Community energy and PPAs for schools

Not every school wants to spend capital on solar, and not every trust wants a new asset, a maintenance liability and a grid connection to manage. For those schools there is a well-established alternative to buying: the power purchase agreement (PPA), often delivered through a community energy organisation. Under this model the school does not own the panels and does not pay for them. A third party funds, installs, owns and maintains the system on the roof, and the school simply buys the electricity it generates — at a fixed price per kWh set below the grid rate. The bill falls, no capital is spent, and the maintenance risk sits with the funder.

How the PPA model actually works

The mechanics are straightforward. A funder — an investor, a specialist solar developer or a community benefit society — pays the full capital cost of the array. They own it for the term of the agreement, typically 15 to 25 years, and they are responsible for keeping it running. The school signs an agreement to buy the electricity the panels generate at an agreed rate that is cheaper than what it currently pays the grid. Because the funder earns its return from selling that electricity, the incentives line up: they want the system generating well, and the school wants a lower bill. At the end of the term, ownership usually transfers to the school — so it eventually gets the asset for nothing. You can read the specifics of how this is structured for schools and academy trusts at solarpowerpurchaseagreements.co.uk.

Community energy: bringing the town onto the roof

A community energy scheme is a particular flavour of PPA. Instead of a single investor, a locally-owned community benefit society raises the capital through a community share offer — local people buy shares to fund the project. The society owns the array, the school buys the electricity below grid price, and any surplus typically flows into a community benefit fund for local causes. For a school this is more than a funding route: it is a community-engagement and governor story, a way to involve parents, the parish and the local area in the school’s energy project, and it dovetails naturally with the curriculum angle that already makes school solar attractive.

PPA versus a Salix-funded purchase

It helps to see the two main no-money-down routes side by side. With a Salix Decarbonisation Loan the school buys and owns the system using interest-free finance repaid from the savings — it is capital on the books, the school owns the asset from day one, and once the loan is repaid it keeps every penny of the saving. With a PPA the school commits no capital, owns nothing during the term, and pays only for the electricity. Salix maximises the long-run saving and gives you ownership; a PPA maximises simplicity, requires no capital and no borrowing, and moves the maintenance and grid-connection risk to the funder. Neither is universally better — see our honest breakdown of funded, zero-net-cost routes alongside this one.

When a PPA suits a school or trust

A PPA tends to suit a school or multi-academy trust that wants the bill saving and the net zero progress but needs to protect its capital and its borrowing headroom for teaching priorities. Because the school neither owns the asset nor borrows to fund it, a well-structured PPA can be treated as off-balance-sheet — though this depends on the exact terms and the accounting treatment, so it must be confirmed with your finance team or auditor rather than assumed. For a trust weighing capital allocation across many schools, that off-balance-sheet potential, plus the transfer of ownership and maintenance risk to the funder, is often the deciding factor. Where a school can access Salix and wants to own the asset and keep the full long-term saving, buying is usually the stronger call. We model both routes on your real numbers so governors decide on evidence — start with a free assessment.