Tier-1 UK 3PL operator · 2MWp solar across 4 distribution centres
2.0 MWp combined across 4 distribution centres commercial solar PV installation with combined grant + tax relief stack delivering N/A (PPA — immediate positive cashflow) post-tax payback on £1,400,000 gross capex.
Anonymised composite case study
Names, dates and exact financial figures have been changed to preserve client confidentiality. Project structure, funding combinations, technical configuration, and order-of-magnitude figures are real and based on completed work. Full editorial disclosure on the about page.
Project snapshot
| Sector | Third-party logistics (3PL) · multi-site fulfilment |
| Location | East Midlands + South East + North West |
| System size | 2.0 MWp combined across 4 distribution centres |
| Battery storage | None on solar; standby diesel maintained |
| Gross project capex | £1,400,000 |
| Grant value | £0 (PPA structure — 0% capex from operator) |
| Year-1 tax relief | N/A (PPA — operator buys electricity, not asset) |
| Net effective cost | £0 capex; £74,000 net annual saving vs grid (year 1) |
| Annual savings/revenue | £128,000 grid avoided - £54,000 PPA payments = £74,000 |
| Post-tax payback | N/A (PPA — immediate positive cashflow) |
| CO2 saving | 168 tCO2e/year |
| Year commissioned | 2025 |
Context
The 3PL operator runs UK fulfilment services for major retail and ecommerce brands — Tesco direct, Amazon overflow, John Lewis, Boots, and several premium beauty and apparel brands. Annual revenue £180m, 920 staff across 4 main distribution centres plus 2 smaller fulfilment hubs.
In Q3 2024, the operator's three largest customers (collectively 70% of revenue) tightened supplier sustainability requirements simultaneously — each requiring Scope 1+2 disclosure plus a 30% reduction pathway by 2030. The operator needed credible Scope 2 reduction across its 4 main sites without consuming capex needed for ongoing automation and labour productivity investment.
The challenge
Three constraints shaped the approach:
1. **Capex preservation.** The 3PL was deep into a £40m automation programme (AS/RS systems, conveyors, robotic picking). Solar capex would compete directly with automation capex — not acceptable to the board.
2. **Multi-site complexity.** 4 main DCs in different DNO regions (UKPN, Northern Powergrid, WPD, ENW). Different DNO connection processes, different export limits, different timelines.
3. **Tenant arrangement.** All 4 DCs were leased from REIT landlords. Solar required landlord consent and lease variation.
4. **Time pressure.** Customer audits started Q3 2025 — 12 months to install and demonstrate operating reductions.
Funding approach
The team structured a behind-the-meter PPA across all 4 sites with a specialist solar finance investor:
1. **Investor builds and owns solar.** Investor's specialist developer constructs 2MWp combined across the 4 sites. £1.4m capex deployed by investor.
2. **3PL takes the electricity.** Operator agrees to take 100% of generation at fixed rate of 8p/kWh for 25 years (escalated 2% annually, capped at 3%).
3. **Landlord lease variation.** REITs agreed to lease variation in exchange for £0 cost — sustainability disclosure helps their own ESG reporting.
4. **Customer disclosure ready.** PPA structure produces verifiable Scope 2 reduction data exportable to customers' supplier scorecards.
Funding structure:
- **Investor capex:** £1.4 million (fully funded by specialist solar fund) - **Operator upfront cost:** £0 - **Annual PPA cost:** £54,000 (at 8p/kWh × 670,000 kWh self-consumption combined) - **Avoided grid import:** £128,000 (at 19p/kWh blended commercial rate × 670,000 kWh) - **Net annual saving:** £74,000 from year 1
Outcome & performance
All 4 sites commissioned by Q4 2025. Year-one combined performance:
- **Combined solar generation:** 1,900,000 kWh across 4 sites - **Combined self-consumption:** 35% (670,000 kWh) - **Combined export (taken by investor):** 1,230,000 kWh - **Annual avoided import cost (operator):** £128,000 - **Annual PPA payment (operator → investor):** £54,000 - **Operator net annual saving:** £74,000 from year 1 - **Operator CO2 reduction reporting:** 168 tCO2e/year - **All 3 major customer audits passed Q3 2025-Q1 2026.** Contracts retained.
The operator preserved all capex for the automation programme while delivering Scope 2 reduction. The investor earned utility-scale returns across a portfolio of long-tenure logistics tenants. Win-win structure now being replicated across the 3PL's smaller fulfilment hubs.
Lessons learned
- PPA structures are highly effective for capex-constrained operators. £0 upfront, immediate positive cashflow, demonstrable Scope 2 reduction.
- Multi-site programmes achieve materially better unit pricing than single-site projects — typically 15-25% cheaper £/Wp at portfolio scale.
- REIT landlords are increasingly motivated to support solar — improves their own ESG reporting and Reduces lease default risk.
- Customer audit timelines (typically 12 months from supplier code update to first audit) drive procurement urgency more than government policy.
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