversibility requirements
• The parish has a realistic 5–15 year exit horizon (amalgamation, redundancy, conversion) — a 20-year PPA obligation on a building the parish may not hold is a serious governance risk
• The PCC wants to receive SEG export income — PPA contracts typically route export to the investor

Denomination-specific PPA considerations

Church of England

A PPA contract on a CofE consecrated building requires faculty. The PPA creates a proprietary interest in the building (the provider’s equipment is installed and may constitute a charge). The Chancellors of some dioceses have taken a cautious view of PPAs — requiring the PCC to take legal advice on whether the PPA creates a legal interest in the church fabric, and whether Charity Commission consent is required for a long-term commercial contract on charity assets.

This is not an insurmountable barrier, but it is a real one. Any PPA for a CofE consecrated building should be reviewed by the diocese’s solicitor before the PCC signs. The faculty application for a PPA-installed system is otherwise the same as for an owned system.

Key questions to ask a CofE PPA provider: Is the ownership structure compatible with the Care of Churches and Ecclesiastical Jurisdiction Measure? Has the provider delivered a PPA on a CofE consecrated building before? Can they provide a reference from a diocese?

Catholic

Catholic church property is typically owned by the diocesan trust. A PPA is a commercial contract with the trust, not the parish. Finance committee approval at diocesan level is required — this typically adds 3–6 months to the process. The diocesan solicitor will review the contract. Catholic diocesan trusts vary significantly in their appetite for PPA arrangements: some have active portfolios of PPA-financed solar; others prefer outright purchase.

Methodist

Methodist church property is held by circuit trustees. A PPA contract requires Circuit Meeting approval. There is no equivalent of the CofE faculty for Methodist buildings (unless listed, in which case LBC applies). The Methodist Church’s legal department has a template PPA review process. Methodist PPAs are more straightforward procedurally than CofE PPAs.

Free churches (Baptist, URC, independent)

Property is held by local trustees, who can approve a PPA by trustee resolution. This is the simplest governance route. For listed free church buildings, LBC applies as for civil planning. Free churches with no heritage constraints and reasonable building size (10kW+ roof capacity) are the most commercially attractive category for PPA providers.

PPA vs ownership: 25-year financial comparison

The following comparison uses a typical rural CofE Grade II listed parish church, 15kW system, and assumes access to Buildings for Mission funding:

	PPA (no upfront cost)	Ownership with BfM grant
Upfront cost	£0	£5,000 (net after £18k grant on £23k system)
Annual electricity saving (on-site at 60% self-consumption)	£1,188/yr (9p/kWh saving)	£1,980/yr (22p retail vs zero)
SEG export income	£0 (retained by provider)	£550/yr
Total 25-year benefit	£29,700	£63,250
Net 25-year benefit after upfront cost	£29,700	£58,250

Ownership with grant is nearly twice as financially rewarding over 25 years, even allowing for the £5,000 net capex. The PPA’s advantage is the zero upfront cost — but if grants are available, ownership is almost always the right choice.

When grants are NOT available (e.g., a non-CofE building with no applicable national grant programme, or a parish that was recently unsuccessful with BfM), the comparison changes:

	PPA (no upfront cost)	Ownership, self-funded
Upfront cost	£0	£23,000
Annual benefit	£1,188/yr	£2,530/yr
Break-even vs PPA	Immediate	9.1 years
Net 25-year benefit	£29,700	£40,250

Here, PPA begins to make more sense — particularly if the parish does not have £23,000 in reserves.

Community Energy as an alternative to PPA

For parishes interested in the community benefit dimension of PPAs — shared ownership, community buy-in, risk sharing — Community Energy is worth exploring. Community Energy models (such as those facilitated by Energy4All or Sharenergy) allow a local community group to collectively own a solar installation on a church building, with the parish receiving a below-market electricity rate and the community group receiving investor returns. This is genuinely different from a commercial PPA and can generate significant community engagement.

The Community Energy England network maintains a directory of community energy groups that have worked with churches. Our community energy page has more detail.

Red flags when evaluating church PPA offers

• No reference from a comparable church or charity: a reputable PPA provider for the church sector will have delivered on comparable buildings
• Escalation clause tied to CPI with no cap: PPA prices that escalate faster than energy price inflation erode the saving over time
• No asset removal clause: if the building becomes redundant or is sold, who removes the equipment and at what cost?
• Pressure to sign before faculty or LBC is granted: a PPA contract on a listed building before consent is secured creates legal exposure for the PCC
• No transparency on SEG income: the provider should confirm what export income they receive and how it is calculated
• Long exclusivity period: some PPA contracts include exclusivity clauses preventing the church from applying to other energy schemes while the PPA runs

Our view

A church PPA is a valid instrument for specific circumstances — primarily for parishes with no grant access, no reserves, and a non-listed building needing rapid energy cost reduction. It is not the right instrument for the majority of parishes we work with, where ownership with grants is substantially more rewarding.

We do not arrange PPAs ourselves — we deliver outright purchase projects. We are always willing to give an honest opinion on whether a PPA offer you have received is appropriate for your situation. If you have received a PPA proposal and would like a second opinion, contact us.

If you would like to explore whether ownership with grants is achievable for your building, request a free desk feasibility — we will confirm within 7 working days whether grants are available and what the net cost to the parish would be.

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See also: Grants and funding guide · Buildings for Mission application guide · Community energy for churches · Cost guide