RENTERS REWARD – Can Tenants get cheap, clean solar juice?
Another roof top solar record broken: February 2018 sees Australians invest in (ie: buy) a further 117mW of rooftop solar installations across the country. It seems not that the renewable horse has bolted but the entire team has jumped fence and galloped off. However not all segments of the market are in positions to benefit from the uptake of clean, affordable, bill slashing solar power.
Apartment dwellers, government sponsored housing recipients and renters have all been left behind in the great solar revolution. And no viable alternatives yet offered. The residential rental market is fully 40% of the countries entire housing stock and truthfully, very few of these residences will ever experience the joy of knocking on an inverter at 5pm, just to see what was generated that day.
Those who live in affordable housing are at the mercy of the landlord really and are in no position to agitate for change and high-density apartment living ticks several boxes in the urban planners to-do lists but solar power is not for them – not yet anyway.
To be fair, sharper minds than mine have been and continue to explore potential solutions for these solar-for-everyone conundrums: the Virtual Power Plant option for cheaper housing in South Australia; peer to peer power sharing via the deX and companies like Reposit and Greensync for apartments and various other solar power thought bubbles that need to be explored, tested, tweaked, played with, taken up or abandoned as we collectively move toward what may become a highly diversified energy market in the years ahead.
It’s all exciting stuff but today I want to talk about the renters. And not just residential but also small business. It’s estimated that as much as 80% of small businesses trade in rented space. That’s a lot of roofs that may not ever be solar panelled.
Why? Because if you are a landlord, why would you spend a clutch of money on a solar system that benefits only your tenant? And if you are a tenant, why would you invest in a solar system that will stay on your landlords roof after you’ve gone? Nobody wins here. So nothing happens. And all those solar installation companies out there scrap around for the 15-20% of buildings that are owner occupied. No wonder the gate keeper won’t put you through to the business owner.
Needless to say, if the right kind of solution could be found for this huge market niche, the opportunities for a company such as ours are vast. We’ve examined the PPA offer and the 3rd party monitoring/billing offer from several providers and while each of these models supply benefits, some parts of the process are still a bit…annoying.
So when I stumbled across a newly formed company called Landlord Energy, I was initially intrigued, then excited. What Landlord Energy have done is team up with a national licensed electricity retailer and working together, they have brought to market a Landlord/Tenant solar solution that is both practical, elegant and a win for both parties (or all three parties, if you include the solar installer). Their pitch is: tenant gets discounted power (cheaper than grid) from the solar system the landlord has paid for. The landlord gets a regular income from the solar power the tenant uses. This pays for the cost of the system. What they do is install a solar consumption meter under the main meter when the solar system is installed. The retailer invoices the tenant as usual and the dollar amount the tenant spends on the consumed solar power as well as the export solar power goes to the landlord. There is only a single bill for the tenant. The grid power the tenant uses goes to the retailer. The differences with this model and a PPA is there is only one bill and the tenant sacrifices the exported Feed in Tariff to the landlord.
So the tenant gets cheaper-than-grid power for their business as well as ‘green credentials’ and the landlord gets a return on investment and a passive income for the life of the system (or the life of the tenants’ business). It’s a simple, practical, turn key solution that breaks wide open opportunities in the small business rental market for taking up solar power.
The people from Landlord Energy say the model works for both residential and small business but stresses the churn rate of residential tenants, their freedoms and rights under Consumer Law and load shifting necessities can make the uptake of landlord owned residential solar a bit harder to negotiate. These issues are a lot less common in the small business space, they said.
My initial approaches to commercial landlords have been very promising and it looks as though Powervault will have an enormous new market to canvass in the coming months, that being the small business rental sector who, until now, would not have had the opportunities nor incentives to consider solar power for their enterprises.
Apart from saving the world a roof at a time, one of the most satisfying aspects to working in the renewable energy industry is being privy to great minds creating great ideas forcing great disruption in the most simple and elegant ways. The simplicity of the Landlord Energy model is testament to just that. Now, if you’ll excuse me, I need to call my landlord.