New Treasury Guidance Narrows the Window for Rooftop Solar Value in CRE

By Shaun Keegan for Market Share Blog | October 30, 2025

Once seen as a sustainability play, rooftop solar is now a financial strategy for commercial real estate owners. By leasing unused rooftop space, owners can generate new, long-term revenue streams and increase asset value, all without capital expenditure. With federal incentives in flux and state programs expanding, timing has never been more critical to lock in peak rooftop solar lease rates.

Recent guidance from the Department of the Treasury, coupled with the One Big Beautiful Bill Act, has shortened the window to claim federal incentives on rooftop solar. Commercial Real Estate (CRE) owners must now move quickly to capture the full 30% Investment Tax Credit (ITC) and secure financial benefits, while delays could mean lower lease rates and diminished returns.

• Through Dec. 31, 2025, projects qualify for the full 30% ITC with no restrictions, keeping lease rates at their peak.
• From Jan. 1 to July 4, 2026, new sourcing restrictions on solar equipment will take effect, likely raising project costs and reducing lease payments.
• After July 4, 2026, new projects will no longer be eligible for the ITC.

The primary model to pursue ahead of the ITC sunset is Front-of-the-Meter (FTM) solar, which allows property owners to monetize rooftop space through lease payments while avoiding the complexities of purchasing the power produced. While rooftop solar will remain viable after the full sunset of the ITC, lease rates are expected to decline.

CRE owners are working with proven development partners to capture the full value of the ITC, finalizing solar plans even for buildings still in development. Projects that qualify for the ITC generate higher lease payments for owners, making now the optimal time to act. To maximize value, developers are structuring portfolio-wide partnerships that span multiple properties and secure current incentives.