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Solar roof rental vs. contracting

Solar roof rental vs. contracting

The potential of roof surfaces for the installation of solar systems on commercial properties is considerable. Companies that do not wish to invest in a PV system themselves are faced with the fundamental question: Solar roof rental vs. contracting - Which model is worthwhile? Theoretically, systems with an output of almost 37 gigawatts could be installed on the roofs of German logistics and industrial properties alone. These areas cover around 363 million square meters on around 32,500 buildings, although only around 10% of these areas are currently equipped with photovoltaics. It is estimated that around 80% of the roofs could support photovoltaic systems through structural upgrades, which corresponds to a capacity of 29 gigawatts.

Both the solar roof rental business and the Contracting make it possible to use solar energy efficiently, but differ in terms of their structure, financial impact and ecological benefits. With solar roof leasing, the roof surface of a building is leased to an operator of solar systems. This is a comparatively Simple modelwhich enables building owners to generate income without having to worry about the operation of the solar system. However, the Yields for the roof owner often limitedand the use of the electricity generated is in the hands of the operator.

In contrast, contracting offers a more comprehensive and Economically more advantageous concept. Here, a solar system is installed, operated and financed by the contractor, while the customer uses the electricity generated directly on site. This model not only offers considerable Reduction the Energy costsbut also makes it possible to actively improve the carbon footprint by offsetting the CO₂ savings in CSRD and ESG reporting.

What is solar roof rental?

In solar roof leasing, the owner of a roof (e.g. a property) leases the roof area to an operator of solar installations. The operators are usually investors or solar companies. They install and operate the plant independently and regularly take care of maintenance. They usually feed the electricity generated into the public grid and sell it in this way. This does not result in any direct benefits for the roof owner in terms of reducing energy costs or their carbon footprint.

The roof owner or landlord receives Fixed rental or lease payments for the provision of the roof space, which can be monthly or annual depending on the agreement. The contracts are typically fixed for 20 years and can include additional benefits such as a roof renovation or a one-off payment for the entire term. However, the returns for the roof owner are comparatively low. Rental prices per square meter of roof area are often €1 to €2 or around €5 per kWp installed.

Who is solar roof rental suitable for?

Solar roof rental is initially just as suitable as a contracting model for owners who want to use their roof areas without having to invest in a photovoltaic system themselves. They receive regular lease payments without having to bear the financial risk and the expense of installing and maintaining the system. The solar power is not automatically available to the owner and, depending on the rental or leasing model, the Limited flexibility of the property be. The long-term obligations with all their legal and technical aspects can deter potential buyers and restrict the use of the roof for other purposes. This becomes problematic if, in particular, changes to the building or necessary roof repairs are pending, which must be coordinated with the operator of the solar system. In summary, solar roof rental can be worthwhile for companies that do not need cheap solar power and do not shy away from long-term contracts with restrictions on the fungibility of the property.

What is contracting?

In contracting, an energy service or electricity supply contract is concluded in which the customer is supplied with energy directly from a solar system. The contractor takes over the planning, construction, operation and maintenance of the system, while the customer benefits from low-cost, sustainable energy. By using the solar power generated, companies can expect to save up to 30% in energy costs. The contracts also generally have terms of 15 to 20 years and offer the option of Long-term electricity price security.   

As with solar roof rental, the roof owner does not need to invest in the photovoltaic system. They provide the roof area and can purchase the solar power generated at a contractually agreed price. Surplus electricity is usually fed into the public grid or sold tax-free within a radius of 4.5 km. In addition, the customer can offset the CO₂ savings achieved by the solar system in the CSRD and ESG reporting and the Guarantees of origin (HKN) sell.

Smart contracting models limit the fungibility of real estate not one and offer the property owner More flexibility. It not only offers Financial advantages through higher energy savings, but also a sustainable improvement in the carbon footprint. In addition, the revenues for the electricity user or roof owner are significantly higher with contracting than with leasing, as they are not limited to fixed rental payments.

Who is contracting suitable for?

The contracting model is particularly suitable for building owners and companies that want to use generated solar power yourselfand want to reduce their energy costs in the long term while benefiting from the advantages of an improved carbon footprint. In addition, owners remain more flexible, retain control over their roof area and have the option of taking over the PV system during the term of the contract or afterwards. The electricity tariffs remain unchanged over a long period of time and there is usually not even a purchase obligation. In addition, a good CO₂ balance improves a company's position within the Supply Chain Act and strengthens the image. Overall, contracting is the better choice for anyone who wants to maximize the benefits and returns from a solar system in the long term.

The most important differences between solar roof rental and contracting

The main difference between solar roof rental and contracting lies in the use of electricity: with contracting, the building owner uses the solar electricity generated directly, whereas with solar roof rental, the electricity generated is generally fed into the public grid and the landlord has no direct claim to its use. The target groups are therefore different. Solar roof rental is aimed more at owners who want to rent out their roof areas and benefit from the lease payments without having to invest in the system. The contracting model, on the other hand, is aimed at owners who want to use the solar power generated themselves, reduce their energy costs and improve their carbon footprint. In addition to the absolute additional yield of contracting models, property owners benefit from the flexible contract design and all aspects that result in a CO₂ reduction and increased efficiency in German and European regulation. In addition, the owner does not have to cede the rights to use their roof area and fungibility is retained.

AspectSolar roof rentalContracting
Solar system operatorsTenant of the roofContractor
Compensation for the roof ownerRoof rent (approx. 1-2 €/m² or 5 €/kWp)Long-term favorable electricity supply contract
PurposeProvision of the areaEnergy generation & sale of solar power
Energy useMarketing by tenants / system operators (feed-in)Roof owners/surrounding neighbors or throughout Germany
Contract typeRental / lease agreementElectricity supply contract (PPA)
Additional benefits for roof ownersnoneCO2 savings, HKN marketing, etc.
FlexibilitynoneFungibility is retained, early purchase of the PV system possible, no obligation to purchase electricity

Sample calculation: Solar roof rental vs. contracting

A company decides to use the roof area for a photovoltaic system. A 1 MWp PV system is installed on the roof, taking up around 4,800 m² of roof space. The system generates around 900,000 kWh of electricity per year and saves 423 tons of CO₂. Under a contracting model, the company pays an electricity price of 12 ct/kWh. Compared to the average industrial electricity price of 16.7 ct/kWh, the high self-consumption of solar power of 86.5 % results in annual savings of €36,590. Added to this are a further €16,500 in savings from CO₂ certificates, which have a positive impact on the company's carbon footprint. As soon as CO₂ certificates have to be purchased, the contracting model saves the company a total of over 53.000 €. If, on the other hand, the company opts for pure solar roof rental or leasing, the annual yield is just under 10.000 €if € 2 per m² can be achieved.

Conclusion: Solar roof rental vs. contracting - which is the better solution?

Although both models contribute to the use of solar energy, contracting offers significantly greater economic and ecological benefits.

While solar roof rental is an easy way to monetize unused roof space, the income is comparatively low and the roof owner does not benefit directly from the energy generated or the environmental benefits.

In contrast, contracting not only offers considerable financial benefits through lower energy costs and higher revenues, but also the opportunity to claim CO2 savings for your own carbon footprint. In this way, companies and households can make an important contribution to their sustainability goals and at the same time save costs in the long term.

If you are looking for a sustainable and economically advantageous solution, contracting is clearly the better choice.

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