A solar power purchase agreement (PPA) means a developer installs and owns the system on your roof or land, and you pay a per-kWh rate for the solar energy you use. No upfront cost, a long contract.
Typical rates
Published commercial guides in 2026 put solar PPA rates at roughly 10 to 16 cents per kWh, against commercial grid tariffs often around 20 cents or more per kWh (and 28 to 35 cents in Western Australia, per one 2026 guide). These are indicative; quotes depend on the site and the contract.
| Driver | Effect on rate |
|---|---|
| System size | Larger systems usually lower the per-kWh rate |
| Roof or site quality | Better yield, lower rate |
| Contract term | Longer terms allow lower rates |
| Escalator | Fixed rates start higher than indexed ones |
| Credit quality | Stronger customers get better pricing |
| Certificates | Who keeps them changes the developer’s revenue |
The certificate question
A developer who owns the system earns certificate value as well as your payments. Under the new rule, a system from 100 kW to 1 MW installed from 1 October 2026 can create STCs upfront (see mid-scale STCs), which developers will price into their offers. A PPA rate that ignores that value may be leaving savings on the table; ask who keeps the certificates and how they are reflected in the rate. See LGCs, PPAs and ownership.
PPA or purchase
Buying the system gives you the whole benefit: bill savings, certificates and ownership, but needs capital. A PPA transfers installation and performance risk to the developer, and the trade-off is a long contract and a lower share of the upside. Compare on a lifetime cost per kWh basis, including what happens at contract end, buy-out terms and roof works. See business solar rebates and the 2026 commercial solar rebate.
Questions to put to a PPA provider
Ask what happens if you sell the building, how roof repairs are handled, whether the rate escalates and by how much, what the buy-out price is in year five and year ten, and who is responsible for insurance and maintenance. Ask also how network tariff changes or export limits are treated. A provider that answers clearly in the contract draft is usually one that will perform.
What this means for you
Get three PPA quotes and one purchase quote for the same site, then compare lifetime cost per kWh. If you buy, plan to sell the certificates promptly: Energy Merchants publishes its rate daily on pricing, and the STC trading page explains the process. The commercial solar hub has more on LGCs and mid-scale solar, and the calculator gives an STC estimate for smaller systems.