Condominiums and multi-family housing communities present many opportunities (and challenges) for going solar. If you’re thinking about taking your condominium or multi-family housing community solar, check out our info guide!
How does solar work?
Check out our solar FAQs to learn the basics of solar and how it works.
How does solar work on a condo or multi-family building?
Unlike with a single residential home, where the solar system is connected directly to a single electric meter, adding solar to a multi-family building can more complicated. There may be multiple meters, shared roof space, and many more decision makers.
Solar PV systems can be sized to power a percentage of a building’s electricity use, offset usage in common spaces, or provide power for electric vehicle charging.
There are different project types that may be most appropriate for your situation depending on the type of building, system expectations and your budget. The less complex and more straight-forward the project is, the more likely it is to be successful. Potential project models include:
Project model #1: Offset common area usage
The easiest option for going solar in a condominium or multi-family community is to use the solar PV system to offset electricity usage in common spaces for elevators, lighting, and HVAC systems. This approach will work if the building is master metered, or is separately metered but there is an electric meter for the common spaces.
By offsetting the electricity usage in the building’s common areas, all participants in the building benefit equally and the payments for the system can be easily rolled into the periodic assessment (‘condo fee’) or financed by the condo association. If the cost of paying for the system is less than the savings on the common area electric bill, solar can be a cash flow positive decision for a condo from day one.
Project model #2: Solar on individual units
A solar system can be connected to the electric meter of a single unit, or a select number of the apartments in in a multi-family housing building with units that are separately metered. The individual unit owners will own the system and the benefits of the solar system will be accrued by those individual unit owners. The advantage of this approach is that only the individual units interested in going solar will participate and pay for the system. This has very little impact on non-participants. The downside is that only certain individual units will benefit from the solar system installed on a shared roof.
This approach may still require approval of the condo board, co-housing association, or other decision-making authority. This is particularly true if the roof is shared by multiple units. It is therefore critical to be proactive in finding out about the procedure or precedents for approval regarding solar and working to educate the decision-making authority about the benefits of solar.
Project model #3: Solar thermal system for hot water
If your building has a central water heating system that provides hot water to all the units in your building, another approach is to install a solar thermal system to lower the costs of heating water for all of the residents in the building. A solar thermal system can be a cost-effective way to help heat your building’s hot water. It is a good option if you don’t have enough space for a large solar photovoltaic (PV) system. Check out our information on solar thermal technology to learn more.
Project model #4: Community solar project (community net metering)
With this approach, individual units can have a portion of the solar system’s production credited to their electricity bills. For example, you could install 50 kW of solar on a roof and divide up the system’s production among all of the different units, or those that elect to participate, with each getting proportional credit for the solar energy produced on their utility bill. Check out more information about community solar.
Starting a project
These are the basic steps you need to take to determine if solar makes sense for your condo.
Step 1: Determine property’s suitability for solar
If you don’t have space on your roof, solar installations over parking lots can often be a good alternative to a roof-based installation.
Step 2: Determine who has authority to approve or reject a solar installation
It is important to know who owns the roof or structure that will support solar panels, and who has final authority to approve or reject a solar installation. It is easiest to go solar on an individually-owned and maintained roof because the benefits and ownership accrue to a single decision maker. Decisions to go solar on commonly-owned or maintained roofs involve an extra layer of complexity since they generally require approval of a condo board or community association appointed to represent the collective interest of property owners. You should be familiar with the decision making structure and procedures related to external or structural improvements such as solar. You may also need to educate your condo board about solar energy to address common misconceptions about the technology. You can learn about solar and prepare yourself to answer these questions by checking out our solar FAQs.
Step 3: Solicit three bids from area installers
Once you’ve identified the project decision makers and gotten an initial go-ahead, it’s time to solicit three bids from area installers. They will either visit in person or conduct a remote satellite assessment of your roof and then send you a proposal. You’ll need to provide a copy of a recent building electric bill, as well as information about your building’s roof.
Step 4: Identify financing, budget and system expectations
Solar projects can require a substantial upfront investment. Many types of financing are available. It is important to have an idea of how a system will be paid for early on and to clearly define your goals for your project.
You’ll want to know the answers the following questions:
- Who will pay for the system?
- Will it be paid for individually or collectively?
- What is the budget?
- How much energy production do you expect to get from a system?
- Will you move forward only if the project saves money or will a revenue neutral project be acceptable?
The final answers to these questions will likely be informed by the bids you receive from installers, but it’s important to start the conversation early.
Financing for projects can take many forms. There are, for example, specialized loan products for solar that are available. Also, many solar installation companies work with financing institutions. If you know your organization will require financing, talk to the installer about that as you solicit bids.
In Maryland, you can use a power purchase agreements (PPAs) to go solar without any upfront cost. With a PPA, another entity (usually a solar company) owns the solar system installed on your organization’s roof. You then pay the installer for the power those solar panels produce, usually at a price lower than what you are currently paying your utility. For example, if you currently pay $0.14/kWh on your electric bill (for supply AND distribution), with a PPA you would only be paying $0.09/kWh for electricity produced by the solar panels. There’s also no upfront cost to going solar, since you just pay for the electricity the solar panels produce.
This mechanism allows you to install solar with no money down and only pay for the energy produced by the project, rather than paying to own the system itself. However, at the end of the PPA term (usually 15 years), your organization does not own the system. You have the option to either (1) sign another contract with the solar company, (2) have the company remove the system at no cost, or (3) purchase the system from the installer at “fair market value.” PPAs can be a great way to go solar for condominiums but it is important to look at the “fine print” in the PPA contract. Key issues are the length of the contract and “escalation clauses” that increase what you are paying for solar energy each year.
Need some help?
Help getting started
We will meet with your organization, condo board, or interested individuals and help you get started. During the meeting, we will identify key factors relating to the feasibility of solar at the site, detail the steps for going solar, help you identify the best technology and project model for a particular circumstance, and help identify potential obstacles and opportunities for a project. The goal is to educate potential project stakeholders about the reality of taking a project forward. Before the meeting, we will provide a remote assessment of the site’s solar potential and only proceed if the physical site is determined suitable for solar. At the end of the consultation we will help identify next steps, missing data, and, as appropriate, recommend 3-5 companies for you to solicit detailed bids for your project.
Preparing a project and financial analysis
We will describe the various options for solar systems at the site, provide an estimate of potential system size, energy production and return on investment horizon, and present various options for project models. This may include site analysis, determination of percentage of energy solar can provide, and presentation of the findings and general project options as a 1-page summary for decision makers.
Issuing an RFP for the project and/or analyzing bids
We will work with you to solicit bids and/or to analyze bids you have received from area installers. We can help you identify the differences in price, equipment and discuss financing options, renewable energy credits, tax credit utilization, warranties and installer experience. We are installer-neutral and have extensive experience working with local installers. We have no financial relationship with any installers. As such, we can offer informed, neutral recommendations to help you select the bid that makes the most sense for your organization.
Briefing key stakeholders and/or presenting about solar
We can help you present recommendations and solar information to decision makers, community members, and other stakeholders. We are very experienced in conducting solar info sessions and can present information to condo board leaders, organize a ribbon-cutting ceremony to celebrate a successful project, and/or educate occupants about a solar system on their building.