Solar PV: A smart investment for commercial landlords

Many landlords assume that installing solar panels on a leased commercial property is too complex or financially unfeasible. However, with improved financing options, simplified agreements and strong economic and environmental incentives, solar PV is now a viable and attractive investment. Let’s take a look at why commercial landlords should consider solar energy:

1. Reduced energy costs
Electricity prices have surged in recent years, and solar energy provides a cost-effective alternative. If landlords cover electricity costs for communal areas or entire buildings, solar PV can significantly cut expenses. For tenants with high energy usage, access to on-site solar power reduces reliance on grid electricity, helping to stabilise costs and future-proof their businesses against fluctuating energy prices.

2. Improved sustainability and ESG compliance
Sustainability is no longer just a corporate buzzword, it’s a crucial factor for businesses. Installing solar PV enhances a property’s environmental credentials, helping landlords and tenants meet sustainability and Corporate Social Responsibility (CSR) goals. Many businesses now prioritise leasing in energy-efficient buildings, making solar-equipped properties more attractive.

3. Increased property value and marketability
Commercial properties with renewable energy installations are in higher demand. Solar PV can enhance a property’s value by reducing operating costs and making it more desirable to tenants looking for sustainable, cost-efficient spaces. A solar-powered property also gains a competitive edge over similar sites that lack renewable energy solutions.

4. Revenue generation: Selling solar energy to tenants
Landlords can sell solar-generated electricity to tenants through a Power Purchase Agreement (PPA), offering them lower electricity rates while generating a steady income. This arrangement benefits both parties - tenants pay less for power and landlords gain a new revenue stream from their solar installation.

5. Government incentives and tax benefits
Various government grants, tax relief schemes and financing packages exist to support solar PV adoption. Landlords can benefit from capital allowances, grants and Feed-in Tariffs (FiTs) or Smart Export Guarantees (SEG) for selling excess energy back to the grid. These incentives help improve ROI and shorten payback periods.

6. Battery storage and peak demand management
Pairing solar PV with battery storage allows landlords to store excess energy for use during peak times, further reducing demand charges and electricity costs. This strategy is particularly beneficial for properties with high energy consumption outside daylight hours.

Sector-specific benefits of solar PV

Obviously commercial properties vary widely in function and energy requirements, but a solar PV installation can offer very specific benefits depending on the type of property. Let’s take a look at how specific types of commercial properties can benefit from solar installations.

1. Office buildings
•    Lower operational costs: Solar power reduces costs for lifts, lighting and HVAC systems in shared spaces.
•    Sustainable corporate appeal: Green buildings attract corporate tenants who prioritise sustainability.
•    PPA opportunities: Landlords can sell solar energy to tenants at a competitive rate.

2. Warehouses and industrial units
•    Large roof space: Ideal for high-capacity solar installations.
•    Cost savings for energy-intensive Tenants: Manufacturing, data centres and refrigeration businesses will all benefit massively from lower energy costs.
•    Battery storage potential: Excess energy can be stored and used during peak hours to avoid high demand charges.

Warehouse landlords - read our blog - Navigating MEES: How Solar Panels Can Future-Proof Your Warehouse which explores the effects of Minimum Energy Efficiency Standards (MEES) on warehouse landlords and how investing in solar energy will not only improve your EPC ratings, but deliver considerable additional commercial benefits.

3. Retail parks and shopping centres
•    Solar for multiple tenants: Energy can be distributed among different retailers.
•    EV charging integration: Solar power can support electric vehicle charging stations, attracting more customers.
•    Green branding: Retailers benefit from marketing sustainability initiatives to eco-conscious shoppers.

4. Hotels and hospitality
•    Lower operating expenses: Reduces costs for lighting, heating and air conditioning, which are in constant use.
•    Sustainable tourism appeal: Helps hotels meet eco-tourism certification standards.
•    Battery storage benefits: Ensures energy is available for nighttime operations.

5. Student accommodation and residential complexes
•    Reduced tenant energy bills: Lower living costs make the property more attractive to students and long-term renters.
•    Government grants: Some regions offer funding for renewable energy installations in rental housing.

A low-risk, high-return investment
For commercial landlords, solar PV is more than just an environmental decision, it’s a smart financial move. With reduced operational costs, government incentives, additional revenue streams, and enhanced property value, solar power delivers a strong ROI. As businesses increasingly demand sustainable buildings, landlords who invest in solar energy will gain a competitive advantage, ensuring long-term profitability and tenant satisfaction.

Now is the time for landlords to harness the power of the sun and future-proof their commercial properties. Whether you manage office spaces, warehouses, retail centres, or accommodation, solar PV offers a sustainable and financially rewarding solution for the future. Get in touch today. We’d love to future proof your property!