Official update on DfE pause on school solar rooftop leases with PPAs

DfE is approving projects so continue to apply!

The Department of Education is approving solar panel installations for PPA projects on school roofs and encourages organisations to continue to apply as normal.  You can find out how to apply on the government’s guidance website.

Earlier this year, the DfE paused these types of projects as it considered the implications of them being classed as ‘borrowing’ within Treasury rules. Following CEE lobbying and swift cross-departmental working the pause was lifted.

While this underlying question has not yet been resolved, CEE has regularly engaged with DESNZ and DfE on the issue, to help ensure that projects are able to go ahead in the short-term. We recently met with the National Infrastructure and Service Transformation Authority (NISTA) who are working on measures that may provide a long term solution and are considering how to leverage private investment in decarbonising the public sector estate. We have met with James Murray MP, Chief Secretary to the Treasury and have asked him formally to expedite Treasury’s dealings in this matter. His office is taking this forward. We have also invited him to visit community energy schools projects in his own constituency, when we will seek to turn him into a community energy champion within the Treasury. He is a Coop Party MP so will be predisposed to support our sector.

We appreciate that the pause on solar PPA projects with schools has been the cause of uncertainty for many community energy organisations and are working hard to make sure it is fully resolved. In the meantime, keep applying to do these projects.

At our request the Department for Education provided the official update below. In short they support solar and other energy measures on schools and urge members to continue submitting applications as normal, whilst a long term solution is found.

Current position regarding solar PPAs on school sites – December 2025

The government announced in the budget a statement of intent to explore private finance including PPAs.  In response the department will continue to work to bring clarity for schools to enter into agreements to borrow – in particular, agreements concerning the installation of solar panels on school sites and the associated consent to any necessary land transactions.

Borrowing by schools impacts on recorded levels of public sector net debt. This is why schools are required to seek the consent of the Secretary of State before entering into any borrowing.

The only exception to this is for leases relating to certain types of commonly used items as listed at https://www.gov.uk/government/publications/leasing-for-maintained-schools  and https://www.gov.uk/government/publications/leasing-for-academy-trusts. These lists do not include solar panel installations.

Separately, any agreement which involves granting a third-party rights over the land – such as a rooftop lease – may also require the involvement of the Secretary of State to agree the land transaction, as well as agreeing to allow the school to borrow.

The current position remains that schools should continue to apply the normal way following the guidance on GOV.UK. 

The department will set out the position on borrowing for other classes of asset in due course, but until that time are unable to approve any type of borrowing which is not either permitted under the categories of commonly used items highlighted above, or a solar PPA contract.