If all the UK’s suitable commercial roof space was kitted out with solar panels, it would generate as much electricity as 20 Hinkley Point C nuclear power stations, a new report claims.
It would fast-track the UK’s path to net zero, keep solar arrays off farmland and drastically cut energy costs for occupiers, it says.
The report was commissioned by property sector membership body Real Estate:UK in partnership with law firm Forsters and solar provider Push Power. It was authored by Cushman & Wakefield.
It drew on data and responses from 70 real estate organisations with some £500bn in combined assets under management.
Today, less than 10% of suitable commercial building roof space is used for solar generation, providing just 3-5GW.
Unlocking the remaining 90% could provide 60GW, more than 10 times the AI data-centre capacity the government expects the UK to need by 2030.
It would also create extra revenue for landlords while decarbonising the UK’s built environment, which emits 25% of the UK’s greenhouse gas emissions.
It would pay for itself, but …
The report notes that financial, regulatory and legal frameworks need to be established but that, if they were, installations would pay for themselves.
It says a typical tenant-funded 300kWp installation costing £250,000 could generate a 20% net yield in its first year and pay for itself in just 5.5 years.
For landlord-funded installations, first-year net yield would be 12% with a payback period of eight years. In each case, the installation would save 53 tonnes of CO2e a year.
However, while 85% of respondents expect to see more rooftop solar installations in the coming years, big hurdles stand in the way of any mega-rollout.
They include mismatches between funders’ requirements and commercial leases, and ambiguity in the REIT regime and insurance terms.
Other constraints include inconsistent commercial frameworks, policy and regulatory uncertainty, grid capacity and connection delays.
The report urges government to help by:
- Removing tax and regulatory barriers by clarifying REIT rules for solar investment, broadening the REIT regime to include renewable energy, extending the business rates exemption for solar investment beyond 2035, and improving capital allowance reliefs;
- Standardising legal and commercial frameworks such as power-purchase agreements and lease clauses to reduce complexity, cost and delays;
- Introducing consistent insurance standards for rooftop solar to reduce design risk;
- Strengthening export revenues through more predictable long-term pricing mechanisms;
- Speeding up grid investment to improve connection times and capacity;
- Using minimum energy efficiency standards (MEES) to make solar a standard feature of commercial buildings;
- Increasing the 50kW cap on permitted development regimes with prior approval with local planning authorities
“Solar energy has a critical role to play in the UK’s energy transition, and commercial real estate has the potential to be a major player in the generation of rooftop solar,” said Rob Wall, assistant director of Real Estate:UK.
“However, as our research shows, deployment of solar on commercial buildings is slow and we are still some way off from delivering that long-promised rooftop revolution. There is ambition … but for that to happen we need a series of policy reforms as set out in today’s report.”
Andrew McEwan, partner at Forsters, added: “Today’s findings reveal the true scale of untapped potential in the UK’s solar landscape. It is clear that almost all stakeholders involved in the real estate sector are keen to make more of that potential but are too often held back by a complex patchwork of commercial, technical and legal constraints – particularly when landlords are looking to roll out solar across tenant-occupied portfolios.
“There is no single solution, but the importance of rooftop solar to all of our net zero/decarbonisation goals makes it imperative that the industry comes together with government to try to find ways through those constraints.”
