# Fixed vs index-linked PPA rates explained

A solar PPA rate can be fixed or index-linked. A fixed rate stays the same throughout the term, giving maximum certainty. An index-linked rate rises with an agreed measure (often inflation), usually starting lower. Either way, a good PPA keeps you below grid prices — the key is understanding how the rate changes.

## Fixed rates

A fixed PPA rate does not change over the term, so you know exactly what you will pay per unit for years ahead. That certainty is valuable for budgeting, especially against volatile grid prices.

## Index-linked rates

An index-linked rate rises over time in line with an agreed index, commonly a measure of inflation. It often starts lower than a fixed rate, but increases through the term. The important thing is that a well-structured PPA remains below grid prices throughout.

## What to check before signing

Whichever structure is offered, confirm exactly how the rate is set and how it changes, and compare it against your expected grid costs. A transparent provider will spell this out clearly — as we do in every proposal.

## Frequently asked questions

**Will my PPA rate go up each year?**

It depends on the structure. A fixed rate stays the same; an index-linked rate rises with an agreed index. Either way, a good PPA is designed to stay below grid prices. We set out exactly how your rate works before you commit.

**Which is better, fixed or index-linked?**

Fixed gives certainty; index-linked often starts lower but rises. The best choice depends on your outlook and appetite for certainty. We explain both against your expected grid costs.

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Source: [Fixed vs index-linked PPA rates explained](https://ppafunding.com/guides/fixed-vs-index-linked-ppa-rates) · Author: PPA Funding team · Updated: 2026-07-30

PPA Funding is an independent introducer operated by DVC Group Ltd (Companies House 10462808), Shrewsbury — not the installer or the funder. The service is free to use; a commission may be earned from partner funders at no extra cost. Content is educational and is not financial or tax advice.