Do Tenants Benefit From Solar Panels on a Landlord's Roof?

Tenants ask it, and owners should be able to answer it: if my landlord puts solar on the roof, what do I get? The honest answer is that it depends entirely on how the deal is structured, and the structure is a choice the owner makes. A tenant who benefits tends to cooperate with the works and to renew. A tenant who does not benefit, or who is asked to pay for something that saves them nothing, tends to object.

This is the occupier’s side of the split incentive. The owner owns the roof and the capital; the tenant pays the bill and holds the saving. Here are the four routes that decide whether the tenant gains.

Route 1: common parts only

The array sits behind the landlord’s own supply and offsets lifts, communal lighting, plant and the car park. The tenant does not buy any of that power directly, so the direct benefit is indirect: where the running cost is recovered through the service charge, a smaller landlord bill means a smaller recoverable charge. It is a modest but real benefit with no tenant contract involved. See common-parts solar for multi-let landlords.

Route 2: a landlord-to-tenant PPA

The landlord owns the array and sells the electricity it generates to the tenant at a price below the grid unit rate. The tenant draws solar first and the grid for the rest, and saves the difference. The owner recovers the capital through the unit price, not through the service charge. This is the clearest route for a tenant to see a benefit on its bill. The mechanics, including behind-the-meter and private-wire supply, are in our landlord-tenant PPA guide.

Route 3: a capped green-lease contribution

The tenant pays an agreed annual contribution towards the solar, but the market principle is that the contribution is reasonable only up to the tenant’s own measured savings. A tenant should never be worse off than buying grid power. Inside that cap the tenant still keeps the margin. The terms usually live in a green-lease addendum; the drafting points are in BBP Green Lease Toolkit: the solar clauses an owner needs.

Route 4: a developer-funded roof lease

A developer funds and owns the array. The owner takes rent, and the building’s occupiers typically buy the on-site power at a discount to grid under a PPA. The tenant benefits through the discount; the owner benefits through rent and a more lettable building. The owner gives up control and most of the export income. The checklist for that deal is in a landlord’s clause checklist for a solar lease agreement.

What a tenant does not get

Be careful with the promises. Solar only displaces grid import when the sun is shining, so a tenant still needs a grid contract for everything else. Savings depend on how much of the output the tenant’s own load can use during the day. And a tenant should not be asked to fund panels through the service charge: under the RICS Service Charges in Commercial Property standard (2nd edition, in force 31 December 2025), the initial capital cost of new plant is not recoverable that way.

Why the answer matters to the owner

An owner who can say what the tenant gets has a shorter negotiation. The tenant-savings cap turns cooperation into a rational decision rather than a favour, and it protects the relationship if the building is later marketed. Our longer piece, your tenant pays the bills, so how do you profit from solar, takes the owner’s side of the same question.

Frequently asked questions

Will my energy bill fall if my landlord installs solar?

Only if you buy the power or if the landlord’s lower running cost reduces your service charge. Under a PPA or a capped contribution your saving is measured against grid price.

Can my landlord charge me for the panels?

Not through the service charge for the initial capital cost, under the RICS standard. A landlord can seek a contribution through a green-lease addendum, a PPA price or rent, usually capped at your savings.

Should I agree to roof works on my building?

Check your alterations clause and what you are being offered. If the arrangement gives you cheaper power and protects your premises and access, cooperation is usually in your interest.

Is there a way to see how this would work for a specific building?

Send an enquiry with the building and tenancy details and we reply by email.