Half of the record 6 GW of corporate renewable energy deals recorded in Australia in 2026 came from a single buyer, the Tomago aluminium smelter, and that deal is still waiting on wind and solar suppliers. It’s a reminder that the corporate power purchase agreement market is largely built around very large energy users.
Yet with experts warning of a “contracting cliff” as buyers rush to lock in renewable power before 2030, businesses of all sizes are asking how to secure cleaner, cheaper electricity. For many, the corporate PPA vs rooftop solar decision is now the starting point, especially since the federal rebate was extended to commercial systems up to 1 MW from 1 October 2026.
This guide explains how each option works, compares cost, contract length and risk side by side, and shows which suits different types of business, including when combining them makes the most sense.
Quick summary
- If you have suitable roof space and daytime energy use, onsite commercial solar in Australia now often pays back in under five years after the expanded rebate.
- They can cover much more of your demand, including overnight use, but involve long contracts and market risk.
- Rooftop solar cuts daytime costs, while a PPA or green retail plan covers the rest.
How corporate PPAs work
A corporate power purchase agreement is a long-term contract to buy electricity, or its financial value, from a wind or solar farm located away from your site. Contracts often run for around 10 years, sometimes longer, at a fixed or index-linked price.
The main types of corporate PPA
| Type | How it works | Typical buyer |
| Sleeved (physical) PPA | Your electricity retailer passes the wind or solar farm’s output and certificates through to you at the agreed price | Large and mid-sized businesses wanting a simple bill |
| Virtual (financial) PPA | You keep your normal retail contract, and settle the difference between the agreed price and the wholesale price with the generator | Large, sophisticated buyers comfortable with market risk |
| Retail or aggregated PPA | A retailer or buying group pools several businesses’ demand into one deal | Mid-sized businesses, councils and schools |
Most PPAs also include large-scale generation certificates (LGCs), which let you claim the renewable energy for emissions reporting.
Benefits and trade-offs
A PPA can cover a large share of your electricity, including overnight and winter use, and provides long-term price certainty. But contracts are complex, usually need legal and energy market advice, and can leave you paying above market prices if wholesale prices fall. The NSW Government’s PPA explainer notes there’s no one-size-fits-all deal, and terms can vary significantly.
For real-world examples, see our article on how corporations are using PPAs to go renewable.
Expert tip
If your business uses less than a few gigawatt-hours a year, ask your electricity retailer about retail or aggregated PPAs before approaching generators directly. They give smaller buyers access to renewable contracts without the complexity of negotiating a deal on their own.
Corporate PPA vs rooftop solar compared
Both options can cut costs and emissions, but they suit very different businesses. Here’s how they stack up on the factors that matter most.
| Factor | Rooftop solar (owned) | Onsite solar PPA | Offsite corporate PPA |
| Upfront cost | Moderate to high, reduced by the SRES rebate | None | None, but legal and advisory costs |
| Share of energy covered | Daytime use, limited by roof size | Daytime use, limited by roof size | Up to 100% of your load |
| Contract length | None after purchase | Usually 10 to 25 years | Often around 10 years or more |
| Complexity | Low | Low to moderate | High |
| Price risk | Low: savings track grid prices | Low: fixed per-kWh rate | Moderate to high, depending on structure |
| Emissions reporting | Reduces grid electricity use directly | Reduces grid electricity use directly | Through surrendered certificates (LGCs) |
| If you move site | System may need relocating or selling with the property | Contract terms decide | Contract continues regardless of site |
What the comparison shows
Rooftop solar is simpler, lower risk and now faster to pay back, but it only covers part of your energy use. Offsite PPAs can cover everything, but they demand scale, expertise and a tolerance for contract and market risk.
The gap has widened since 1 October 2026, when the federal Small-scale Renewable Energy Scheme was extended to commercial systems up to 1 MW. The government estimates this cuts installation costs by around 20%, and industry modelling suggests median payback for systems between 100 kW and 1 MW now falls below five years. Read more about the 1 MW SRES expansion and how to lock in the rebate.
For many businesses, the question isn’t which one to choose, but which to do first.
Expert reference
At the All Energy conference in October 2026, ERM’s head of energy markets, Gilles Walgenwitz, warned that businesses with 2030 renewable targets shouldn’t wait until 2029 to plan their procurement, or they risk paying a high price as demand for contracts surges.
Expert tip
Check whether your premises lease allows rooftop solar, and how long you’ll stay on site. A long remaining lease favours owning a system, while an on-site PPA can be structured to suit landlords and tenants.
Which option suits your type of business
The right choice depends on how much energy you use, when you use it, whether you own your site and how much complexity you can manage. These profiles are a useful starting point.
| Business profile | Best starting point | Why |
| Small business with daytime trading (office, retail, café) | Rooftop solar, owned or financed | Daytime use matches solar output, and payback is fast |
| Warehouse, factory or farm with a large roof | Rooftop solar up to 1 MW, plus a battery | Big roofs can now access the expanded rebate, and a battery covers later shifts |
| 24/7 operations (cold storage, hospitals, aged care) | Rooftop solar plus a retail or corporate PPA | Solar cuts daytime costs; a PPA covers nights and winter |
| Large multi-site company with 2030 targets | Corporate PPA, plus rooftop solar at suitable sites | A PPA delivers scale; onsite solar adds savings and resilience |
| Tenant in leased premises | Onsite PPA agreed with the landlord, or a retail PPA or green energy plan | Avoids owning equipment on a site you don’t control |
Questions to ask before deciding
- How much of your energy do you use during daylight hours? The higher the share, the more rooftop solar can cover.
- Do you own your premises, or how long is your lease? This affects whether you can install and benefit from on-site solar.
- Do you have a renewable or emissions target? If you need close to 100% renewable power, a PPA will likely be part of the mix.
- Can you take on a long-term contract? PPAs work best for businesses with stable, predictable energy use.
Expert tip
Don’t overlook a demand-charge review. Many commercial bills include charges based on your highest monthly peak. Rooftop solar paired with a battery can trim those peaks, which can be worth as much as the energy savings for some businesses.
Combining rooftop solar, batteries and a PPA
For many businesses, the strongest strategy layers the options rather than choosing one. Start with the cheapest power you can generate on site, then contract for what’s left.
A layered approach
- Rooftop solar first. Cover as much daytime load as your roof allows, taking advantage of the expanded rebate.
- Add a battery. Shift surplus solar into the evening and reduce peak demand charges.
- Contract the remainder. Cover overnight and winter use with a retail PPA, corporate PPA or green energy plan, sized to the load your on-site system can’t meet.
Because rooftop solar reduces the volume you need to contract, the PPA can be smaller and simpler, which may make it easier to secure in a tightening market.
Batteries are becoming standard
The large-scale PPA market is moving the same way. The Business Renewables Centre Australia found that, for the first time, most corporate renewable deals in 2026 included battery storage, a shift its chief executive, Chris Briggs, described as the start of the era of firmed renewables.
On-site, state programs can help too. NSW has expanded its Peak Demand Reduction Scheme to include commercial-scale batteries for small and medium businesses and larger commercial and industrial sites.
Expert tip
Ask installers to model your system with and without a battery, using your interval data. For businesses with evening operations or high demand charges, the battery often improves the overall payback, even though it adds to the upfront cost.
Running a fleet too? Commercial solar can also power workplace charging. See our guide to EV chargers for commercial and business properties.
How to get started
Whichever option you lean towards, the first steps are the same. Good data and clear goals make every quote and contract easier to compare.
- Gather your energy data. Collect 12 months of bills and interval data showing when and how much electricity you use.
- Set your goals. Decide whether your priority is cutting costs, meeting an emissions target, price certainty or all three, and by when.
- Get a rooftop feasibility assessment. Ask accredited commercial installers to assess your roof, structure, shading and network connection requirements, and to model savings with and without a battery.
- Talk to your retailer about PPA options. Ask about retail PPAs, buying groups or green energy plans to cover the load your rooftop can’t.
- Compare total costs over 10 years or more. Weigh upfront costs, contract terms, expected savings and risks side by side before committing.
Watch for the rush
The expanded rebate has sparked a surge of interest in commercial solar, and industry figures have warned businesses to watch out for operators trying to cash in. Check installer accreditation, ask for references from similar-sized projects, and get multiple quotes.
Expert tip
Ask every installer for a written breakdown of the rebate value they’ve applied, the expected annual generation, the assumed share of solar used on site and the payback calculation. These four numbers make quotes genuinely comparable.
Find out what commercial solar could save your business
Compare up to 3 free quotes from accredited commercial solar and battery installers, including systems up to 1 MW eligible for the expanded rebate.
Frequently asked questions
Can a small business sign a corporate PPA?
Yes, usually through a retailer. Small and mid-sized businesses rarely negotiate directly with wind or solar farms, but many retailers offer retail PPAs or buying groups that pool demand from several businesses. These give smaller buyers access to renewable contracts with simpler terms and lower legal costs.
How much does the 1 MW rebate save on commercial solar?
The federal government estimates the expanded Small-scale Renewable Energy Scheme cuts installation costs for eligible commercial systems by around 20%. From 1 October 2026, systems up to 1 MW can earn upfront certificates, and industry modelling suggests median payback for 100 kW to 1 MW systems is now under five years.
What is the difference between an onsite PPA and an offsite PPA?
An on-site PPA covers a solar system installed on your own roof, owned and maintained by a third party, and you pay a fixed rate for the power it produces. An offsite PPA is a contract with a wind or solar farm elsewhere, delivered through your retailer or settled financially.
Can I count rooftop solar towards my company’s emissions targets?
Yes. The electricity your rooftop solar produces, and you use on site, reduces the grid electricity you buy, which lowers your Scope 2 emissions directly. For offsite PPAs, emissions claims usually rely on large-scale generation certificates (LGCs) being surrendered on your behalf. Check your reporting framework’s specific rules.
What happens to a PPA if my business moves or closes?
It depends on the contract. Offsite PPAs usually continue regardless of where you operate, and exiting early can trigger termination costs. Onsite PPAs may allow the system to be transferred, bought out or removed. Always review exit, assignment and change-of-site clauses with a legal adviser before signing.
Key takeaways
- Corporate PPAs suit large, complex energy users, while rooftop solar suits most businesses with roof space and daytime demand.
- The expanded SRES rebate now covers commercial solar systems up to 1 MW, cutting costs by around 20%.
- Rooftop solar is simpler and lower risk, but only covers daytime use; PPAs can cover your full load.
- A layered approach, combining rooftop solar, a battery and a smaller PPA, often delivers the best result.
- With a “contracting cliff” looming before 2030, businesses with renewable targets should start planning now.
Sources
- NSW Government (EnergyCo): Power purchase agreements explainer
- ARENA: Business Renewables Centre – Australia final report
- Sustainability Matters: Government solar scheme expansion reduces installation costs
- pv magazine: Expansion of rooftop solar rebate scheme to unlock Australia’s missing middle
- Climate Control News: Solar gold rush warning
- RenewEconomy: Corporate buyers for wind and solar output are still rare, but the market is hurtling towards a contracting cliff
