Can Businesses Claim Depreciation on Leased Rooftops?
You can own the solar plant even if you don't own the building it's on, but it takes a few specific things to get right.
Short answer: Yes, a business can install and own a solar system on a rented warehouse, office, or industrial shed, and still claim Section 32 accelerated depreciation, but the asset ownership and the property ownership are separate things that both need to be handled correctly. You need to capitalize the solar plant in your own company's fixed asset register (not the landlord's), obtain a formal NOC from the landlord, and sort out the DISCOM net metering connection, which is often complicated by the electricity connection being in the landlord's name.
Why ownership of the asset, not the building, is what matters
Section 32 depreciation, the 40% accelerated rate covered in our tax shield calculator and our 180-day rule guide, is based on who owns and uses the asset for business purposes, not who owns the real estate it sits on. A business operating from a rented warehouse or IT park can absolutely own the solar plant itself, install it on the roof, and claim the depreciation, this is a routine, legitimate structure. But three specific things need to be in order.
1. Capitalize the asset correctly
The solar plant needs to be recorded as a fixed asset in your business's own books, not the landlord's, and treated as your company's capital expenditure. This is what establishes the ownership basis the depreciation claim relies on.
2. Get a formal landlord NOC
A written No Objection Certificate from the property owner, permitting installation and, ideally, addressing what happens to the asset at lease end (removal, transfer, or continued ownership), protects both parties and is standard due diligence before installing owned equipment on someone else's roof.
3. Sort out the net metering connection
This is where things most commonly get complicated: the electricity connection for a rented commercial property is frequently in the landlord's name, not the tenant business's. Net metering and subsidy paperwork, where applicable, are tied to the connection holder, so this needs to be resolved directly with the landlord and PuVVNL before installation, not discovered afterward. Depending on your lease structure, this can mean the landlord being a co-signatory on net metering paperwork, or a separate commercial arrangement between landlord and tenant about how the solar generation and bill savings are shared.
Get this right before you install, not after
None of this is unusual or disqualifying, businesses install owned solar on leased commercial real estate regularly. But because it touches your fixed asset register, your landlord relationship, and DISCOM paperwork all at once, it's worth structuring properly with your CA and your landlord before signing an installation contract, not retrofitting the paperwork after the panels are up.
Operating from a leased commercial property?
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