Commercial landlords turning rooftops into ‘profit machines’ through solar installations

Healthcare giant Bupa and ASX-listed fund manager Centuria Capital are both embracing solar energy solutions across their assets

What A growing number of commercial landlords are leasing out their rooftop space to solar energy providers

Why They earn a rental stream while their tenants reduce their energy bills

What next Agile energy founder Jack Kapoor says the increasing use of electric vehicles in company fleets will make solar an imperative for landlords

A growing number of commercial landlords – both big and small – are leasing out rooftops to renewable energy providers in a move that reduces power bills for their tenants, creates more sustainable buildings and raises the value of their assets.

Among those benefiting is Agile Energy, a company backed by the federal government’s Clean Energy Finance Corp and private equity firm Five V.

Agile leases roof space on top of office towers, warehouses, malls, self-storage facilities and aged care villages and installs solar energy systems, which it manages and operates.

Then, through long-term power purchase agreements, the company sells the energy back to the building’s tenants, locking in lower power bills.

Landlords earn an income stream from the rooftop rent while also increasing the value of their building by making it more sustainable and appealing to a wider pool of ESG-conscious tenants.

Among those looking to tap into cheaper and more sustainable energy generation is healthcare giant Bupa, which has inked a deal with Agile Energy to acquire its 4MW of solar assets that power 40 of its aged care villages in Queensland, NSW, Victoria and SA.

Agile will upgrade these solar assets to make them more efficient and then sell the energy back to the aged care communities at a lower cost through a longterm power purchase agreement.

Founder Jack Kapoor said Agile operates solar systems across 1,500 sites and delivers energy that is 30 to 40% cheaper to a range of clients, many of whom are ASX-listed.

“Over the past six-12 months, these companies have realised they are missing out on the opportunity to rent their roofs out and earn extra cash,” Kapoor told Green Street News.

“They also gain an extra tenant, which diversifies their risk, which can assist when refinancing their loan.

“And we are putting federal government money back into the economy that is driving commercial landlords to become greener,” he said.

He warned that with the increasing electrification of company vehicle fleets, landlords unable to lock in cheaper solar power could be hit hard.

“EVs will put more and more strain on to our coal stations to extract more energy. If you don’t have the juice [on your roof] you will have to buy energy from the grid and pay through the nose,” Kapoor said.

Solar systems installed and operated by Agile Energy range from 100 kilowatts to 5MW (5000kW). A solar installation on a house typically generates 6-10kW of power.

Major landlords realising the benefits

Clients of Agile include one of the country’s largest building material manufacturers, Brickworks; student accommodation developer and operator Scape; CBRE; and ASX-listed property fund manager Centuria Capital.

Centuria is undertaking a national solar rollout across its industrial, office, retail, healthcare and agricultural assets within its $20.6bn portfolio. To date, 2MW of solar power has been installed by Agile at a cost (to Agile) of over $3m.

“Centuria is committed to achieving zero scope 2 emissions by 2028 across Centuria Office REIT’s portfolio and Centuria Industrial REIT’s portfolio, and by 2035 across the Centuria Capital Group portfolio,” Grant Nichols, Centuria head

of listed funds, told Green Street News.

“A key part of our strategy to achieve these scope 2 targets is the installation of solar power systems, alongside the continued assessment of opportunities to complement our existing solar generation.”

Agile is by no means the only energy company offering solar solutions for large landlords.

In 2023, industrial property giant ESR partnered with solar energy specials Solar Bay to roll out solar farms on warehouse rooftops that could by 2023 generate 50MW of solar power, 300MW hours of battery storage and power electric vehicle charging.

According to Agile Energy, solar and battery systems can cut grid electricity costs by 20 to 50%, saving $50,000 to $300,000 annually for commercial sites.

“This isn’t about being green,” Kapoor said. “This is about businesses using energy infrastructure to generate real cash flow, automatically, around the clock, even while they’re asleep.”

With major developers like Cbus Property developing office buildings like 435 Bourke St in Melbourne that will generate up to 20% of their energy needs through solar panels built into the facade, Kapoor said Agile is looking at

emerging technologies.

They include solar panels that can be embedded into carpark shades.

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