DfE Solar Power Purchase Agreements (PPA) Pilot

The Department for Education (DfE) is inviting organisations to participate in a Preliminary Market Engagement (PME) exercise to help shape a standardised private investment model for rooftop solar installations across schools and colleges in England. As part of the Department's wider ambition to improve, renew and decarbonise the education estate, DfE is piloting a Power Purchase Agreement (PPA) model that will enable schools and colleges to benefit from solar energy infrastructure without upfront capital investment. This engagement seeks feedback from solar developers, investors, lenders, community energy organisations and other relevant stakeholders on the Power Purchase Agreement model, which includes a PPA and associated lease arrangements. We are looking to understand whether the proposed approach is commercially viable, financeable, scalable and capable of delivering value for money across a diverse education estate. The feedback gathered through this exercise will help refine the model before its wider implementation and support DfE's ambition to make solar deployment more accessible for schools and colleges across England. ________________________________________ Background Through the Great British Energy Solar Partnership and related programmes, solar panels have already been installed across a number of educational settings, demonstrating significant benefits including: • Reduced energy costs for schools and colleges. • Lower carbon emissions and progress towards sustainability objectives. • Improved resilience through on-site electricity generation. • Strong financial returns, with early evidence suggesting average payback periods of approximately 3 to 6 years. The Education Estates Strategy (https://www.gov.uk/government/publications/education-estates-strategy) identified solar installation through private investment as a key opportunity to accelerate decarbonisation across the education estate. This PME will help inform the design and delivery of a proposed Power Purchase Agreement (PPA) pilot, which is intended to test the viability of this approach. The PPA pilot forms part of this ambition and supports the UK's legally binding commitment to achieve Net Zero by 2050. The pilot will be delivered as part of Phase 1 of the Renewal and Retrofit Programme (https://www.gov.uk/government/publications/education-estates-strategy), initially delivering condition, resilience and decarbonisation works in three regions of England ________________________________________ The Proposal DfE is developing a standardised set of commercial arrangements comprising: • A Power Purchase Agreement governing the sale and purchase of electricity generated by on-site solar installations. • A Lease of Roof Space providing long-term rights for installation and operation of solar assets. The pilot is expected to involve up to 150 schools and colleges across: • Yorkshire and Humber • East Midlands • South East The PPA model aims to deliver: • No upfront capital cost to schools and colleges. • Payment only for electricity consumed. • No minimum electricity purchase commitment. • Long-term contractual arrangements. • Clear allocation of risks and responsibilities. • A consistent approach that can be scaled across the education sector. Ultimately, DfE's ambition is to pilot PPA approach and assess its potential to support the widespread adoption of solar technologies throughout the education estate. ________________________________________ Areas for Feedback We are particularly interested in receiving views on: • Commercial attractiveness and competitiveness of the proposed model. • Bankability and suitability for project financing. • Contract term length and pricing mechanisms. • Allocation of export and grid connection risks. • Estate-wide applicability across different school and college types. • Assignment provisions and lender step-in rights. • Termination arrangements. • Opportunities and challenges associated with larger solar arrays and export revenues. We welcome both strategic observations and detailed technical feedback. ________________________________________ Market Engagement Event DfE will host a market engagement webinar to present the proposed model and outline the draft documentation. The session will cover: • Programme background and policy objectives. • Overview of the proposed PPA model and the pilot. • Key commercial features. • Roles and responsibilities of participating parties. • Feedback areas and consultation questions. • Next steps and opportunities for further engagement. • Live Q&A session. Participants will have the opportunity to submit questions during the event and provide more detailed feedback afterwards through a structured questionnaire and, where appropriate, one-to-one engagement sessions. ________________________________________ How to Participate Interested organisations are invited to register their interest in the market engagement exercise and webinar. Participation is encouraged