JLL Study: Valuing the rooftop opportunity

JLL Study: Valuing the rooftop opportunity

How rooftop solar leases translate to value in industrial & logistics real estate.

Key highlights

This insight explores how front-of-the-meter (FTM) commercial rooftop solar is creating new value for asset owners across the U.S. industrial and logistics (I&L) sector.

• In analyzed case studies, a contracted FTM rooftop lease delivered value uplifts of around 4%. Across owners, solar developers and occupiers, interviews point to a model that has matured from “should we engage” to “how is the value recognized.” Institutional appraisal practice has settled on a discounted cash flow as the most viable methodology in the U.S. today.
• FTM rooftop solar offers a practical model to monetize that potential at full roof scale. FTM allows I&L owners to lease all or a portion of their roof to a solar developer who sells the generated power to the grid, creating a long-term contracted income stream without capital outlay or operational involvement. Among the top 30 U.S. I&L owners, 79% have already adopted the model.
• The opportunity for solar is large and underutilized. Existing I&L buildings of 100,000+ square feet in the U.S. contain approximately 7.8 billion square feet of commercially suitable solar rooftop area, with the technical potential to generate 175 TWh of solar electricity annually — enough to power roughly 18 million households.

Findings draw on interviews with industrial owners, solar developers, occupiers and market specialists and include valuation case studies incorporating JLL’s CRE market data modeled against solar rooftop leasing data provided by commercial solar developer Solar Landscape.

Read the full study here.

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