If you are weighing up a power purchase agreement for a commercial site, the hard part is not finding providers. It is working out what you are actually comparing. Two offers can quote the same roof and the same system size and still sit years apart on term, ownership and what happens when something breaks.
This guide sets out what a commercial PPA is, the five questions that separate one provider from another, and how to put two offers side by side without guessing. It is written to be used in a procurement process, including one we are not part of.
Take the guide into the meeting
The full guide as a four page PDF, with the ten row comparison table ready to fill in beside two real offers.
We use your address to send the guide and to reply if you ask us something. We never sell it or pass it on. Everything in the PDF is on this page too.
What a commercial solar PPA actually is
Under a power purchase agreement, a provider funds, installs and owns the solar system on your site. You buy the electricity it generates at an agreed rate, usually below what you pay your retailer, for an agreed term. You do not buy the equipment, and you do not carry the capital cost. That much is widely understood, and it is how a PPA differs from the alternatives.
| Structure | Who owns the system | Who carries performance risk | What you pay |
|---|---|---|---|
| PPA | The provider, for the term | The provider | A rate per kWh generated |
| Lease | You, at the end | You | Fixed repayments |
| Capital purchase | You, from day one | You | Upfront capital |
| Build and operate | The provider, who also runs it | The provider | An agreed charge, with operation and maintenance included |
Three things about a PPA are less obvious than the table shows, and matter more.
- It is a supply agreement, not a finance product. You are buying energy, not repaying an asset, which changes how it is assessed and who carries what.
- The provider carries performance risk. Which is why a serious provider asks about your load profile rather than just the size of your roof.
- It is attached to the site. So it outlives a change of tenant, a change of manager, and in most cases a change of owner. It is not a lease: a lease finances a system you end up owning, with the performance risk sitting on your side of the table.
What actually separates one provider from another
Five questions. Ask all of them, of everyone, and get the answers in writing.
- How long is the term, and what happens at the end of it. Commercial terms commonly run from seven to twenty years. The number matters less than the end of term position. Ask whether the system is removed, handed over or re-contracted, and get the answer in writing rather than in a conversation.
- Who owns the asset, and who maintains it. Two questions, not one. Ownership decides who claims incentives. Maintenance decides who you call when generation drops in year six. A provider who owns the system but subcontracts maintenance to whoever is cheapest that year is a different proposition.
- Is there a performance guarantee, and what does it guarantee. Most offers include a generation estimate. Fewer include a guarantee, and those that do vary in what triggers it. Ask what happens if the system underperforms the estimate by ten per cent for a year, and who does the measuring.
- How does the rate escalate. A rate that looks good in year one can be the expensive option by year ten. Fixed escalation, CPI linked escalation and flat rates behave very differently over a long term. Ask for the rate in every year of the agreement as a table, not as a headline number.
- What happens if you sell the site, or your lease ends. This is the question that derails deals late, and the one most buyers ask last. The agreement should spell out assignment, whose consent is required, how long they have to give it, and who pays the costs of transfer. Ask for those clauses by name, early, while you still have time to act on the answer.
The four kinds of provider you will meet
Most of the market sorts into four groups, and each is strong at something different. None of them is the right answer in the abstract.
| Kind of provider | Strongest at | The question to press |
|---|---|---|
| Energy retailers | Convenience, and often the rate, because it sits alongside your supply contract | How flexible are they on system design, and on exit |
| EPC and installers | Building well, and sharp pricing | Who owns the obligation after practical completion |
| Fund backed developers | The cheapest capital and the longest terms, on large single sites | Is your project big enough to hold their attention |
| Build and operate specialists | Staying on the asset: monitoring, maintenance and optimisation for the term | What exactly is included, and what is charged separately |
Which structure suits which site
| Your situation | What matters most |
|---|---|
| Owner occupied | You control the roof and the decision, so the term and the end of term position carry the most weight. A longer term is usually fine if the handover is clear. |
| Leased premises | Your lease term is the constraint, not the system. Check whether your landlord's consent is needed before you go to market, because it changes which providers can serve you at all. |
| Multiple sites | Consistency beats optimisation. One design standard and one delivery program across sites is worth more than a slightly better rate at three of them. Ask how works are sequenced so each site keeps operating. |
| Heavy peak demand | Solar alone will not touch demand charges. Ask whether storage can be funded under the same agreement, and how peak demand reduction is measured. Our post on what a battery does to a commercial bill covers how that is measured. |
If the building changes hands, the agreement almost always transfers to the new owner with the provider's consent, and the contract of sale has to deal with it. Handled early it is a half page of disclosure. Left to the week before settlement it is the thing holding up the deal.
Zool Energy, stated plainly
We are a funded build and operate specialist, so you can weigh us against the description above rather than against our own marketing. Under Total Care we fund the system, design and build it, then operate and maintain it for the life of the agreement, which means one party stays accountable after handover. Zool has delivered more than 500 projects across Australia, from 30 kW up to systems of 2 MW and above, with a 98 per cent uptime track record.
We are not the right fit for every site, and we would rather say so early. A site with a short remaining lease, or one where the load does not give a system anything useful to do, is better off hearing that at the assessment than two years into an agreement.
Ten rows to put two offers side by side
Put both offers in a table with these rows and insist on a number or a clause reference in every cell. Anything a provider will not fill in is itself an answer.
| What to ask for | What a complete answer looks like |
|---|---|
| Term | Years, plus what happens to the system at the end of them |
| Rate | Year one, and every year after it, as a table |
| Escalation | Fixed, CPI linked or flat, stated as a mechanism not a number |
| Ownership | Who owns the asset, and who claims the incentives |
| Maintenance | Who does it, in house or subcontracted, and for how long |
| Guarantee | The trigger, the remedy, and who measures performance |
| Inclusions | What operation and maintenance covers, and what is charged separately |
| Monitoring | What you can see yourself, and what you are told about |
| Transfer | Assignment and consent on sale, and who pays the costs |
| Early exit | The mechanism, and how the figure is calculated |
Send us your bill
The quickest way to find out what any of this is worth on your site. One recent bill is all we need. No site visit, no forms to fill in, and no obligation.
We will tell you if solar or batteries are not the right fit.
Send us your bill →What buyers ask us before they decide
Is a PPA cheaper than buying outright
Not usually in total cost over the full term, and that is not what it is for. A PPA removes the capital cost and the performance risk, so the real comparison is between capital you keep and a rate you pay. The question to answer is what else that capital would earn in your business. Our post on the capex barrier works through that trade-off.
Does it sit on our balance sheet
Treatment depends on the structure of the agreement and on your accounting standards. It is a question for your accountant with the draft agreement in front of them, which is a good reason to ask for the agreement early.
Can we add a battery later
Sometimes, and it is far easier when the original agreement contemplates it. If storage is likely within the term, raise it before signing rather than after.
What if the provider goes out of business
Ask who holds the asset and what step in rights exist. Ask it of every provider, including us.
Figures describing Zool Energy's track record are published on zoolenergy.com.au and are current as at October 2026. Total Care is subject to credit assessment and contract terms. This guide is general information about how commercial power purchase agreements are structured. It is not financial, legal or accounting advice, and every agreement differs, so read yours and take advice on it before you act.