Freehold vs leasehold: who pays for commercial solar?

Updated June 2026

Ownership decides who can act. A freeholder/owner-occupier can proceed directly. A tenant on a lease usually needs the freeholder's consent to alter the roof, and the split of cost and benefit is set by negotiation, often via a landlord-funded upgrade, a PPA, or a tenant install with a licence to alter.

Owner-occupier (freehold)

The simplest case: the owner installs, funds it (or uses a PPA/lease) and keeps the savings. Solar also lifts the building's energy rating and asset value.

Tenant on a lease

A tenant generally needs the freeholder's consent, a licence to alter, before installing on the roof. Whether it's worthwhile depends on lease length: the longer the remaining term, the more of the payback the tenant captures.

Common commercial structures

Three patterns dominate: the landlord funds the system and recovers value through rent or a green premium; a third party installs and sells power to the occupier via a Power Purchase Agreement (PPA) with no upfront cost; or the tenant buys the system under a licence to alter.

Approaching the freeholder

If you lease your building. We can help you approach your freeholder about consent, turning a blocker into a funded upgrade conversation.

FAQ

Can a tenant install solar on a leased building?

Usually only with the freeholder's consent (a licence to alter). The economics depend on the remaining lease term.

Who pays for solar on a leased commercial property?

It's negotiated, commonly the landlord funds it, a PPA provider funds and sells the power, or the tenant funds it under a licence to alter.

Does solar benefit the landlord or the tenant?

Both can benefit: the tenant cuts electricity bills, while the landlord gains a higher energy rating and asset value.

Related guides

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