Investing in sustainability: Solar power on commercial buildings in Poland

With investment in Poland continuing unabated and ESG issues maintaining their grip on business, foreign investors are spending more time looking at the infrastructural sustainability of investment opportunities in Central Europe. The installation of solar panels on the roofs of warehouses, factories, logistics facilities, shopping malls as well as office buildings seems to be a natural way of switching to green energy for the real estate and construction market. Lawmakers in Poland are improving the legal environment to make it much easier for investors to develop such green-oriented projects.

Simplified Zoning Requirements 

A major reform of Poland’s planning and zoning regulations was adopted in 2023. Some of the key changes related to renewable energy sources, including those that can be installed on buildings. As a rule, small solar installations on buildings do not require a local master plan (LMP). 

Furthermore, after the reform, if the existing LMP permits for the location of a building within a given area, it automatically allows for the installation and use of solar panels, unless it is explicitly prohibited by a given LMP.

Moreover, solar panels on the roofs or facades of buildings no longer require environmental permits or environmental reports, regardless of the area in which they are located.

Easier Building Permission

With the focus clearly on renewable energy sources, investors can sleep easy as according to Poland’s Construction Law, building permits are not required for the installation of solar panels up to 150 kW, and up to 3 metres above the roof. The installation of solar panels of more than 6.5 kW needs to be consulted with a fire protection expert and only a notification sent to the fire protection authority. 

Connecting to the Grid

Two key issues are crucial for investors: (i) whether the solar panels require the consent of local distribution grid operators, and (ii) the regulatory requirements relating to operating solar panels, in particular obtaining an energy license.

Three types of photovoltaic systems are distinguished:

1. micro – total installed electrical capacity of not more than 50 kW, connected to an electric grid with a rated voltage of less than 110 kV;
   
   
2. small – total installed electrical capacity of more than 50 kW and not more than 1 MW, connected to an electric grid with a rated voltage lower than 110 kV; and 
   
   
3. large – larger than the above.

As a rule, the investor needs to apply to the local grid operator for grid connection conditions permitting new solar panels and their connection, if they are intended to be connected to the internal electricity system of the building and to the external distribution system. 

However, for micro systems the procedure is simplified: the investor needs only notify the local grid operator and no connection fee will be charged. This procedure applies if:

1. the investor is the end user already connected to the grid; and 
   
   
2. the installed capacity is no greater than that the connection capacity specified in the already issued connection conditions.

In each case, appropriate safety systems and a two-way metering and billing device needs to be installed. 

No License Required 

The production of electricity in micro and small systems does not require an ‘electricity generation license’ as is the case with large ones. However, small systems should be registered with the Polish Energy Regulatory Office.

Optimalisation and Green Leases

Due to the global spike in electricity prices, as well as the scaling up of ESG requirements, end users are putting pressure on investors, venture capitalists, and property managers to secure stable electricity prices, and an ever higher share of green energy in the entire volume of electricity consumed in their buildings. 

Apart from entering into various power purchase agreements, investors may consider investing in their own green energy sources located on their own land and/or nearby land connected through a direct line. 

In case of tenants, green lease agreements or 'solar as a service’ agreements can be structured depending on the type of building, or the number of tenants. There are a variety of possible options to choose from. This might include monthly subscriptions for the use of the solar panels on buildings or using a variable fee calculated on the degree and intensity of the use of the solar panels. Such solutions, apart from being able to reduce energy costs, allow companies to operate far more sustainably, thereby reducing capital expenditure.

Step-by-step, it is becoming much easier for investors to trust in the future sustainability of their investments.