For landlords who do not live in a unit within the rental property, there are two primary ways for offsite landlords to meter and monetize production from their solar electric systems:
1.) Connecting the system to the tenant utility meter.
2.) Connecting it to a common utility meter.
As you plan the size of a potential solar panel array, it may be helpful to know that the size of solar electric systems for residential buildings in MA averages 7-10 kW. Therefore, most new residential solar systems will use the SMART 3.0 incentive level for systems sized 25 kW or less.
SCENARIO 1: Connecting a solar electric system to the tenant meter
Connecting a solar electric system to the tenant meter means that you offset an individual tenant’s electricity needs first. Any excess generation not consumed by the tenant meter may then be applied monthly to an additional meter or meters via virtual net metering.
Value Stream
As the landlord, if you pay for the tenant utility bill, electricity generated by the solar electric system will directly offset your own costs. If your tenant pays their own utility bill, you may elect to raise the rent in exchange for reduced or eliminated utility bills.
Benefits
- You can advertise the unit as directly receiving solar electricity and increase rent as appropriate.
- Provides you an opportunity to offer a unit to a tenant with utilities included.
Considerations
- Requires close engagement with your solar installer to ensure that you’ll have visibility to the electricity generated by the system and consumed by the tenant.
- If you have multiple tenants, only one of them is likely to receive consistent solar benefits due to the limited size of the solar system.
For an example of offsite tenant meter option, see Russ’ story.
SCENARIO 2: Connecting a solar electric system to a building’s common meter
Connecting a solar electric system to a building common meter means that common area usage is offset first. Since there is generally little electricity demand on a common meter, there will likely be a credit on the common meter bill for excess electricity production. Using virtual net metering, you can elect to apply the excess generation to other property utility accounts. For example, 100 percent of the excess net metering credits can be applied to your own account, split between the landlord or tenant accounts, or you can elect a different allocation.
If there isn’t a common meter onsite and you would like to take this approach, you may elect to install a new meter, though you would need to pay the utility for the cost of installation and an additional monthly meter fee. Some landlords also elect to install a consumption meter to monitor real-time tenant electricity usage data if production meters or bi-directional meters are not an option.
Please note that virtual net metering still requires that properties sharing utility account credits are in the same utility load zone (for example, the Eversource Northeast Massachusetts zone or the National Grid West and Central Massachusetts zone). To see a map of Massachusetts utility load zones, visit Resonant Energy’s load zone map.
Value Stream
If you as the landlord are within the same utility and load zone as your tenant, you can elect for excess electricity credits to be applied to a separate utility account or accounts. If you’re providing excess electricity to tenants who pay their own utility bill, you may elect to raise the rent in compensation. If you are paying for the tenant utility bill, excess electricity credits will directly offset your own costs.
Benefits
- Most straight-forward option if intention is to share electricity across multiple utility accounts.
- Provides the most flexibility if seeking to change virtual net metering allocations in the future.
For an example of the offsite common meter option, see: Mike, an offsite landlord, connects solar to the common meter
Value and Benefits of Solar Based on Landlord Location and Meter Connection
| Landlord location | Meter connection | Value stream | Benefits | Considerations |
|---|---|---|---|---|
| Onsite | Landlord | You consume the electricity; can send excess credits to a separate meter or offer energy to tenant in exchange for increased rent, investing in building upgrades, or other benefits | Most straightforward option if you live at the residence | May need monthly “true ups” for excess credits; uncertainty in financial return to tenant |
| Onsite | Common | Excess solar generation creates net metering credits that can be allocated to eligible landlord or tenant utility accounts. | Provides flexibility to allocate credits across utility accounts and adjust allocations as needed. | Decide compensation method from tenant if sharing electricity generated |
| Offsite | Tenant | Offsets your own costs if you pay for utilities; if tenant pays for utilities, you may raise rent commensurately | Unit can be advertised as using solar, increasing its value; easier for you to offer unit with utilities included to tenant | Work with installer closely to ensure correct benefit/electricity allocation; likely only one tenant will receive benefits for multifamily buildings |
| Offsite | Common | You can use electricity credits generated; if you pay tenant utilities, electricity will subsidize your costs; may raise rent commensurately if tenant’s utility bill is lowered | Allows landlords to allocate excess net metering credits across eligible accounts, offering flexibility in managing electricity costs associated with rental properties. | N/A |
