Path-Q Solar

How should a business calculate solar ROI when it leases the building?

Answer

Include only the benefits the business can legally and practically receive during the remaining lease term, and verify that the lease permits installation, roof use, maintenance access, and removal. Compare the system's cost with energy savings and other benefits before lease expiry, while separately modeling renewal, assignment, or early relocation.

Key points

  • Use the remaining lease term as a primary ROI horizon unless renewal is sufficiently certain.
  • Determine who owns the equipment and receives incentives, savings, depreciation, or other benefits.
  • Allocate roof rights, structural responsibility, insurance, maintenance, and removal obligations.
  • Include end-of-lease removal, restoration, and transfer costs.

What it depends on

  • Remaining term, renewal options, and landlord consent
  • Lease rights concerning the roof and electrical equipment
  • Business electricity use and tariff
  • Ownership, financing, incentives, and end-of-term obligations

Risks and trade-offs

  • A system may not pay back before the business must leave or renegotiate the lease.
  • The landlord may capture property benefits while the tenant pays for installation or disruption.
  • Removal or restoration obligations can materially reduce ROI.

Information you may need

  • Complete building lease and amendments
  • Landlord consent and roof/electrical rights
  • Remaining term and realistic renewal probability
  • System proposal, energy model, and ownership structure

Your next step

What to do next

Obtain written landlord approval and model ROI through lease expiry, expected renewal, assignment, and early-move scenarios.

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Some details may depend on your location, installer, utility, incentives, regulations, or specific property.

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