Single-Let Logistics Shed, Midlands — 780 kWp Roof Lease

This is a representative project profile, not a named real client. The structure, figures and consenting sequence below reflect how we approach single-let distribution assets where the owner wants the EPC and ESG benefit without committing capital. We have anonymised it deliberately, and we have not inflated the numbers to make the route look better than it is.

The challenge: a good asset, no appetite to fund the roof

The asset is a single-let logistics shed of roughly 11,000 sqm in the Midlands, held by a property investor as part of a wider let-investment portfolio. The building is let on a 12-year FRI lease to a national distributor with a strong covenant, around six years unexpired. The tenant is the rates payer and pays its own electricity. The roof is large, modern and structurally sound — close to ideal for solar.

On paper the case for a 780 kWp array writes itself. The problem is who pays for it. The owner had no capex appetite. A self-funded install would have cost in the region of £620,000–£700,000 (commercial solar runs roughly £700–£1,100 per kWp ex VAT, falling with scale; commercial installs have been 0% VAT since April 2022). Under the FRI structure the tenant takes the energy benefit, so a landlord who funds the array on a let asset is buying the export value and a band on the EPC — but not the bill saving, which sits with the occupier. That is the classic split-incentive problem, and it is the reason a lot of investor-held roofs stay bare.

There was also a deadline shaping the conversation. The building held an EPC at the upper end of band C. EPC E remains the only binding MEES standard in England and Wales — it has been unlawful to let sub-E commercial space since 1 April 2023 — but the government’s interim response of 18 June 2026 set out a proposed EPC B by 2031 for privately-rented non-domestic buildings over 1,000 sqm, where cost-effective and subject to secondary legislation. At 11,000 sqm this asset sits squarely inside that proposed scope. The owner wanted the band moving now, while the cost of doing so could be carried by someone else.

Why a roof lease, not a funded install

Rather than push the owner toward capital they did not want to spend, we structured the project as a 30-year rooftop airspace lease. A third-party developer funds, owns, operates and maintains the 780 kWp system for the life of the lease. The owner grants a lease of the roof space and airspace; the developer sells the generated power to the tenant under a separate supply arrangement at a discount to grid.

The economics for the owner are deliberately simple. There is no capital outlay and no maintenance liability — the array sits on the developer’s balance sheet, not the owner’s. The owner takes an index-linked ground rent for the airspace. The tenant is offered electricity below the grid rate it pays today (large commercial users are paying around 24.3p/kWh ex VAT in 2026), which strengthens the leasing relationship and supports the covenant the owner is relying on. At roughly 741,000 kWh a year of generation against a high daytime logistics load, self-consumption is strong, which is what makes the tenant discount and the developer’s funding model work.

This is route C in our framework — selling the roof — and it is not the right answer for every asset. An owner-occupier keeping 100% of the economics, or a landlord-to-tenant PPA, will often beat a roof lease on headline return. We walk through the trade-offs in our guide on roof lease vs PPA vs licence. Here, the owner’s flat refusal to fund and the strong sitting covenant made the lease the cleanest fit.

The consents we handled

A roof lease lives or dies on the legal and structural groundwork. The headline saving is meaningless if you cannot get the lease registered or the lender on side. We sequenced and managed the consents so the owner did not have to:

• Mortgagee consent. The asset was charged. We engaged the lender early with the heads of terms, the developer’s covenant and the ground-rent profile, securing consent to grant the lease and confirming the array did not breach loan covenants.
• Structural survey. An independent structural engineer confirmed the roof and frame could carry the additional dead and wind load of a 780 kWp array over a 30-year term, with a remedial schedule where required before installation.
• SDLT and Land Registry. The grant of a long lease at a premium and rent has Stamp Duty Land Tax consequences and must be registered. We coordinated the SDLT position and the Land Registry application so the developer’s interest was properly recorded and the title clean.
• Lease and supply alignment. We made sure the airspace lease, the existing occupational lease and the tenant power-supply arrangement did not contradict one another on access, repair, insurance and end-of-term reinstatement.

We treat this checklist as standard. It is the same diligence we set out in owners’ due diligence, and it is the part of a roof lease that most catches owners out when a developer leads with the headline ground rent and glosses over the consents.

The outcome

The owner committed no capital and took on no operational liability. They receive an index-linked ground rent and a tenant who is paying less for electricity than before — a softer benefit, but a real one when a lease renewal is on the horizon. The EPC moved from band C to band A. Solar typically lifts a commercial EPC by one to three bands rather than guaranteeing any specific jump, and here the headroom and the building’s existing efficiency carried it to A. That repositions the asset against the proposed 2031 EPC B standard well ahead of any secondary legislation, and it fed through into a stronger GRESB submission across the portfolio.

Illustrative quote

For an asset of this profile, an illustrative position is: 780 kWp generating around 741,000 kWh a year; £0 owner capex; an index-linked ground rent on the airspace lease; a tenant electricity discount below grid; EPC C to A; and a 30-year developer-funded, developer-maintained term. These figures are representative and would be confirmed by a structural survey, a G99 grid assessment with the DNO (above ~50 kW the DNO connection is usually the real bottleneck), and lender and tenant engagement on any live asset. We cover the wider route for investor-held stock under let investment property.

If you hold single-let or multi-let investment assets and want the EPC and ESG benefit without funding the array yourself, we will model the roof-lease, PPA and owner-funded routes side by side and tell you honestly which one your asset and your tenant actually support. Request a quote and we will engineer the ownership and lease structure so the right party pays and the right party benefits.