Local power supply in commercial properties: Tenant electricity or collective building supply?

Between 2014 and 2024, average electricity prices for commercial customers rose by approximately 40% (1), posing a major challenge for businesses across all sectors. Using solar energy directly from your own roof offers a more sustainable and, above all, cheaper alternative to expensive grid electricity, which is subject to various fees and taxes.

However, commercial properties such as shopping centers, logistics centers, or multifunctional business parks often have a large number of tenants who want to be supplied with electricity and have very individual energy requirements. This increases the complexity of distribution and billing for the owner or landlord significantly. There are two central distribution models to use the electricity generated on the roof directly in the building: the tenant electricity model and the collective building supply model.

What to expect from this article

In the following, we provide an overview of what characterizes the two models and highlight their differences. We also take a look at the respective advantages and disadvantages from the tenant's perspective. Finally, we make a recommendation as to which model is best suited for each commercial property.

The tenant electricity concept has been in place since 2017 and is part of the Renewable Energy Sources Act (EEG). In this model, the real estate company or landlord of the building assumes the role of a full supplier. Their task includes both the supply of solar power and the required residual electricity from the public grid when the solar system does not provide sufficient energy. Alternatively, this task can also be assumed by the operator of the solar system in the so-called supply chain model.

From an economic perspective, the tenant electricity model is lucrative, as the operator is entitled to both feed-in tariffs and a surcharge known as tenant electricity surcharge. For systems that were commissioned in the first half of 2025 with an installed capacity between 41 and 1,000 kWp, this surcharge amounts to 1.62 ct per kWh (2). In addition, only a fee for the main meter must be paid, which can be passed on to the tenants.

However, tenant electricity not only entails the rights but also the obligations of an energy supplier within the meaning of the Energy Industry Act (EnWG). The operator therefore needs broader energy industry expertise and is responsible for the tenants' complete energy billing.

Collective building supply was adopted in 2024 as part of Solar Package 1. Unlike tenant electricity, the operator is only responsible for supplying the PV electricity generated on the roof and does not have to worry about electricity from the public grid. This means that they have significantly less administrative work, both in terms of electricity procurement and billing. In addition, the operator of a collective building supply system is not considered an energy supplier within the scope of the EnWG and therefore does not have the corresponding rights and obligations.

However, collective building supply is less lucrative than tenant electricity, as there is no entitlement to feed-in tariffs or the tenant electricity surcharge. In addition, there are complex requirements for measurement technology, as the generation and consumption of all participants must be recorded every quarter of an hour and billed precisely. The implementation of these measurement concepts not only requires more expensive technology but is also sometimes rejected by network operators - which further increases the complexity of the projects.

	Tenant electricity model	Collective building supply
Role of the operator	Energy suppliers within the scope of the EnWG	Operator without utility obligations
Entitlement to subsidies	Feed-in tariff Tenant electricity surcharge	Feed-in tariff possible, but registration as a surplus feed-in supplier in accordance with the EEG is required
Pass-through of costs	Main meter fee may be passed on to tenants	Fees for the main meter may not be passed on to tenants, as it is considered a non-apportionable ancillary cost
Obligations	Procurement and delivery of residual electricity Supply contracts and billing with tenants	Billing with tenants via ancillary costs
Price guarantee	Limited due to volatile residual electricity share	High, since only PV power is supplied
Required energy industry expertise	High	Low
Technical effort	High (meter, supply contracts)	High (measurement technology)

From the tenant's perspective, both models have different advantages and disadvantages.

Advantages of tenant electricity

Cheaper electricity prices: PV electricity does not have to be fed into the grid. The elimination of grid fees and transport costs means that the price of PV electricity is significantly below the market price. Although this is a mixed calculation of residual electricity and PV electricity, the bottom line is that the total electricity price to be paid is significantly lower than that of regular grid electricity.

Convenience: The tenant receives all of their electricity from one supplier and does not have to worry about a separate contract for residual electricity.

Disadvantages of tenant electricity

No freedom of choice for residual electricity: Tenants have no freedom of choice as to where they obtain their residual electricity, as this is determined by the tenant’s electricity provider. This means that they have no access to special tariffs or dynamic electricity pricing models.

Less price predictability: Tenants usually pay an electricity price that is calculated based on a mix of the PV electricity price and the residual electricity price. However, the price for residual electricity cannot be guaranteed for the same length of time as the price for PV electricity. This means that planning security is significantly lower for businesses.

Advantages of collective building supply

Freedom of choice when it comes to residual electricity providers: Tenants are free to choose their residual electricity provider, allowing them to benefit from dynamic electricity tariffs.

Long-term price stability for the PV share: PV electricity costs depend largely on the electricity production costs of the PV system. Building electricity operators can thus guarantee a price over a longer period of 10 years or more, allowing tenants to plan for the long term.

No separate contracts: PV electricity is billed as part of the ancillary costs, and no separate electricity contracts are necessary.

Disadvantages of collective building supply

Higher administrative costs: Tenants must find a supplier for residual electricity themselves.

Transparency of billing: The complex metering concept requires complex billing models, which can be difficult for tenants to understand.

Summary from the tenant's perspective

The tenant electricity model is advantageous for tenants who are looking for a simple solution to obtain cost-effective and sustainable electricity. In comparison, collective building supply offers more flexibility and long-term price stability for PV electricity.

However, the decision on which model to choose is not up to the tenants, but to the property owner. This, in turn, raises the question of which model is suitable for each commercial property and where the advantages lie for the owner or operator.

The choice between a tenant electricity model and collective building supply depends largely on the structural conditions of the property, the energy requirements of the tenants, and the owner's energy management expertise.

The tenant electricity model is particularly well suited for commercial properties with central management, such as office parks, shopping centers, or industrial buildings with uniform administration. It offers financial advantages, especially when subsidies such as the tenant electricity surcharge can be utilized. However, the associated obligations as an energy supplier should not be underestimated and require energy management expertise.

On the other hand, collective building supply is a good option if the focus is on implementation that is as simple as possible, low administrative costs, and long-term price stability for tenants.

Summary of the landlord's or owner's perspective

Ultimately, the relationship between PV generation and the consumption profile of the property determines the economic viability of both models. In addition, there is the question of whether the landlord or owner is prepared to take on the role of an energy supplier with all the associated obligations, or whether they would prefer a simplified model with less regulatory burden. Alternatively, they can also seek support from an external service provider for both models.

Service providers like ENVIRIA offer comprehensive solutions: they take care of the planning, implementation, and operation of the PV system, including all energy-related, technical, and administrative tasks.

In the tenant electricity model, for example, ENVIRIA can act as an energy supplier and take over the associated obligations from the owner, including residual electricity procurement and billing. ENVIRIA also provides a suitable metering concept for collective building supply and takes care of both coordination with the grid operator and billing processes.

This means that owners benefit from a legally compliant, economically optimized solution without having to build up their own expertise in energy law or metering. For tenants, this results in clearly structured access to affordable and sustainable electricity.

(1) https://de.statista.com/statistik/daten/studie/154902/umfrage/strompreise-fuer-industrie-und-gewerbe-seit-2006/

(2) https://www.bundesnetzagentur.de/DE/Fachthemen/ElektrizitaetundGas/ErneuerbareEnergien/EEG_Foerderung/start.html