Solar PPAs and Energy-as-a-Service: Solar for Businesses Without Upfront Capital

A solar power purchase agreement (PPA) and energy-as-a-service both let a business use on-site solar without paying for the system upfront. Under a PPA, a provider owns the system on your roof and you pay an agreed rate for the electricity it produces. Energy-as-a-service goes further, bundling solar with batteries, EV charging or maintenance for a regular fee. Both can make sense, but you trade some long-term savings for lower capital outlay, and you sign a contract that may run for many years. This article explains how the models work and what to check. It isn't financial advice, so involve your accountant or financial adviser before deciding.

How a solar PPA works

1. Assessment and proposal. The provider reviews your roof, bills and interval data, then proposes a system size and a price per kWh.
2. Installation at the provider's cost. The provider funds, owns and insures the system, and accredited installers carry out the work.
3. You pay for the solar energy you use. Each month you pay the agreed rate for the solar electricity your site consumes, and the agreement sets out how any exports are treated.
4. The provider maintains the system. Monitoring, cleaning and repairs are usually their responsibility.
5. End of term. The agreement typically offers a buyout, an extension or removal of the system.

You still buy electricity from your retailer for everything solar doesn't cover, such as night-time and cloudy-day use. The saving comes from the gap between the PPA rate and the grid price you would otherwise pay during the day. That comparison only holds if grid prices and the PPA escalation move as expected, so ask for the proposal to show the result under more than one grid price scenario, including one where grid prices stay flat.

How energy-as-a-service differs

Energy-as-a-service is a broader subscription. Instead of paying per kWh for solar alone, the business pays a regular service fee for a package that might include solar, a commercial battery, EV chargers, monitoring and maintenance. It suits organisations that want one provider accountable for several technologies and would rather budget a predictable operating cost than manage separate assets. It can also suit a business that expects to add technology over time, such as more EV chargers as a vehicle fleet changes over. Because the fee is usually fixed rather than tied to generation, it matters even more that the proposal sets out clearly what performance and service levels you should receive.

Comparing the four main options

Tax and accounting treatment differs for each model, so ask your accountant how each would apply to your business. For businesses with available cash or borrowing capacity, ownership generally keeps the most value over the life of the system. PPAs and service models exist for businesses where capital is limited, better used elsewhere or slow to approve.

Contract terms to check before signing

• Rate and escalation. Is the rate or fee fixed, or does it rise each year, and by how much?
• Term and early termination. How long is the agreement, and what does ending it early cost?
• Moving or selling. What happens if you relocate, sell the building or your lease ends before the agreement does?
• Landlord consent. If you lease the premises, does the owner approve, and does your lease run at least as long as the agreement?
• Minimum payments. Are you charged for a minimum amount of energy even if your usage falls?
• Roof repairs. Who pays to remove and reinstall the panels if the roof needs work?
• Incentives. Who receives the benefit of STCs or any battery incentive, and is it reflected in the price?
• Performance and response times. What happens if the system underperforms or breaks down?
• Insurance and liability. Who insures the equipment, and who is responsible if it damages the building?
• End-of-term buyout. Is the buyout price set now or left open?
• Data access. Will you see the monitoring data used to calculate your invoices?
• Assignment. Can the provider transfer the agreement to another party, and do your rights stay the same if it does?

Have your solicitor review the agreement, and expect the provider's proposal to answer every point above in writing.

Which businesses these models suit

As a general guide:

• Solar PPA: businesses with substantial daytime loads, long-term control of the site through ownership or a long lease, and a preference for operating costs over capital spending.
• Energy-as-a-service: organisations planning several upgrades at once, such as solar, a battery and workplace or fleet EV charging, that want a single accountable provider.
• Equipment finance: businesses that want ownership and most of the savings but prefer to spread the cost.
• Buying outright: businesses with capital available that want the highest long-term return and full control.

Small sites with modest usage can find PPA providers less interested, because the system is too small for the arrangement to work for both parties. In those cases, finance or outright purchase is usually more practical. Not-for-profits and organisations with strict capital approval processes sometimes consider these models too, but they should first check whether their governing rules allow long-term agreements of this kind. Our commercial solar page explains how we size systems around demand.

Next steps

If you are weighing up the options, our Solar & Battery Finance for Business assessment ($149, with the fee credited) compares cash, equipment finance, lease, PPA and eligible government-backed loans for your site, without providing financial advice. A Solar PPA Proposal or an Energy-as-a-Service Proposal each starts from $990, with the fee credited if the agreement proceeds. All three are listed in our energy market, and prices are indicative. To start with your own numbers, try the commercial ROI calculator, then request a quote so our team can assess your site in person.

Frequently asked questions

Can a PPA or service agreement include a battery?

Some providers include storage, although batteries are harder to price per kWh because their value comes from shifting energy and reducing demand peaks. From 1 September 2026, NSW offers incentives for eligible business batteries from 20 kWh upward, which may change the economics. Check who receives that incentive under the agreement, and confirm current values on the official NSW business and industry page before signing.

Does a PPA affect our electricity retail contract?

You keep a retail contract for the electricity solar doesn't supply, but your grid consumption will fall and your load profile will change. Check whether your current retail contract has minimum consumption clauses, conditions about on-site generation or pricing that depends on your load shape. The metering at your site may also need to change, which is organised as part of the connection process.

How long does it take to set up a PPA compared with buying?

Usually longer. Beyond the normal design, network application and installation steps, a PPA involves the provider's credit assessment of your business, legal review of a long-term agreement on both sides and often landlord consent. Outright purchases can move faster because the approval sits within your own business. Allow extra time if you need the system running before a particular date.