Considering all of the benefits of solar for the environment and lowering utility bills, solar is thriving in the single-family home market. In California, 10.49% of single-family homes have solar. However, over 46% of California’s population rents, yet less than 1% of rentals have solar. This raises the question: What has prevented shared buildings from adopting solar?
The split incentive issue comes into play with shared buildings because the property owner invests in the solar asset but gets few benefits. In fact, most multifamily property owners feel that understanding Virtual Net Metering (VNM) policies, distributing solar benefits to residents, and managing billing for solar is a logistical headache. Without a clear return on investment, property owners have little reason to invest in clean energy.
In the past, shared buildings could only use solar to offset common area electricity. This provided too little of a benefit for building owners to adopt solar. However, with the introduction of the Virtual Net Metering policy, multifamily solar can be shared with residents in addition to offsetting common area electricity. This opens up many possibilities for multifamily owners, as a shared solar system is a marketable amenity and can generate additional net operating income (NOI).
Even if multifamily owners understand the VNM policies and the opportunity it creates, they still face the obstacle of implementing and managing billing solar to their residents. Several multifamily properties opt for a flat discount system, but that doesn’t result in equitable sharing of the solar benefits. Trying to manage energy data sharing with utilities and an equitable benefit based on resident usage simply creates a pile of work that their property management teams don’t have time for.
Virtual Net Metering was a big step in enabling the adoption of solar for shared buildings in California, but it doesn’t solve the problem of multifamily solar management, billing, and a clear path to return on investment. That’s where Ivy’s Virtual Grid comes in. Our software makes it simple for shared buildings to adopt solar. Not only does it allow multifamily owners to benefit from solar savings, but also it guarantees savings for their residents. In doing so, property owners generate an average of $500 to $1200 per unit in new annual NOI. The software is complete with seamless rent ledger billing integration and a consumer-friendly monthly solar bill for residents. These features and more combined with the clear ROI eliminate all of the obstacles that prevent shared buildings from adopting solar. The impact of more shared buildings with solar will be felt far and wide as California is well-known for rate hikes and some of the highest electricity rates in the country. If you’d like to learn more about how Ivy can support your shared building’s adoption of solar, schedule a demo with us today.
CA has passed laws like AB802 and Title 24, mandating renewable energy on certain multi-family properties?
Click Here to learn more about how you can comply while turning a profit with Ivy’s Virtual Grid alternative to traditional Sub Metering.