One has a large factory roof. The other operates sites in five countries. One runs around the clock. The other mostly uses power during daylight hours.
That is why there is no single "best" power purchase agreement. There is only the one that fits your sites, the way you use electricity and the market you operate in. This guide explains the main options in plain language. You may be exploring renewable energy for the first time, or you may already be comparing offers. Either way, it will help you see which model could work for you.
A power purchase agreement (PPA) is a long-term contract to buy renewable electricity from a specific project, at a price agreed in advance.
A corporate PPA is simply a PPA signed by a business rather than a utility. It is the umbrella term: onsite, offsite and virtual PPAs are all types of corporate PPA.
Most PPAs share three features:
What changes from one model to another is where the plant sits, how the electricity reaches you and what you actually receive.
How it works. Solar panels are installed on your roof, carport or land. The electricity they produce is used directly on site, and the grid covers the rest of your needs.
You pay only for the electricity the system generates, at a price fixed for the length of the contract. That price is typically set below the grid tariff you pay today.
All the RECs are yours. In some markets, you can also sell surplus electricity back to the grid. At the end of the contract, the system is either handed over to you or removed.
A good fit if you have a large roof or available land, steady daytime consumption, and want a visible, practical first step.
Keep in mind that production is limited by the space you have. On an energy-intensive site, an onsite system will rarely cover all your needs on its own.
How it works. A larger solar plant is built on land near your operations. Its electricity is fed into the grid and delivered to your site through the transmission network, a process known as "wheeling". You receive both the electricity and the RECs.
A wheeling charge is paid to the grid operator. Depending on the location and the contract, it is paid either by the developer or by you.
A good fit if your consumption is larger than what your own site can produce, or if you have no suitable roof or land at all.
Keep in mind that this model is only possible where local rules allow private electricity to be delivered through the grid. The contract also involves more parties than an onsite PPA.
How it works. The solar plant sells its electricity into the power market. You keep buying electricity from your usual retailer, as you do today. Alongside that supply contract, the virtual PPA (VPPA) creates a financial arrangement linked to the plant's output and transfers the associated RECs to you.
A good fit if you have no space on site, operate several sites, or are in a market where physical delivery is not possible but financial contracts are. Nothing needs to be installed at your premises.
Keep in mind that a VPPA is a financial contract, so your finance and legal teams need to understand how the price works over time. The location of the plant also matters. As Scope 2 reporting rules move towards matching clean electricity to the place where it is used, certificates generated in the same market as your operations are likely to be easier to defend.
Solar panels produce during the day, but many businesses keep running at night. A battery stores surplus solar electricity and releases it later.
Where the project and site allow it, storage helps you use more of your renewable electricity across the day and adds resilience to your supply. It is also a practical step towards matching more of your consumption with clean power, hour by hour.
| Onsite PPA | Offsite physical PPA | Virtual PPA | |
|---|---|---|---|
| Where is the plant? | On your site | On land nearby | Elsewhere in the market |
| Does electricity reach you directly? | Yes | Yes, via the grid | No, you keep your retailer |
| Do you receive RECs? | Yes | Yes | Yes |
| Do you need space? | Yes | No | No |
| Best suited to | Large roofs, daytime use | Large loads, limited space | Multi-site portfolios, no space |
| Main watch-out | Limited by space | Depends on grid rules | Financial price exposure |
Start with a conversation, not a contract. In a 30-minute PPA options assessment, a Peak Energy specialist reviews your sites, your electricity use and your market. You will come away knowing which models are realistic for you, and which are not.