03 Nov 2026 By James Wilmore
On the face of it, solar panels on commercial buildings seem like a quick and easy all-round win. Landlords and tenants get reduced bills, while their installation also helps the UK reduce its carbon emissions.

Sunny side: Amazon’s fulfilment centre in Leicestershire has a 6,000-panel solar array on its roof

Sunny side: Amazon’s fulfilment centre in Leicestershire has a 6,000-panel solar array on its roof
But despite the multiple benefits, there remains a “stark underutilisation” of solar panels in the commercial property space, according to industry body Real Estate:UK (RE:UK).
In its report ‘From Opportunity to Infrastructure: Scaling Rooftop Solar in Commercial Real Estate’, produced in association with Cushman & Wakefield and published in September, RE:UK reveals that less than 10% of suitable commercial roof space is currently used for solar power generation.
The untapped 90% could generate 60 gigawatts of renewable energy, enough to power 20 million homes a year, the report says.
Despite most landlords and tenants having a positive view of solar energy generation, RE:UK says a combination of factors – including regulation, lack of financial incentive and policy uncertainty – is holding them back from installing photovoltaic panels.
Andrew McEwan, a partner at law firm Forsters, which partnered with RE:UK on the report, says there are often good reasons landlords and tenants are hesitant about solar installations.
Things are going in the right direction to make our grid more resilient
Andrew McEwan, Forsters
“It comes down to who is funding the project and who is ultimately extracting the most benefit,” McEwan says. “Landlords are trying to deliver solar on their tenants’ buildings as a way of hitting their own targets and potentially extracting an additional revenue source.
“But tenants are concerned their landlord is going to turn up and drill several thousand holes into the roof and stick some rather large, heavy steel structures on there, which brings concern about impacting on their liabilities at the end of their term.”
Nic Cory, co-founder and director of solar installation specialist Absolar, says installing panels normally requires changes to the lease terms, which can be problematic for both tenants and landlords. “Suddenly, there’s an opportunity to renegotiate something and you’ve opened the floodgates,” he explains.
The delivery model can also prove problematic. The market is dominated by power purchase agreements, whereby a landlord installs solar panels and sells the electricity at a pre-agreed unit rate to the occupier.
But according to the RE:UK report, differing lease terms, expiry dates, energy consumption and risk tolerances often require bespoke drafting.
“This significantly increases legal costs and lengthens transaction timelines, sometimes to the point where projects become commercially unviable,” the report says.
Ultimately, landlords want to know they are going to get the money back for their upfront investment, McEwan says. “A landlord might have a nice power-hungry tenant in there on day one, but three years later they serve a break notice and you’re stuck with a vacant unit for a year,” he adds.

Keeping up with the times: Absolar has installed ultra-lightweight panels on the roof of the grade I-listed De La Warr Pavilion in Bexhill-on-Sea

Keeping up with the times: Absolar has installed ultra-lightweight panels on the roof of the grade I-listed De La Warr Pavilion in Bexhill-on-Sea
The current electricity grid is also problematic. Historically, electricity has been generated from centralised plants that produced a predictable output, with power flowing in one direction. Now, the system is becoming decentralised, with generation spread across thousands of smaller sources such as rooftop solar and wind turbines.
Excess power can also be ‘exported’ back to the grid. As a result, RE:UK says power flows are less predictable and can even reverse direction, “creating challenges for voltage control and system stability”.
McEwan says the current infrastructure “wasn’t designed” for generating power on rooftops. “This means new connections are harder to secure, with the additional upgrades or controls needed often coming with significant costs,” he explains.
At the Labour Party conference in September, prime minister Andy Burnham announced the creation of Great British Grid, a publicly owned company that will bring electrical energy distribution under greater public control. He said the body would “increase competition, drive down costs and speed up connections”.
McEwan says the idea appears to have gone down well. “Things are going in the right direction to make our grid more resilient and make the application process more efficient, but it’s not easy, and grid capacity tends to be the big stumbling block across most of our developer clients,” he says.
However, Cory believes that grid connection issues are often used as a “big excuse” for solar not being adopted: “A good designer can work with the DNO [distribution network operator] to get around grid constraints.”
A good designer can work with the DNO to get around grid constraints
Nic Cory, Absolar
While challenges remain, the current direction of government policy suggests the adoption of solar will need to accelerate. One significant change is updated Minimum Energy Efficiency Standards. After nearly five years of deliberations, the government confirmed in June that all privately rented commercial buildings over 1,000 sq m (10,764 sq ft) in England and Wales must achieve an EPC ‘B’ rating by 2031. “That will drive people to adopt at a greater speed than they were,” McEwan says.
In July, Flora Harley, head of energy and sustainability research at Knight Frank, published an article titled ‘What will it take to get to B by 2031?’ She argues that intervention is “increasingly likely through retrofit, repositioning or, in some cases, loss of lettability” for occupiers in buildings that don’t yet meet the EPC ‘B’ requirement.
She says that occupiers are likely to be the ones who end up paying: “While capital expenditure will sit with landlords, recovery is likely to be reflected in service charges, green lease provisions or rent negotiations.”
The biggest opportunity lies in the industrial and logistics sector. According to the RE:UK report, there is an estimated 200m sq m to 240m sq m of usable space on warehouse roofs, enough to generate 47 gigawatts of energy. “Warehouses tend to have the largest amount of empty flat space with few overshadowing structures, so you can really load it up with solar,” McEwan says. “There’s also further opportunity there if the cost of battery storage starts to come down.”
Chris Hewett, chief executive of trade body Solar Energy UK, says warehouse tenants are also starting to use more electricity as they decarbonise. Increasingly, he says, forklift trucks and other logistics vehicles, such as vans and lorries, are becoming electric powered. Plus, more employees are driving electric vehicles to work. “So, the natural place to charge these is the logistics hub and that’s going to increase the power demand,” he adds.
While solar panels are generally seen as a positive, there are some places where they might not work efficiently.
McEwan points out that buildings in city centres might be overshadowed by taller buildings, for example, which can limit the solar-generating potential. Older buildings can be a problem too if there is concern over the structural stability of a roof.
The natural place to charge these [vehicles] is the logistics hub
Chris Hewett, Solar Energy UK
So, what needs to happen to encourage more commercial landlords to install solar?
The RE:UK report recommends eight policy changes (see box, right). These include reforming the REIT regime to “explicitly accommodate income from renewable energy generation and supply” because “REITs should not be disincentivised from investing in solar on their assets”.
Tax measures should also be looked at, with RE:UK calling on the government to consider how existing or new tax incentives could help landlords and occupiers with rooftop solar installations. “This could include targeted reliefs for occupiers entering into long-term solar agreements, participating in rooftop
solar projects or enabling landlords to deploy solar infrastructure on occupied assets,” the report says.
Cory believes that the key to success is to “get the export market working”. He adds: “There’s a high demand for energy. It costs a lot already. Therefore, if you wanted to sell it at 15p, there’s plenty of buyers who would take it. It’s just a very opaque market. It’s hard to access. It’s hard to set up the contracts.”
Even without these interventions, increased adoption of solar appears inevitable as the price of energy increases due to the unstable geopolitical situation.
“Where energy shocks were happening every five years, they’re now happening five times a year,” Cory says. “It’s becoming an item on the risk register of businesses.”
The RE:UK report makes the following recommendations for improving solar generation on commercial properties:
1) Reform the REIT rules. Clarify the treatment of solar within the REIT rules and broaden the REIT regime to include renewable energy generation.
2) Address business rates and regulatory barriers. Extend the business rates exemption for solar panels beyond 2035. Introduce additional capital allowance reliefs and tax incentives such as a super deduction for solar arrays.
3) Standardise commercial frameworks. Encourage and support a move towards more standardised legal templates and lease clauses to reduce legal complexity.
4) Consistent insurance requirements. Work with insurers and regulators to introduce clear, consistent standards and requirements for solar rooftop projects.
5) Improve export economics. Introduce a guaranteed, long-term pricing mechanism for selling back to the grid, in line with European competitors.
6) Grid reform and investment. Accelerate grid reform and investment to improve connection timelines and unlock capacity for rooftop solar.
7) Strengthen policy clarity and mandates. Publish full details of new Minimum Energy Efficiency Standards, mandate data sharing and ensure the review of the Landlord and Tenant Act 1954 removes barriers to the installation of solar following lease renewals.
8) Streamline planning approvals. Reduce administrative barriers by increasing the rooftop solar planning threshold from 50 kilowatts to at least 300 kilowatts.
Editorial: Climate & sustainability Market Features Markets
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