A 20-year contract is a long time, and it’s reasonable to want to know what happens when it ends before you sign anything. The end of term isn’t really an ending at all, but rather a decision point, with several attractive options on the table. Here’s what they look like.
For a full explanation of how a solar PPA is structured and what the agreement involves, see How Solar PPAs Work for UK Businesses.
Why this isn’t a cliff edge
A solar system with Tier 1 equipment and a designed service life of 30 years still has a decade or more of useful generation left in it at the end of a typical 20-year PPA term. That’s the starting point for each option below – the system isn’t tired out, so the conversation isn’t about managing decline. It’s about deciding what to do with an asset that’s still performing well.
Option one: extend at a much-reduced rate
The most common route is extending the PPA for a further 5, 10, or 15 years, at a rate significantly below what was paid during the original term. By this point, the system has already paid back its capital cost through the electricity it’s supplied, so the ongoing tariff reflects that – a lower rate for electricity from a system that’s already proven itself.
For a business that’s grown used to the savings a PPA provides, this is often the simplest option. Nothing changes operationally. The system keeps running, UrbanVolt keeps maintaining it, and the price reduces.
Option two: upgrade the system
Solar and inverter technology has moved on considerably since most systems were first installed, and end of term is a natural point to take advantage of that. An upgrade can mean higher-efficiency panels, improved inverter technology, or additional capacity, all aimed at getting more generation out of the same roof space than the original system was designed to deliver.
This is most applicable for a business whose electricity consumption is constrained by its roof space, or where new equipment on the market could meaningfully increase yield. UrbanVolt manages the upgrade in the same way as the original installation – funded, owned, and maintained under a new agreement.
Option three: take full ownership
If preferred, the client can take full ownership of the system for a nominal fee (£1). At that point, responsibility for ownership, maintenance, and performance transfers across, and there is no charge to UrbanVolt from this point forward.
This suits businesses that want to draw a line under the arrangement and hold the asset outright, particularly once it’s already delivered two decades of proven performance and there’s a clear sense of what it takes to keep it running well.
Option four: have the system removed
Removal is available, though a system at the end of a PPA term still has significant useful generating life ahead of it, and taking it down means giving up electricity it would otherwise keep producing at low to no cost. For most sites, one of the other three options makes considerably more sense.
When this conversation happens
None of this needs deciding on day one of the contract, or even worrying about for the next two decades. UrbanVolt opens the end-of-term conversation well ahead of time, so there’s plenty of room to weigh up the options against where the business is at that point, rather than a decision landing last-minute with no time to think it through properly.
By the time that conversation happens, the business will have had 20 years of below-market electricity for zero CAPEX, and a flexible set of choices for what comes next.
If you want more information about end of term options, contact us to start your journey to energy independence.
About UrbanVolt
Founded in 2015, with the idea of making sustainability simple, UrbanVolt has become Ireland’s leading Solar as a Service provider and is now expanding rapidly across the UK. Backed by a team with decades of UK renewable energy experience, we help businesses cut carbon and reduce energy costs without the need for upfront investment.