Landlords can move faster than government

Commercial occupiers face rising energy costs with no price cap to protect them, and the Prime Minister's target for fixing the problem is ten years away. Landlords do not have to wait. Working with their occupiers, they can put solar on suitable roofs, add battery storage where the numbers work, and supply that power for less than the grid. The occupier saves now. The landlord earns a return and a stronger case at lease end.

Businesses carry the full market risk

The Ofgem price cap protects households only. Businesses buy at market rates: flexible tariffs feel wholesale moves within weeks, and fixed deals meet them at renewal. The Federation of Small Businesses has told the Guardian that small firms get none of the protections available to households, and Make UK says manufacturers face the highest industrial power prices in Europe.

Even capped household bills rose 4% on 1 October, with Cornwall Insight forecasting a further 16% in January, Reuters reported. The driver is gas: Energy UK points to wholesale prices at a three-year high since the Middle East conflict disrupted supply.

The irony is that renewables are holding bills down. At the time of writing, 64.3% of the UK grid supply came from renewables. Every unit of wind and solar displaces gas-fired power, and generators on contracts for difference pay money back when wholesale prices exceed their agreed price. The problem is not too much renewable power, but too little to stop gas setting the price.

Government cannot fix this quickly

In his first conference speech as Prime Minister, Andy Burnham set the target:

Within 10 years, I want those costs to be in line with our neighbours.

Andy Burnham, Labour Party Conference, 29 September 2026

He has asked for faster progress on breaking the link between power and gas prices, and announced Great British Grid to speed up connections. The immediate help, a six-month VAT cut on domestic electricity and some small business bills (Full Fact), will pass most commercial occupiers by.

This is the second gas shock in four years, and the second temporary fix. Successive governments have subsidised high energy costs rather than solved them. New generation, grid reinforcement and market reform take years, whoever is in Downing Street.

How it works

The landlord funds, owns and maintains a rooftop solar system. The occupier buys the power under a power purchase agreement (PPA) at a price below its supply tariff, with no capital outlay. Power generated and used on site avoids the network and policy charges that make up a large part of a commercial bill.

• The occupier gets cheaper, more predictable power and lower reported emissions.
• The landlord earns a return on an idle roof and a better-performing building.

Storage. Solar peaks at midday; many occupiers' demand does not. A battery shifts surplus power to later in the day, when grid power is dearest, and can trim peak charges. It suits sites with evening or sharply peaking demand, and should be tested against half-hourly data.

The roof. On most single-let buildings the roof sits within the tenant's demise, so the landlord needs the occupier's agreement and a lease variation. That is easier than it sounds, because the occupier is the one who saves. Where the landlord retains the roof, as on many multi-let estates, projects move faster.

What has to be right. A roof that will outlast the panels and carry their weight, a network that will accept any export, and enough daytime demand to use most of the output.

Lower costs, stronger renewals

At lease end occupiers weigh the total cost of occupation: rent, rates, service charge and energy. A landlord that has cut the energy line has a stronger case. A void brings empty rates, unrecovered service charge, letting costs and incentives, so keeping a good occupier is almost always cheaper. Aligning the PPA term with the lease, with renewal provisions, makes the saving part of the reason to stay.

Why now

Occupiers are renewing supply contracts into a high market, and every month of delay is a month at grid prices. Surveys, network applications, lease and PPA documents and installation all take time.

Start with buildings that have large, sound roofs and occupiers who use most of their power in daylight: logistics, light industrial, retail warehousing, cold storage. Twelve months of electricity bills is enough for a first view of the saving, the investment and the return.

Syzygy has advised commercial landlords on on-site renewables since 2010 and manages more than 250 energy assets across the UK and Europe. If you would like us to look at your portfolio, get in touch.

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