About 75% of commercial buildings are owned by landlords. Therefore, a lot of electricity users are wondering if they are shut out of the benefits of a solar system. The downside to investing in solar if you don’t own the building is that you may not be able to take advantage of all the long term benefits of a solar system on the building you occupy. However you will still be able to drastically reduce your electric bill, get better power, maybe get shaded parking or work area, advertise you are powered by the sun and be protected from future rate increases. If you find yourself asking “Should I invest in solar if I am a tenant?”, the answer is yes.
Why would a landlord let you put a solar system on their building? The first and most obvious is that it increases the value of the building without raising property taxes. The second one is that you are likely to stay in the building if you have such a large investment tied up into it. A solar system shades the roof, making the roofing and air conditioning system last longer.
If you like solar, you can ask your landlord to install a solar system for you and give you a future discount on your electricity bill. We have done this for tenants on many occasions, so we know it works. You can expect about a 10% discount on your electricity bill. We have all the billing programs set up for automatic billings based on your usage as a tenant. Expect to be signing a lease that runs at least 10 years for this to occur, however, because your landlord will not want to finance a solar system without a retail buyer for the electricity it produces. If you only have a few more years on your lease, you can wait or re-write the lease at this time. There is no guarantee that a landlord will install a solar system and sell you the power, resulting in a lower overall electricity bill for you, but it is worth asking.
So why should you even think about investing in a solar system on someone else’s building? Solar systems have about a 2.5 year payback on typical installations in PG&E territory. This is the same as a 40% return on investment (ROI). That is like getting 40% on your money in the bank. Because of this high return, it is worth financing the project because you will still have a high return. Most financing is set up to have savings from day one. Once the system is paid for, the savings really skyrocket. You will want to be sure you want to stay in the building at least ten years to have a good investment, and if you are in the building for the next 20 years, it would be a great investment.
If you do have to move out of the building, you can lease the roof from the landlord and sell the power to the new tenant, electricity users in building adjacent to the building, or sell the system to the landlord so that he can sell power to the tenant.
If you have more questions, read some of the other articles or contact us for a no-obligation, free proposal.