Nearly 200 schools will install solar panels under a new government-backed Power Purchase Agreement (PPA) model, the Department for Education confirmed this week. The scheme offers schools a fixed electricity price for 25 years, cutting their energy bills by an estimated 30% on average. For UK homeowners weighing solar panels, the deal is a rare glimpse of what a genuinely fair PPA looks like.
As Solar Power Portal reports, the model is ‘genuinely significant’, but critics warn it could ‘bake in imbalance’ if smaller schools or households are left to negotiate weaker terms.
What the DfE model offers, and what it gets right
Under the scheme, a private developer installs and owns the panels on school rooftops. The school buys the electricity generated at a fixed rate, indexed to inflation, for 25 years. Any excess power is exported to the grid, with the school keeping the revenue. Typical savings per school are estimated at £6,000–£10,000 annually, according to the DfE’s own modelling.
For context, a typical 3-bed semi in the UK uses around 2,700 kWh of electricity per year. A 4 kW solar array can generate roughly 3,500 kWh annually, covering most daytime demand. Under a household PPA, the homeowner pays the installer a fixed rate per kWh, often 5p–8p, rather than buying the panels outright. The DfE model fixes that rate for the full 25 years, with no sudden price hikes beyond agreed inflation adjustments.
That long-term certainty is exactly what household solar PPAs lack. Many consumer contracts reprice after 10 or 15 years, or include clauses that let the installer raise rates if grid prices spike. Ofgem has flagged this as a growing consumer protection issue in its 2024 retail market review.
Where the imbalance creeps in
The catch is scale. The DfE model works because the government aggregates demand across nearly 200 schools, giving it negotiating use. A single homeowner facing a solar installer has no such power. The Energy Saving Trust advises homeowners to read PPA contracts carefully, especially clauses on:
- Exit fees, some charge £1,000+ to terminate early if you sell the house.
- Ownership of the panels, you don’t own them, so you can’t claim the Smart Export Guarantee tariff yourself.
- Maintenance obligations, who fixes a broken inverter after year 10?
Solar Power Portal notes that the DfE model could ‘bake in imbalance’ if smaller schools, those with lower energy demand or less roof space, receive less favourable terms. The same applies to households: a 2-bed flat with a small array may get a worse PPA rate than a 5-bed detached house. Without standardised terms, the market fragments.
What this means for your EPC and your bill
A solar PPA can still improve your Energy Performance Certificate rating. A 4 kW array typically adds 10–15 points to an EPC score, moving a D-rated home to a C. That matters for mortgage eligibility, several lenders now offer lower rates to homes with EPC C or above. But if the PPA locks you into a fixed export price below the market rate, you may lose out compared to owning the panels and selling power via the Smart Export Guarantee at 15p–24p per kWh.
The grant picture is mixed. The Boiler Upgrade Scheme covers heat pumps but not solar panels. The ECO+ scheme offers insulation and some solar funding for low-income households, but most homeowners buying panels today rely on self-funding or a PPA. The DfE’s approach shows what a government-backed PPA standard could look like, but no equivalent exists for households yet.
Three questions to ask before signing a household solar PPA
If you’re considering a solar PPA, often marketed as ‘solar for free’, ask the installer these three things before you sign:
- Is the export price fixed for the full term? If not, walk away.
- What happens if I sell the house? Can the new buyer take over the contract without penalty?
- Who maintains the system? Is there a 25-year warranty on the inverter and panels?
The DfE model proves that fair, long-term solar PPAs are possible. Until the government extends similar protections to households, the onus is on you to read the small print, or buy the panels outright and keep the full benefit. Solar panels typically pay back in 8–12 years on a £5,000–£7,000 install. A PPA may cut your bill now but cost you more over the lifetime. Do the maths before you commit.
Frequently Asked Questions
Yes. Several installers offer PPAs, typically for 20–25 years. You pay a fixed rate per kWh generated, often 5p–8p, instead of buying the panels. Check exit fees, ownership clauses, and whether the export rate is fixed for the full term. The Energy Saving Trust recommends comparing PPAs against outright purchase.
Not directly. The DfE model is a bulk procurement for state-funded schools. No equivalent government-backed PPA exists for households. However, the model sets a benchmark for fair terms, fixed export rates, no early termination penalties, and indexed inflation caps, that homeowners should demand from private installers.
