All Forum Posts by: Robert Lubell

In regards to solar... could be a great option to consider. If the development provides an ideal enough foundation and surface area for solar panels, between ITC solar tax credit, federal bonus deprecation, and state MACRS deprecation over 60% of the solar investment can be subsidized. Common area electric expenses would be low to nothing except maybe some demand charges, making electric components the better choice. If there's enough area for additional solar capacity you could even implement solar revenue by selling solar electricity directly to tenants for additional monthly income while also "green"-marketing a lower electric rate to tenants than the power company.

@Kristina Heimstaedt I can help!

Would you take over the utility account completely? Or would you have the tenant still be responsible for the electric utility bill for surplus electricity demand?  As far as economics, with the retail price of electricity in CA being as high as it is, you'll more than be able to recoup solar cost from the tenant while ALSO passing a savings benefit to your tenant. If you're financing the solar you may even be cashflow positive day one. 

The question in my opinion is what's the best method of cost recovery so the tenant perceives real value. Reduced or included power bills can be attractive to most, obviously, but a higher rent as a consequence may push others elsewhere. Plus it's hard for both you and the tenant to measure/track the savings or cost recovery. 

If you could prove the tenant savings month to month compared to the utility's rates that would be a no-brainer for the tenant. That can easily be done and cost virtually nothing with today's energy monitoring tech which could also insure you're increasing your own cashflow on top of the cost recovery.  

Let's connect, I help owners with these rental property solar projects quite frequently. 

Hi Lena, I sent you a connect request. 

Happy to share some info on how you can charge tenants for use of your solar electricity without worrying about separate utility meters, etc. 

Looking forward to connecting

I believe RUBS is enforceable in 48 states.

Love this. Looking forward to hearing how all this goes! As you know already, these type of multi family solar projects are my team's niche, redirecting the electric utility's revenue into your (or property owners) pocket. Master metered buildings are as sweet as it gets for this strategy, but it works for individually metered buildings as well with either utility aggregation or separate unit level energy monitoring. I would love to share some of our experiences with you and bounce more ideas back and forth. Currently have a handful of revenue generating solar projects going from SFR rentals to 20 unit buildings to 280 unit complexes.

Just curious.. Will you be passing any savings (compared to utility costs) to tenants for marketability? If so how will you manage this as utility rates rise/fluctuate? Do you plan on simply raising rent to secure the revenue margin or would you find more value billing as a line item based on individual unit's consumption? The latter might give tenants more incentive to be energy conscience, thus increasing your NOI further.

"Reduce before you produce"

Fannie Mae’s HomeStyle Energy Program is a mortgage option that allows borrowers to finance clean energy upgrades equal to up to 15 percent of the as-completed appraised value of the home. Solar PV is also an option, along with energy- and water-efficiency retrofits. It is available for single-family homes and multifamily homes of up to four units.

Nationwide study of the premium for homes with solar back in 2014. Obviously since then value has only shifted further in favor of solar pv, not to mention solar pv cost continuing to decrease. What I got from it was that homes with solar sold faster and would sell for between $3 and $5 per watt of installed solar pv capacity more than homes without, depending on what states and other factors, etc etc. In theory this would basically mean you would get your initial investment back when you sell plus whatever tax incentives you received. That's in addition to whatever savings you racked up during your solar experience.

Anywhoooo, here it is

http://eta-publications.lbl.gov/sites/default/files/lbnl-6942e.pdf

I'd imagine this is regarding leased panels or a PPA solar program, these are designed to make the solar company lots of money. It's important to keep these separate from purchased/owned solar system scenarios, however many people mistakenly merge these together in their head as the same product, and it's not. Outright owned panels add value. 

 Marc,

Many people don't know this but Massachusetts has consistently been ranked the #1 best state for PV solar. Yes, better than CA and AZ. Going into 2018 still ranks #2.

https://solarpowerrocks.com/2018-state-solar-power-rankings/

Factors include:

1) Overall Grade 2) Renewable Portfolio Standard 3) Solar Carve Out 4) Electricity Price 5) Net Metering 6) Interconnection 7) Solar Rebates 8) State Solar Tax Credits 9) Performance Payments 10) Sales Tax Exemption 11) Property Tax Exemption

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It's not all just about sun hours.. tax incentives, rebates, and local policies make just as much of an effect on solar viability. I have been very involved in the solar industry for about a decade now, and more recently bridging the space between solar and real estate. Here are my thoughts based on your questions:

Need a new roof? The 30% ITC Tax credit for solar ALSO includes your roof. The tax code clearly states the cost associated to a foundation for solar such as a roof will not fail to qualify here. In short you can be credited back dollar for dollar 30% of your solar AND roof cost against your tax liability. Definitely worth doing both together & wrapping them in the same financing. Also, Im not a tax professional and this is not tax advice, but your CPA should be able to claim you deprecation on your investment as well, gaining you even more tax benefit.

Solar panels provide cover from the elements to the shingles located below them, thus increasing shingle life. Most solar contractors these days hold 10 -25 year warrantys on their workmanship/penetrations. It's 2018... days of damaged roofs due to solar installs are long gone (unless you have a ceramic tile roof or something that easily breaks when stepped on)

You can easily reduce your power bill down to just the utility's basic charge, typically 5-10 bucks per month. And in states with high electricity costs, including Massachusetts, you should easily be able to have a loan payment that is less than your old power bill. Financially / Cashflow speaking, solar is a no brainer if you can make this happen. Plus once it's paid off, thats it, no more power bill. 

Batteries are getting better, however for now I would only suggest them to very concerned "doomsday" folks or for the intent of reducing time-of-us utility charges. You can request from you solar contractor to have a grid-tied solar only system installed that is prepped (plug & play) for future battery implementation. There are some minor solar equipment differences, specifically with the inverter, if you intend to add batteries now or later

If a solar system is properly engineered, snow is a non-issue. Most solar engineering software accounts for average weather conditions for your zip when sizing the required system to offset your electric consumption. Ideally it would be designed to "over-produce" enough during sunny months to save up enough Net Metered kWh credits from your utility to get you through the less sunny months without an issue. The utility in MA has a great net metering program that allows you to bank your unused production without needing batteries. 

For a 6-8kw system (this is a tad higher than average fyi), you should feel good in the range of $18k-$25k gross (remember you can get back 30% of that, plus the state incentive, plus any other local rebates/incentives). Basically it's like buying a brand new car at 40% off , except is saves you about the same amount of money that a car would costs you in gas. That makes this a great asset to own.

I do have some good relationships there in MA, let me know if you'd like me to get you in touch with a trusted contractor. 

Hope this helps