Does Your Commercial Property Need Solar?

A Landlord’s Cost-Benefit Guide:

Most commercial landlords weighing up solar start in the same position: a roof that could carry panels, a quote or two in hand, and no obvious way to tell whether the numbers make sense.

With the grid more stable than it has been in years, the case for solar now rests less on keeping the lights on and more on what electricity costs. Eskom raised tariffs by 8.76% for direct customers in April 2026 and 9.01% for municipal customers in July, with a further 8.83% already approved for April 2027.

“Two or three years ago these conversations started with load shedding. Now they start with the electricity bill,” says Sean Grove, Business Growth & Commercial Manager at Rawson Commercial. “But that doesn’t mean landlords can simply put solar on the roof and expect the numbers to work. It’s a significant investment, and getting the best return means understanding what the property and its tenants actually need, and then weighing that against the cost of an appropriate system.”

So, what does that calculation look like, and how can landlords tell whether they’re investing in the right solution?

Start with the cost

“There is no standard price for commercial solar because there is no standard commercial property,” says Grove. “An office building, retail centre and warehouse can have very different consumption patterns, operating hours and backup requirements, all of which affect the type and size of system required.”

Commercial installers currently quote in the region of R12,000 to R18,000 per installed kWp, although actual costs vary significantly depending on scale, equipment, roof and electrical infrastructure and installation complexity

The biggest single variable is battery storage. A grid-tied PV system reduces the electricity a property buys during daylight hours. Adding batteries provides stored power after hours or during an outage, but can add substantially to the upfront cost, particularly where tenants need extended backup or have high power demands.

Quotes also differ in what they leave out. Municipal registration of the system as small-scale embedded generation, an electrical certificate of compliance, a structural assessment of the roof and any resulting insurance adjustments are all genuine costs, and not every proposal includes them. Establishing what sits inside the price and what will be invoiced later is the first step in comparing options properly.

Now calculate the return

The most measurable return comes from the electricity the property no longer buys. Sizing that means comparing projected annual generation against the property’s consumption profile and the tariff it pays.

“Tariff structure matters as much as volume,” says Grove. “Many commercial properties are billed on time-of-use tariffs, where a unit drawn during a weekday peak period can cost several times the same unit drawn overnight. A property whose demand peaks through the middle of the day therefore stands to gain considerably more from solar than one drawing most of its power after dark, even where the two consume a similar amount overall.”

Landlords should also consider what solar could do for the property’s leasing performance. For tenants whose operations depend on reliable power, or businesses working towards sustainability targets, energy resilience can influence both property choice and retention.

That doesn’t mean landlords should assume solar will automatically justify a higher rental.

“A logistics operation running refrigeration, a retailer trading through an outage and an office tenant meeting sustainability targets may all value solar differently,” says Grove. “What matters is understanding your tenant market, and whether what they value translates into measurable value for the property.”

Recent leasing experience can help answer that question. Are tenants asking about backup power? Are competing properties offering it? Has energy resilience affected negotiations or retention? Those signals help put a realistic value on benefits beyond electricity savings.

Choose the right investment structure

Landlords don’t necessarily need to fund solar upfront. Options include outright purchase, asset finance, rental or rent-to-own arrangements and third-party funded Power Purchase Agreements (PPAs), where the provider typically owns and maintains the system and sells the electricity it generates.

Each option changes the balance between upfront cost, ownership and long-term return, and each needs to align with both the lease and how long the landlord intends to hold the property.

Ownership deserves particular attention where a third party funds the system. Equipment permanently affixed to a building can, in law, become part of that building, so the agreement needs to set out what happens to the system if the property is sold or the arrangement ends early.

“You need clarity on who pays, who benefits and what happens if the tenant leaves or the property is sold,” says Grove. “The comparison that counts is total cost and return over the life of the arrangement, not just what you pay on day one.”

Tax will also affect the calculation. The temporary Section 12BA incentive, which allowed a 125% upfront deduction on qualifying renewable-energy assets, ended for assets brought into use after 28 February 2025. The permanent Section 12B allowance remains available: qualifying solar PV systems of up to 1 MW may qualify for a 100% deduction in the first year, while larger qualifying installations are generally written off over three years at 50%, 30% and 20%.

“Landlords should get property-specific advice here,” says Grove, “because Section 23A can limit the deduction available to a lessor depending on how the equipment and the lease are structured.”

Five questions your proposal should answer

Once the options are on the table, Grove recommends bringing the decision back to five questions:

1. Usage: How much electricity does the property use, and at what times of day?
2. Objective: Are you primarily trying to cut electricity costs, provide backup power, improve leasing competitiveness or achieve a combination of these?
3. Cost: What is the complete cost of the proposed solution, including batteries, finance, compliance and ongoing costs where applicable?
4. Return: What are the realistic annual electricity savings, and is there evidence of additional value through tenant attraction or retention?
5. Time: How does the expected return compare with existing lease terms and the landlord’s intended holding period for the property?

“Once you have those answers, you can compare solar with any other capital improvement competing for investment,” says Grove. “That’s when it becomes a commercial property decision rather than simply an energy decision.”

Before you commit

A solar investment is only as good as the information behind it. Landlords should have the property professionally assessed and get comparable proposals from reputable commercial solar providers, with projected generation, savings, system specifications and ongoing costs clearly set out.

“You want to be confident that the solution has been designed around the property rather than around a product someone wants to sell you,” says Grove. “Do the homework upfront, compare the options properly and you’re far more likely to end up with an investment that delivers what you expect from it.”