By the PPA Funding team Last updated
Tenants can get commercial solar, but because they do not own the building, they need the landlord's agreement to install on the roof. The practical questions are lease length, who pays and who keeps the savings, which is why a clear agreement between tenant, landlord and funder is essential.
The landlord question comes first
Solar panels attach to the building fabric, which the tenant does not own, so any installation needs the landlord's consent and usually a variation or agreement alongside the lease. Landlords are often open to it, because a solar system can improve the building's energy rating and appeal, but the consent and the terms have to be settled before anything is installed.
Check your lease for clauses on alterations, and expect the landlord to want assurances on structural loading, insurance, maintenance access and what happens to the system at the end of the tenancy.
The split-incentive problem, and who benefits
The classic obstacle is the split incentive: the tenant pays the electricity bills and would enjoy the savings, but the landlord owns the roof and might be asked to pay for the system. If the party that pays is not the party that benefits, projects stall. The solution is an arrangement where the costs and benefits line up.
A power purchase agreement fits this well. A funder pays for the system, and the occupier who uses the electricity pays a fixed rate per kilowatt-hour, at least 30% below the grid price, for what they consume. Nobody has to fund the hardware, so the tenant benefits from cheaper energy while the landlord grants roof access rather than capital.
Lease length and practical fit
Solar and PPA terms run for many years, so a short remaining lease complicates matters. Where a lease is short, options include aligning the arrangement with a lease renewal, a shorter-term funding structure, or the landlord taking on the system so it stays with the building regardless of tenant.
For an occupier with a long lease, or one likely to renew, solar can make clear sense. The right structure depends on the lease, the parties and the roof, so it is worth getting the landlord, tenant and funder around the table early rather than designing the system first.
This guide is general information, not financial or tax advice. Your circumstances determine what applies — please confirm with your accountant or advisor. Get a tailored proposal →
Frequently asked questions
Can I install solar if I rent my premises?
Yes, with the landlord's agreement. Because the panels attach to a building you do not own, you need consent and usually a formal arrangement covering installation, maintenance access and end-of-tenancy terms. Many landlords agree, as solar can improve the building's rating and value.
Who benefits from solar on a rented building?
Typically the occupier who pays the electricity bills, since they use the generation and save on imported power. A PPA suits this because a funder owns the system, the tenant pays only for the energy used, and the landlord provides roof access rather than capital.
Related guides
- What Size Battery Does My Business Need?
- Commercial Solar as a Business Investment
- Commercial Solar for Flat and Metal Roofs
See our funding options, commercial solar and solar by industry pages.