Rooftop Solar PV in England and Wales: An Overview of Legal Aspects and Market Trends
Rooftop solar photovoltaic (PV) systems are now a central feature of the UK's transition to net zero, with England and Wales at the forefront of this shift. Whilst good progress has been made on decarbonising the energy sector, more remains to be done. In line with leading real estate industry bodies, on site renewable energy is preferred over purchasing renewable energy from the grid. Rooftop solar is no longer just a sustainability "nice-to-have"—it is a key driver of asset value, occupier demand, and regulatory compliance. This article provides a practical overview of the legal landscape, the key players and market trends for rooftop solar PV across England and Wales.
Market Trends in Rooftop Solar PV
Market Size and Growth
The UK rooftop solar market has seen rapid, almost exponential expansion, with over 1.5 million homes now equipped with solar panels as of March 2025. Total installed solar capacity in the UK is thought to have reached 18 GW at the beginning of 2025, with about 31% of this capacity on residential rooftops and 69% of the capacity distributed across the commercial landscape. The government's ambitious aim is to increase total solar capacity to 70 GW by 2035, nearly a fivefold increase, with a significant share expected to come from rooftops on homes, commercial buildings, schools, and warehouses.
The commercial rooftop sector is also growing, with innovative funding models such as power purchase agreements (PPAs) enabling multi-site rollouts for major, heavy-weight landlords and occupiers. For example, recent projects have seen portfolios of pubs, leisure centres, and retail parks adopting rooftop solar to meet both sustainability and cost-saving objectives.
Key Drivers
- Rising Energy Costs: High and volatile energy prices have made on-site generation more attractive for both landlords and occupiers.
- Government Policy: The UK government has set clear targets for solar deployment and is introducing requirements for solar on new homes in England by 2027.
- Corporate ESG Commitments: Occupiers and investors are increasingly seeking assets with strong sustainability credentials, including on-site renewables.
- Technological Advances: Falling costs and improved efficiency of PV panels, as well as the integration of battery storage, are making rooftop solar more viable for a wider range of properties.
Funding and Business Models for Commercial Solar Systems
- Direct Ownership: The property owner funds and owns the system, benefiting from all energy savings and any export payments.
- Third-Party Ownership (PPAs/Leases): A solar developer funds, installs, and owns the system, selling the electricity to the property owner or occupier at a fixed rate, typically below grid prices.
- Community and Shared Solar: Some schemes allow multiple occupiers or neighbouring properties to benefit from a single installation, though these are less common in the UK due to regulatory complexity.
- Finance: various financing options, including debt and equity structures, power and emerging trends like crowdfunding platforms and green bonds, play a pivotal role in facilitating the transition to solar energy for businesses of all sizes. As many institutional lenders offer very supportive terms for solar and other green assets the funding available for solar schemes may be amongst the cheapest and longest dated capital a business can raise. Pricing for asset finance funding will depend on term and the credit standing of the business purchasing the solar system.
Legal Aspects of Rooftop Solar PV in England and Wales
1. Property Rights and Landlord-Tenant Issues
Ownership and Consent
- Freehold Properties: Owners can generally install rooftop solar, subject to planning and regulatory requirements. Informed landlords (institutional and otherwise) are approaching tenants of their portfolio to broker deals in relation to a landlord-led installation of solar PV, engineered, in many cases, by a sub-lease of the roof back to the landlord.
- Leasehold Properties: Tenants require landlord consent to install solar panels. Lease terms should be reviewed for restrictions on alterations, and negotiations may be needed to allocate costs, benefits, and responsibilities.
- Multi-Let Buildings: Installation may require
the agreement of multiple parties, including head lessors, superior
landlords, and other tenants.
Allocation of Benefits - Energy Use: Agreements must clarify who uses the generated electricity and who receives payments for exported energy.
- Incentives: Any government incentives or
payments (such as under the Smart Export Guarantee) should be
allocated in the contract.
Maintenance and Liability - Responsibility: Contracts should specify who is responsible for maintenance, insurance, and liability for damage to the roof or system.
- End of Term: Provisions should address removal of the system at lease expiry or sale, and reinstatement of the roof.
2. Planning and Permitting
Permitted Development Rights
- Residential Properties: Most rooftop solar installations on houses are permitted development, provided certain conditions are met (e.g., not protruding more than 200mm from the roof, not installed on listed buildings or in conservation areas without consent).
- Commercial Properties: Similar permitted development rights apply, but installations on listed buildings or in conservation areas will require planning permission.
- Listed Buildings/Conservation Areas: Planning permission is always required, and listed building consent may also be needed.
Building Regulations
- Structural Integrity: The roof must be able to support the additional load of the panels.
- Electrical Safety: Installations must comply with UK wiring regulations and be certified by a competent person scheme.
3. Grid Connection and Export
- Smart Export Guarantee (SEG): Since 2020, small-scale generators (up to 5 MW) can receive payments for electricity exported to the grid. Export is measured by a smart meter, and energy suppliers must offer at least one export tariff.
- Interconnection: An application to the local Distribution Network Operator (DNO) may be required, especially for larger systems. The DNO will assess the impact on the local grid and may impose technical requirements or costs for upgrades.
4. Incentives and Financial Support
- VAT Relief: Since April 2022, the installation of solar panels on residential properties is zero-rated for VAT for five years, reducing upfront costs.
- Grants and Loans: Various schemes, such as the Energy Company Obligation, Local Authority Delivery Scheme (LAD), and Home Upgrade Grants (HUG), may provide support for eligible properties
- No New Feed-in Tariffs: The Feed-in Tariff scheme closed to new applicants in 2019, but existing installations continue to receive payments.
- Future Homes Standard: new homeowners stand to benefit from rooftop solar and cheaper bills, with the Future Homes Standard being published in Autumn 2025.
5. Contractual Considerations
- PPAs and Leases: Contracts should address system ownership, performance guarantees, insurance, maintenance, access rights, and what happens on sale or lease expiry.
- Assignment and Transfer: Ensure contracts are assignable to new owners or tenants to avoid complications on sale or letting.
- Insurance: Check that both the property and the solar system are adequately insured, and that liability for damage or injury is clear.
6. Regulatory and Compliance Issues
- MCS Certification: Installers must be certified under the Microgeneration Certification Scheme (MCS) for systems to qualify for SEG payments and most grants.
- Data Protection: Smart systems may collect data on energy use; ensure compliance with UK GDPR and data privacy laws.
Practical Considerations
Due Diligence
- Roof Condition: Assess the age and structural integrity of the roof before installation; solar panels typically last 20–30 years.
- Title and Encumbrances: Check for restrictions, covenants, or rights that may affect installation.
- Utility Tariffs: Understand local tariffs, SEG rates, and any grid constraints.
Valuation and Resale
- Property Value: Solar installations can increase property value and marketability, especially for energy-conscious buyers and tenants.
- Third-Party Systems: Leased or PPA systems may complicate transactions; buyers may need to assume contracts or negotiate their termination.
Tenant Engagement and Green Leases
- Green Lease Clauses: Incorporate provisions to allocate costs and benefits, facilitate installation, and clarify maintenance responsibilities.
- Marketing: Highlight sustainability and cost-saving benefits to attract tenants and buyers.
Risk Management
- Insurance: Ensure policies cover rooftop solar installations.
- Maintenance: Establish clear responsibilities, especially in multi-occupancy buildings.
Key Players in the Rooftop Solar PV Sector (England and Wales Focus)
Largest Landlords
- British Land and Landsec: Two of the UK's largest commercial property owners, both have active solar programmes across their portfolios.
- Prologis: The world's largest industrial landlord, with significant UK logistics assets and a major focus on rooftop solar.
- SEGRO: A leading UK industrial and logistics REIT, investing in solar across its estates.
Largest Occupiers
- Amazon: Major occupier of logistics and warehouse space, with a strong commitment to on-site renewables.
- Tesco and Sainsbury's: Leading UK retailers with extensive solar rollouts on stores and distribution centres.
- Marks & Spencer: Another major retailer with a focus on sustainability and rooftop solar.
Largest Investors/Developers
- Lightsource bp: The UK's largest solar developer, active in both ground-mount and rooftop projects.
- Octopus Energy: A leading investor in distributed solar assets, including rooftop portfolios.
- NextEnergy Capital: Major UK-based investor in solar, including commercial rooftop schemes.
- EDF Renewables UK: Active in developing and funding rooftop solar for commercial clients.
Future Outlook
According to accreditation body MCS, there were 21,125 small-scale solar installations in the UK in May 2025, which also recorded a record month for battery energy storage additions. The rooftop solar PV market is set for continued strong growth, driven by policy support, rising energy costs, and occupier demand for sustainable buildings. The government's target of 70 GW by 2035, and the requirement for solar on new homes by 2027 (with the Future Homes Standard becoming mandatory in 2025), will further accelerate adoption. The aim of the Future Homes Standard is to ensure that new homes built from 2025 will produce 75-80% less carbon emissions than homes built under the current Building Regulations. Well-informed landlords, occupiers and investors who understand the legal and market context will be best placed to capitalise on these trends, enhance asset value, and meet evolving expectations.
Conclusion
Rooftop solar PV is reshaping the real estate landscape in England and Wales. For landlords, occupiers, and investors, it offers opportunities for cost savings, enhanced asset value, and compliance with evolving regulations and market expectations. That being said, the rate of installation of solar PV systems on commercial and industrial rooftops in the UK has lagged behind domestic and industrial field scale schemes. This is often because businesses do not have the capital to invest or the band width to understand the complexities of the solar and financing markets and make a sensible economic assessment of the proposed project. Successful adoption requires careful attention to legal, regulatory, financial and contractual details. Early engagement with legal, economic and technical experts, thorough due diligence, and proactive risk management are essential to unlocking the full benefits of rooftop solar PV.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
