Solar power has become America’s fastest growing electricity source, accounting for more than half of the generation capacity installed in 2021. However, there are still many obstacles that prevent a wider adoption of photovoltaics, and making it viable for renters is one of them. Solar panels also have limited use in high-rise buildings, which have a small rooftop area relative to their floor area.
Community solar power is a great option when installing your own solar panels is not viable. Instead, you can join a shared solar array as a subscriber or shareholder, and a proportional amount of the electricity produced becomes yours. The kilowatt-hour output is measured at the project site, and subtracted from your power bill.
In the case of New York City, community solar power can help buildings reduce their emissions to meet Local Law 97 of 2019. There is little incentive for landlords to install solar panels when tenants will keep the savings, and tenants have little incentive to improve a property they don’t own. However, community solar offers a business model that benefits both of them.
Under LL97 of 2019, your building emissions increase by around 289 g CO2-eq for every kilowatt-hour consumed from the grid. In other words, you’re adding a metric ton of emissions for every 3,460 kWh, and the penalty is $268/ton. However, electricity from solar panels is emissions-free, and exempt from LL97 penalties.
Using energy efficient appliances is viable for tenants, since they can be easily taken to another location at the end of the lease. Unfortunately, the same cannot be said of solar panels - they are firmly anchored to the roof, and taking them along is not simple.
Unless a renter or commercial tenant plans to stay in a building for a very long time, installing solar panels makes little sense. To break even, tenants must wait at least until the end of the payback period, and they could miss better deals.
These issues are avoided completely with community solar. Tenants can simply join a project to save on power bills, with no need to modify the property they are currently using. Landlords also benefit, since electricity from community solar projects can be used to offset emissions under Local Law 97.
The lack of space limits the use of solar panels for many electricity consumers, and the following are some common examples:
Under these conditions, installing solar panels is not an option even if you own the property you occupy. However, you can join a community solar project to save on electricity bills. You also have the flexibility of putting up the property for rent, and using your solar savings in another location.
Joining a community solar project as a shareholder is generally less expensive than installing your own panels. Residential solar systems have a typical price of $3 per watt or more, while commercial arrays fall below $2 per watt. Thanks to their size, community solar projects can benefit from economies of scale.
If you’re a landlord, only the electricity consumption of common areas counts towards your power bills. However, all the energy used by the building is considered when calculating emissions under LL97, even that consumed by tenants. As a result, you save on penalties when your tenants switch to cleaner energy sources.
Installing solar panels to cover the electricity consumption of common areas is viable in this case, but you can also encourage the use of community solar among tenants. This results in a win-win situation - tenants save on power bills, while you reduce building emissions. Partnering with community solar projects will become a viable strategy for building owners trying to cut emissions below the LL97 limits.
In July 2021, the NY State Energy Research and Development Authority (NYSERDA) announced a $52.5 million incentive fund for community solar projects that serve low-to-moderate income households. If you’re an affordable housing provider, your tenants can benefit directly from the community solar projects that use these funds. Eligible solar projects can benefit from both this fund and the existing NY-Sun program.