June 10, 2020
Are you considering leasing your roof for solar panels?
In certain markets the economics of having a third-party such as YSG Solar install solar panels on your roof, sell the electricity to the local power company, and lease your roof space to host the solar equipment, makes economic sense.
A solar roof lease can be a very uncommon instrument for traditional landlords. Roof lease deals require a significant amount of time and energy to properly prepare and execute. Solar lease agreements tend to be one-sided and geared towards the solar development company. There is certain language involved, and obligations that the developer will require of the party leasing their roof space—due to the complexities involved with tax equity.
Tax equity is an institutional investor that makes a passive investment into the project to monetize the tax credits. Due to recapture regulations, and risks associated with these types of investments, the entire deal structure can be highly regulated.
Municipalities and/or large industrial parties tend to be the best parties to enter into a roof lease agreement.
What is the minimum roof size that you can lease for a solar farm?
The minimum size roof that is leasable is 50,000 square feet—this is a general rule of thumb implemented by YSG Solar.
In what markets is it popular to lease your roof?
ConEdison territory in Westchester.
ConEdison territory in New York City—all five boroughs.
National Grid territory across the entire state of Rhode Island.
National Grid territory across the entire state of Massachusetts.
Eversource territory across the entire state of Massachusetts.
As an example, we can study the roof lease agreement made available from IREC that was issued by the Town of Cohasset, Massachusetts.
Download a sample solar roof lease agreement here.
If you’re interested in a solar roof lease then reach out today. YSG will work with you throughout the entire process, constructing the ideal project for your needs. Send us an email, or call at 212.389.9215 to get started.
YSG Solar is a project development vehicle responsible for commoditizing energy infrastructure projects. We work with long-term owners and operators to provide clean energy assets with stable, predictable cash flows. YSG's market focus is distributed generation and utility-scale projects located within North America.
Sources:
https://www.ysgsolar.com/sites/default/files/cohasset-ma-draft-site-lease-rooftop.pdf