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How to Run an Initial Solar Assessment on Your CRE Portfolio

February 4, 2025

Overview

Rooftop solar leases present a valuable opportunity to increase NOI and contribute to sustainability goals. However, not every property is a suitable candidate for a solar installation.

In this blog, we explore the key considerations for identifying ideal locations for solar projects, assessing roof conditions, and selecting the right partner to ensure the success of your solar initiative. We’ll also discuss how fund structures and stakeholder interests can influence your decision-making, helping you focus on the most viable opportunities in your portfolio.

Content

  • Ideal Locations
  • Roof Conditions
  • Partner Selection
  • Real Estate Fund Structure
  • Considering Stakeholders

Ideal Locations

States

Solar programs and incentives vary significantly by state, making it crucial to focus on regions with robust policies and favorable conditions. Additionally, the support for solar grid interconnection by Electric Distribution Companies (EDCs) varies by region due to a combination of regulatory, financial, and logistical factors.  

In many states, behind-the-meter solar (BTM) is viable, but as we’ve mentioned in previous posts, BTM is more complex and less lucrative to real estate owners. There are, however, a growing number of states where front-of-the-meter (FTM) solar is viable. These states include New Jersey, New York, Maryland, Pennsylvania, Massachusetts, Illinois, and Minnesota.

Suburban and industrial areas are ideal.

Local jurisdiction and population density matters just as much as state policies when assessing your portfolio for solar projects. Suburban and industrial areas are ideal, offering large, unobstructed rooftop spaces and often situated near communities that can benefit from community solar programs. Urban locations, while potentially promising, often present challenges like tall surrounding buildings shading adjacent rooftops. Conversely, rural areas may have fewer obstructions but often lack nearby communities to benefit from the community solar generated and can face hurdles with interconnection, as electricity transmission lines may be distant or lack sufficient capacity. Balancing these factors helps identify the most promising sites in your portfolio.

Roof Conditions

Roof Size
>30,000 square feet.

Ideally, rooftops should exceed 30,000 square feet to accommodate the scale necessary for an economically viable solar installation. While smaller rooftops can accommodate solar, larger rooftops provide ample space for a high-capacity solar array and reduce installation costs per watt. For industrial and commercial real estate portfolios, prioritizing properties with significant rooftop square footage helps to maximize the financial benefits of the rooftop lease.

Roof Age

Roofs that are less than 7 years old, or in need of replacement, are ideal for solar.  

Roof age and condition are important considerations during a solar site assessment. Roofs under seven years old tend to be preferred due to their remaining lifespan, which aligns well with the typical 20-year term of a solar lease. However, properties with aging or mid-life roofs are not disqualified. In fact, Solar Landscape has worked with clients to coordinate roof replacements, incorporating these costs into the overall project plan. For properties in need of a roof replacement, roof lease payments are often used to fund the replacement, creating a win-win scenario for CRE owners.

Roof Type

Pitched or flat roofs with limited rooftop units (RTUs). 

The type of roof also plays a key role in determining solar feasibility. Both flat and pitched roofs are viable for solar projects, but flat roofs are often preferred due to easier installation and maintenance access. Properties no higher than 3-4 floors are generally more suitable for solar installations, as they simplify logistics and reduce costs associated with equipment like cranes or scaffolding, needed to access the roof.

Furthermore, properties with minimal RTUs or other obstructions are ideal, as these features can limit available space for panels and create shading issues. A clean, unobstructed roof surface maximizes the efficiency and output of the solar system, making the project more feasible.

Partner Selection

Solar Landscape is a full-service, vertically integrated company. That means the company originates, develops, finances, installs, owns, and operates the solar array systems, ensuring that key services—such as interconnection with the grid, assessing grid capacity and state incentives, conducting thorough structural evaluations of the roof, and proactive operations and maintenance—are handled properly. These steps are vital for ensuring the system operates efficiently and meets all regulatory requirements. By working with a vertically integrated developer like us, you work with one partner through the entire project lifecycle and gain the advantage of a seamless, streamlined process. With in-house expertise across design, engineering, installation, and operations, we reduce potential delays, optimize revenue potential, and provide a more cohesive approach to project execution. Our experience also allows us to anticipate and address challenges proactively, giving you peace of mind throughout the entire project lifecycle.

Real Estate Fund Structure

The structure of your real estate fund significantly influences rooftop solar lease decisions. Private equity (PE) firms often manage multiple funds, each backed by different shareholders or stakeholders with varying priorities. While some funds focus solely on maximizing revenue, others must balance financial performance with sustainability goals. Integrating a rooftop solar lease can often satisfy both objectives by delivering long-term savings and supporting decarbonization commitments.

Stakeholder Considerations

Before pursuing a rooftop solar project, it’s essential to understand the various stakeholder interests and concerns that could impact the viability of an asset. For instance, if the property is held in a joint venture (JV) partnership, you’ll need to consider whether all partners are aligned on the project, as some may have differing goals or concerns about sustainability or financial returns. It’s also important to assess if any stakeholders are solar-averse, as their opposition could delay or prevent the project. Additionally, consider tenant roof rights—if tenants have control over the roof space, their approval may be required before moving forward with a solar installation. By outlining and addressing these stakeholder considerations early on, you can identify any potential roadblocks and focus on the assets most likely to be viable opportunities for solar projects.

Streamline Your Solar Assessment with Expert Support

By understanding the factors that make a property suitable for rooftop solar leases—such as location, roof size, age, and type—you can make informed decisions about which assets in your portfolio are the best candidates for solar installations. Partnering with an experienced, vertically integrated developer like Solar Landscape ensures that every step of the process is handled efficiently and effectively, from grid interconnection to ongoing management. Additionally, taking into account the fund structure and stakeholder considerations will help you navigate any potential challenges and move forward with projects that align with both financial and sustainability goals.
 
Connect with Solar Landscape today to explore the solar potential of your portfolio and take advantage of the growing opportunity of onsite clean energy.