Hi!
This is a known issue that comes from a combination of two factors: authentication configuration and how the PAYG billing policy is scoped. Let me break it down.
Root Cause
Your agent works fine in Teams because Microsoft Teams uses its own authentication context (Microsoft Entra ID) natively. However, when you publish to the SharePoint channel, users without a Microsoft 365 license hit an error because:
1. Authentication mismatch — If your agent is set to "Authenticate with Microsoft", it requires a valid Microsoft 365 / Entra ID session. Users without an M365 license may not pass this gate when accessing the agent through SharePoint.
2. PAYG billing policy not fully covering unlicensed users — Even with PAYG enabled on the environment, the billing policy must be correctly linked to an active Azure subscription in Power Platform Admin Center. If it isn't, unlicensed users have no entitlement to consume the agent and will receive an error.
Fix — Follow these 3 steps in order
Step 1 — Verify your PAYG billing policy is correctly linked
Go to Power Platform Admin Center → Billing policies and confirm:
- The environment where your agent lives is associated with an active Azure subscription.
- The billing policy is not restricted to specific user groups (it should cover all users in the environment).
If the environment is not linked, users without a license have no credits to consume and the agent will error out.
Step 2 — Fix the authentication setting in Copilot Studio
Go to Copilot Studio → Your agent → Settings → Security → Authentication and change the configuration based on your scenario:
- Users are internal (have an Entra ID / corporate account, just no M365 license):
→ Switch from "Authenticate with Microsoft" to "Authenticate manually" and configure it with Microsoft Entra ID (formerly Azure AD). This gives you authentication without requiring an M365 Copilot license.
- Users are external or you don't need authentication on SharePoint:
→ Set authentication to **"No authentication"**. This allows anyone with access to the SharePoint page to interact with the agent.
Step 3 — Republish the agent
After changing authentication settings, you must republish the agent. Changes do not propagate automatically to already-connected channels — a new publish is always required.
Go to Publish → Publish and confirm. Then re-check the SharePoint channel configuration to make sure it's still correctly set up.
