Solar solutions for healthcare estates

How can health estate managers deliver critical services while lowering operational emissions and costs? NHS England spends approximately £1.4 bn on energy, a figure which has doubled since 20191 — demonstrating the urgency of the challenge estate managers face.

There are rays of light, however. The introduction of new and refreshed sustainability-minded energy procurement strategies, have resulted in the broader adoption of solar photovoltaic (solar PV) technology, providing a buffer against unpredictable power pricing while helping estates adhere to environmental legislation. Its true potential, however, remains underdeveloped within the healthcare industry.

Time to act

Beyond the lighting and heating, ventilation and air conditioning (HVAC) demand, many facilities such as accident and emergency (A&E) departments and intensive care units, play host to 24/7 operations and need power for specialised, lifesaving equipment. Compounding this is the fact that the UK has faced some of the highest electricity prices in Europe. Demand is constant and systems that produce affordable on-site clean energy are increasingly attractive to healthcare estate managers.

The legislative landscape poses further food for thought. From 2027, non-domestic buildings that do not meet band C on their Energy Performance Certificate (EPC) can no longer be let, with this expected to rise to band B by 2030.2 Plans have also been proposed to reduce the validity period of existing EPCs, incentivising estate managers to look at clean energy generation technologies including solar PV.

Such reforms ensure stakeholders are equipped with accurate information and encourage them to consider measures to improve the energy efficiency of their properties. The proposed reforms create a strong case for the adoption of on-site renewable technologies such as solar PV as a measure for improving the EPC rating of buildings and ensuring compliance with energy efficiency legislation.

Defying leasehold challenges

Despite this appeal, barriers remain. Foremost among these is the complexity of leasehold agreements. NHS, private healthcare and charity-funded estates often include leased buildings where installing solar panels might require the landlord’s permission, followed by negotiations around asset ownership and maintenance responsibilities.

A license to alter, grants tenants permission to make alterations to the property within which they operate, this could include the installation of solar panels on the roof of the building. When determining the details of the license, both parties need to clearly define who is responsible for the ownership and maintenance of the solar panels. In most cases the responsible party will be whoever is funding the installation. If the tenant bears the cost of the initial installation, they will retain ownership of that system until the end of the lease or the end of the system’s life. As such, they will likely also be responsible for the ongoing maintenance of the solar panels, removing risk from the landlord. However, deciding which party is responsible for any potential damage to the building owing to the installation and operation of the solar panels can complicate negotiations.

This, combined with concerns over high upfront costs, underlines the need for flexible financial models to allow for solar installation in hospitals and healthcare facilities. And we are seeing more ownership models becoming available that suit individual leasehold agreements from a financial and legal standpoint. These options are covered in detail in, ‘Solar PV On Commercial Leasehold Properties’.3

One example of these ownership models is where tenants take on responsibility — installing, maintaining and benefitting from the solar array directly by selling additional energy back to the grid. This revenue generation could outweigh the costs of maintenance — a solution to a barrier that could disincentivise estate managers from investing in solar.

Alternatively, landlords can own and maintain the panels. As well as exporting energy back to the grid, they may sell it at below-market rates to the tenant via a Power Purchase Agreement (PPA). A PPA may appeal to healthcare providers operating on a tight budget and without the capex budget to meet the upfront costs of such installations.

A third option could be that a third party, also known as a ‘solar tenant’, develops the solar array on the roof of the building by leasing the roof space from the landlord, before selling the energy it produces to the occupant at below-market cost. This removes potential obligations for the landlord and the tenant — as neither is responsible for the array’s maintenance or eventual removal. These arrangements provide an option for either the landlord or tenant to purchase and take ownership of the system at a later date.

Adhering to sustainability legislation

Implementing solar PV allows healthcare estate managers to confidently demonstrate their commitment to lowering their carbon footprint in line with Net Zero goals.

The sustainability agenda is reflected in new and emerging legislation. The Procurement Act 2023, for instance, changed public procurement rules and updated the consideration criteria. The Act moved from judging bids on the Most Economically Attractive Tender (MEAT) approach to Most Attractive Tender (MAT). According to UK government this change made “clear that the focus for awarding contracts does not have to be the lowest price or that price/cost must always be weighted higher than non-price factors.”4 In doing so, contracts may be determined on the basis of a wide range of factors including “price and quality criteria in addition to wider social and environmental issues.”4 For healthcare estate managers, this means their focus can shift to prioritising sustainable operations which they know will not have a negative impact on any external procurement decisions.

This must all be considered within the UK’s wider decarbonisation plans. The country’s Clean Power 2030 Action Plan aims to unlock the solar generating capacity of the UK and achieve 45GW of installed solar PV by 2030.5 As acknowledged by the Sunak administration in 2023, a significant proportion of this capacity could come from the untapped potential of roof space of non-domestic properties, including healthcare estates. Through conversations with the sector, we’re already seeing healthcare estates maxing out their rooftop potential, resulting in new solar avenues — such as carports — being explored.

Cost consideration

For the benefits of this solar potential to be realised, policy must keep pace with ambition. We are steadily seeing this on the ground. For instance, the Climate Change Levy (CCL)6 is an environmental tax applied to non-domestic energy consumers to encourage more sustainable operations, it can markedly affect financial bottom lines and by association, the ability to provide best possible care. By entering into voluntary agreements in line with the Climate Change Act (CCA),7 more energy-intensive organisations can reduce the amount they owe through the CCL. By reducing their carbon emissions, these organisations can receive significant financial relief against their previous obligations. Given this, the strategic case for investing in solar PV technologies is further underlined for healthcare estate managers.

Solar PV has an exceptionally attractive return on investment (ROI) for estate managers. The average ROI for an estimated 100kWp roof array is 25.84% meaning the investment would pay for itself in just four years.8 The more solar PVs an estate or wider trust installs, the greater the ROI. Take a 468kWP project — this installation would have an ROI of 67.17% and would take less than two years to pay for itself.

Promisingly, monetary incentives and interventions are being made by UK government to encourage the healthcare sector to adopt solar PV. Great British Energy (GBE) has continued its rollout of solar to cut energy bills for public services, including panels for 70 more NHS sites in 2025. As part of an expanded scheme to fund solar panels for NHS sites, military sites and schools, 34 NHS trusts across England, including 10 already in the programme, will receive funding from GBE for solar panels.

Health estate managers can realise significant financial, operational and environment benefits by opting to expand their solar portfolios. This is a sector where understanding and intent are maturing quickly among managers — roof-mounted solar is the standard for many estates, the next step for these estates is to invest in solar carports, electric vehicle charging, and ground-mount arrays to cut costs and carbon.

Every quarter that passes without action is a quarter spent over-paying for energy, over-emitting carbon and under-delivering against future regulation. The legislative, financial and technical stars are already aligned; what remains is execution. Healthcare estates that choose solar today will set the pace for the sector — cutting avoidable spend, securing supply, and hard-wiring compliance years ahead of schedule. The organisations that act will become the industry leading reference points for everyone else.

References

1 Hannam-Seymour H. Rising energy costs and their impact on UK businesses. BP Consulting. 2024 Oct 23. Available from: https://bpconsulting.co.uk/rising-energy-costs-and-impact-uk-businesses.

2 UK Parliament. Procurement Act 2023. UK Government; 2023. Available from: https://www.legislation.gov.uk/ukpga/2023/54/contents.

3 https://www.renenergy.co.uk/leasehold.

4 UK Government. Module 7: Assessment and award of contracts. UK Government; 2024. Available from: https://www.gov.uk/government/publications/the-official-procurement-act-2023-e-learning/module-7-assessment-and-award-of-contracts.

5 UK Government. Clean Power 2030 Action Plan. UK Government; 2024. Available from: https://www.gov.uk/government/publications/clean-power-2030-action-plan.

6 UK Government. Climate Change Levy rates. UK Government. Available from: https://www.gov.uk/guidance/climate-change-levy-rates#climate-change-levy.

7 UK Parliament. Climate Change Act 2008. 2008 c 27. UK Government; 2008. Available from: https://www.legislation.gov.uk/ukpga/2008/27/contents.

8 Williams, R. Howlett, J. Davies, D. Solar PV on commercial leasehold properties. 2025. Available from: https://workdrive.zohopublic.eu/external/1f00ca83b3a9c0904942e42cb5bc1cd1aae5532ae524691610c3df7f605528db.