Mixed-Use Developments: Solar for Commercial Property

A mixed-use development is three buildings stacked on one title: a landlord whose common parts draw power day and night, commercial units on the ground floor that consume during business hours, and residents above who use most of their electricity in the evening. One roof, three different consumers, three different supply licences. The reason solar so often stalls on these schemes is not the array — it is the failure to decide, before a single panel is specified, which meter the generation feeds and which party therefore pays and benefits. We design the metering and supply structure first, then size the system to it. That ordering is what turns a planning condition into an asset that earns.

The ownership challenge specific to mixed-use

Most commercial solar advice treats a building as a single load behind a single meter. Mixed-use breaks that assumption. You typically have a landlord supply for common parts (lifts, stair and corridor lighting, communal heating, car park, EV charging, pumps), one or more commercial tenant supplies, and a block of residential supplies — each domestic flat with its own meter and its own supplier. Feed solar to the wrong point and you either give the benefit to a party you did not intend, or you trip a regulated activity — supplying electricity to a domestic occupier — that you are not licensed to carry out.

There are three workable routes, and the right one depends on who owns the freehold and how the leases are written:

• Landlord common-parts supply (route A). The cleanest. The array feeds the landlord-controlled meter serving lifts, lighting, communal plant and the car park. The landlord pays for that load and consumes the solar directly, displacing grid electricity at roughly 24–28p/kWh. No split incentive, no supply licence question, no resident billing. On a scheme with significant communal load this alone can justify the system. We work through it in detail in our guide to common-parts and landlord supply.
• Commercial-tenant supply via PPA (route B). Where the ground-floor commercial units have meaningful daytime demand, a behind-the-meter or private-wire power purchase agreement sells the generation to the occupying business below the grid rate. The landlord recovers the capital through the PPA tariff rather than through the service charge — which matters, because under the RICS Service Charges in Commercial Property professional statement (2nd edition, in force 31 December 2025) the initial capital cost of new plant is not recoverable through the service charge.
• Resident supply via an embedded network. Supplying the residential flats is a regulated activity. It can be done under the licence-exemption regime (the “Class A/B” exemptions for small suppliers and the licence-exempt supply thresholds), usually structured as an embedded private network with a metering and billing operator. This is the most complex route, carries Ofgem and consumer-protection obligations, and needs to be designed in at planning stage — it is rarely worth retrofitting onto an existing block.

For schemes that are predominantly commercial with a residential element on top, route A plus route B usually captures most of the value with the least regulatory weight. We map the meter strategy to your specific lease and freehold structure before recommending one.

Sizing and economics

Roof area on a mixed-use block is shared between plant, terraces, rooflights and amenity space, so usable area is typically lower than on a clean industrial roof. Most schemes land between 100 kW and 600 kW, generating roughly 95,000 to 570,000 kWh a year at the UK benchmark of about 950 kWh per kWp.

At ex-VAT commercial pricing — and remember a commercial install has been 0% VAT since April 2022 — a 100 kW system runs about £82,000–£110,000 and a 500 kW system £350,000–£500,000, with the cost per kWp falling as the array grows. Self-consumption is the single biggest return driver: a mixed-use scheme with a continuous communal base load (lift motors, corridor lighting, ventilation, car-park and EV charging running into the evening) can self-consume a high share of generation without a battery, because residents and common parts together flatten the demand curve that a daytime-only commercial building cannot. Surplus that is genuinely exported earns SEG — a supplier-set top-up, best agnostic fixed deals around 12–15p/kWh — not a headline return.

Typical payback sits around six years, shortening on schemes with heavy 24/7 communal load or where the Annual Investment Allowance (£1m, permanent) front-loads the tax relief in year one. A note on that relief: solar PV is a special-rate integral feature, and the 100% first-year deduction comes from the AIA — not from full expensing, which gives only the 50% First-Year Allowance on solar and is unavailable for assets bought to lease. If you are funding the array as a landlord to feed a PPA or roof lease, the economics rely on AIA plus the 6% writing-down allowance, not full expensing.

Compliance: the whole-scheme view

Mixed-use is where planning policy, not just the energy case, drives the decision.

• Planning policy frequently mandates on-site renewables. New and substantially refurbished mixed-use schemes are routinely conditioned to deliver on-site generation — the London Plan Policy SI 2 energy hierarchy and “be green” requirement is the best-known example, and many local plans mirror it. Designing solar in from the outset discharges the condition rather than fighting it later.
• Permitted development and the rooftop route. Rooftop commercial solar is permitted development under Class J, subject to a 56-day prior-approval step covering design, appearance and glint/glare — not a free pass, and excluded on listed buildings or where an Article 4 Direction applies. The 1 MW cap on commercial rooftop solar was removed on 21 December 2023 (SI 2023/1279). The car park, if there is one, can take solar canopies under Class OA. Our planning and grid guide walks the full process.
• The grid connection is the real bottleneck. Above roughly 50 kW you need a G99 DNO connection, and on a development already drawing for residential, commercial and communal loads the available headroom is the constraint that most often dictates final system size. Apply early.
• MEES and EPC across the scheme. Letting any commercial unit below EPC E has been unlawful in England and Wales since 1 April 2023 — that is the binding law today. EPC B by 2031 is a proposal (Government interim response, 18 June 2026) limited to privately-rented non-domestic buildings over 1,000 m², subject to secondary legislation. The earlier “EPC C by 2027” target was scrapped, and “EPC B by 2030” was never law. Solar typically lifts a commercial EPC by one to three bands; we will not promise a specific jump. See the gov.uk MEES guidance and our MEES and EPC guide.
• Business rates. Rooftop solar and co-located battery storage are 100% exempt from business rates to 31 March 2035 in England. Under a full repairing and insuring lease the rates payer is usually the occupier.

A worked example (illustrative)

A four-storey scheme in a regional city centre: 1,400 m² of ground-floor retail and a café across two commercial units, 22 flats above, a basement car park with eight EV charge points, and communal lighting, two lifts and a corridor MVHR system on the landlord supply. The available roof and terrace edge accommodate a 180 kW array.

The figures below are illustrative, not a quote.

The landlord consumes the communal and EV share directly, sells the daytime commercial share to the ground-floor tenants through a PPA priced under their grid rate, and exports the modest residential-hours surplus. The residential flats are left on their own domestic supplies — no embedded network, no supply-licence exposure. A cleaner version of the same scheme could feed the flats through an exempt embedded network, but only where the development’s scale and management make that worthwhile.

Common questions

Can residents in the flats above benefit from the rooftop solar?

Yes, but only through an embedded network, because supplying electricity to a domestic occupier is a regulated activity. It runs under the Ofgem licence-exemption regime with a metering and billing operator, and it has to be designed in at planning stage — it is rarely viable to retrofit onto an occupied block. On most mixed-use schemes we route the generation to the landlord common-parts and commercial supplies first, which captures the bulk of the value without the regulatory weight, and only build an embedded network where the scale clearly justifies it.

Does a planning condition for on-site renewables mean I have to install solar?

Effectively, on many new and refurbished mixed-use schemes, yes. Policies in the mould of London Plan Policy SI 2 set an energy hierarchy that pushes on-site generation, and a great many local plans mirror it. The practical point is that designing the array in from the outset discharges the condition as part of the consent rather than leaving you to retrofit it under pressure later — and it lets you size the system to a meter strategy you have chosen rather than one forced on you.

Who pays for the system and who gets the benefit?

That depends on the route you choose, which is exactly the decision we make first. If the array feeds the landlord common-parts supply, the landlord pays and consumes the benefit directly. If it feeds the commercial units through a PPA, the landlord funds it and recovers the cost through a tariff the tenants pay below their grid rate — not through the service charge, which cannot recover the capital cost of new plant under the 2025 RICS professional statement. We model each route against your freehold and lease structure before recommending one. The same structural questions arise on any multi-let commercial building, and you can start a scheme-specific assessment from our quote page.