How owners and occupiers are collaborating on clean energy solutions

• Capture economic value now: Declining solar costs make onsite renewables viable without subsidies, enhancing asset value while securing tenant energy independence
• Structure win-win financial partnerships: Use cost-sharing, co-investment, or shared savings models to split financial burden and unlock the benefits
• Design for long-term resilience: Size systems for building baseline demand to protect investments through tenant turnover and ensure renewable energy continuity for all occupiers
• Govern collaboratively from the start: Align objectives, establish joint oversight and measurement protocols and communicate effectively
   

As energy access, pricing and security challenges mount, smarter and stronger collaboration between landlords and tenants on clean energy solutions is helping to manage costs and mitigate risk on both sides.

For occupiers, reliable power access is coming under strain amid surging energy demand, aging infrastructure, and supply bottlenecks. More companies are prioritizing reliable energy infrastructure when evaluating potential sites, especially if they have power-intensive or critical operations, according to JLL’s Where Energy Meets Property research. In some markets, such as Silicon Valley, evidence of a power premium is now emerging, with tenants paying significantly more than market rent to occupy sites with sufficient power capacity.

As market dynamics shift, the real estate industry is recognizing that buildings equipped with distributed energy resources (DERs), such as on-site solar, battery storage, and microgrids, can play a vital role in addressing energy challenges. Owners increasingly view a modern, resilient energy setup as a powerful competitive advantage – but the rollout of clean energy solutions is lagging behind the urgency of the challenge.

More collaboration to accelerate solutions and share the benefits between tenants and landlords is needed. Across industries from tech and data centers to healthcare and retail, there are models that make financial and business sense for both parties.

“Onsite clean energy solutions add value beyond sustainability benefits,” says Craig Both, Senior Vice President, Energy Origination, JLL. “Onsite generation or energy storage provides uninterrupted backup power during grid outages, a compelling feature for occupiers requiring operational continuity. Owners in turn can benefit from more competitively positioned properties and potential longer-term value add.”

Selecting the right DER model depends on many different factors including property location and characteristics, tenant energy requirements, and owner resources and business goals. Local regulations and incentives are a key consideration in terms of making projects financially viable.

Meanwhile, technical coordination requires careful planning around installation timing, construction impacts, and integration with existing building systems.

Model 1: Landlord as energy provider
 

A popular approach with logistics, retailers and multi-let or mid-sized office tenants is to invest directly in on-site renewable energy systems—either as rooftop solar, ground-mounted solar or carport structures— which can be combined with battery storage and EV charging. Here, the landlord installs and manages DERs, then sells electricity to occupiers at pre-negotiated rates or incorporates it into the lease.

A global logistics leader, for example, has more than 235 megawatts of on-site solar capacity at its U.S. facilities, and works with tenants to deploy turnkey on-site solar and energy storage solutions through an established program.

Model 2: Landlord as energy facilitator
 

An alternative solution, popular with large corporates and e-commerce retailers on long leases, is for a third-party developer to install, maintain and own renewable energy assets on the property, with the landlord receiving a roof lease fee in return. Depending on where the power flows, two structures apply:

• In the first, the developer sells electricity directly to the occupier via a PPA, delivering below-utility energy costs with no capital outlay
• In the second, the developer sells power (fully or the surplus power after tenant use) to the grid through programs such as community solar, with the landlord collecting a contracted lease payment and the occupier holding no direct energy relationship with the developer. This front-of-the-meter structure is gaining traction across large I&L assets, where roof scale and low on-site energy demand make grid export more commercially attractive than on-site consumption.
   

A major e-commerce occupier has engaged with both structures, selecting between them based on local electricity prices. The client applies a relatively simple logic to their approach, favoring BTM PPAs where utility rates are high enough to make on-site energy cost-competitive, and FTM arrangements where grid export programs offer a stronger return.

Model 3 – Energy-as-a-Service
 

The fast-growing Energy-as-a-Service space overlaps with the landlord as an energy facilitator model, with a third-party financing, owning and operating the system and the building owner paying a service fee. The difference is about who captures the energy value; in leasing, it flows to the developer through market sales while the owner gets real estate income but in EaaS, it flows to the building through energy savings.

Model 4: Tenant-owned and operated DERs
 

A less common approach but one that’s often considered by energy-intensive users such as hyperscalers or advanced manufacturers is for tenants to invest in and operate DERs on the owner’s site. The tenant assumes responsibility for designing, installing and maintaining the system, including navigating local permits, regulations and utility interconnection requirements. Given the capital commitment and operational complexity involved, this model tends to make most sense for owner-occupiers on leases of 20 years+. In exchange for permitting the installation, landlords gain a powerful leasing advantage: the ability to attract and retain large, energy-intensive tenants who need operational control over their energy supply.

Successful collaborations address more than just who pays for what. “Each model comes with unique complexities, risks and return profiles that owners and occupiers must carefully consider,” says Both. “Fortunately, there’s significant flexibility in how landlords and tenants can collaborate on DER projects to ensure incentives are aligned.”

Green lease structures are evolving to facilitate onsite renewable projects, sharing both costs and benefits. Progressive lease terms may now include provisions for cost-sharing on solar installations, shared savings from energy efficiency improvements, and mechanisms for occupiers to contribute to building-level renewable systems.

Once installed, ongoing collaboration and communication between owners and occupiers is key. Measurement and verification protocols ensure both parties can accurately track renewable energy generation, consumption, and associated carbon reductions for their respective reporting requirements. Clear attribution of renewable energy credits prevents double-counting while satisfying each party's sustainability reporting needs.

“Leading collaborations establish joint steering committees with clear decision rights and communication protocols in place from project inception through operations,” says Both.

Other co-investment frameworks are emerging where large occupiers contribute capital toward on-site renewable installations in exchange for preferential energy rates or green energy credits. This reduces owners' financial burden while giving occupiers greater control over their energy sourcing.

One of owners' biggest concerns is tenant turnover—what happens to a renewable system if the occupier who wanted it moves out? “Successful projects address this by sizing systems for the building's baseline energy needs rather than tailoring them to a specific tenant,” says Both “Leases can also require incoming tenants to take over power purchase agreements, protecting the owner's investment.”

For landlords who are hesitant about putting solar on rooftops, the rapidly expanding carport solar market offers a viable alternative. “Carport solar can be particularly attractive as it adds tangible amenities for occupiers while generating substantial energy,” says Both.

As energy security becomes an enduring business concern rather than a temporary challenge, real estate's role in providing reliable power will only grow more critical.

Declining technology costs have made onsite solar economically compelling even without subsidies in many markets. With total electricity use in the U.S. projected to grow 25% by 2030, owners and occupiers will need to team up to create partnerships and operationalize models that deliver clean and reliable energy supplies.

“Successful onsite renewable collaborations start with aligned objectives, transparent financial modeling, and comprehensive agreements that create win-win economics,” says Both. “And both sides must navigate the tricky reality that energy systems last 25+ years while leases typically don't.

“But these tough conversations are worth it. Solar and energy storage is no longer just a nice-to-have sustainability feature – it’s increasingly a strategic asset that supports resilient, future-ready real estate and operations.”