Do Solar Panels Work For Apartments?

Solar panels have become incredibly popular for single-family homes. Installing solar panels allows homeowners to generate their own clean electricity and reduce their dependence on the grid. Benefits of home solar panels include lower electrical bills, energy independence, and a smaller carbon footprint.

However, apartments and multi-family housing often face unique challenges for installing solar panels. Limited roof space, shared electrical systems, and regular tenant turnover can all make it more complex to add solar onto an apartment building. There are extra considerations around upfront costs and long-term financial payoff.

The goal of this article is to dive into the key considerations around installing solar panels on apartment buildings. We’ll assess the typical barriers and whether it’s feasible for apartments to install solar in a cost-effective way. By looking at real-world examples and best practices, we’ll determine how and when solar can make sense for apartments despite the complexities involved.

Typical Barriers to Solar for Apartments

Apartment buildings can face some unique challenges when it comes to installing solar panels compared to single-family homes. Some of the most common barriers include:

Limited roof space – Apartment buildings have less roof space per resident than standalone homes. With many units sharing the same roof, there is only so much space available for solar panels to be installed.

Shared electrical systems – Apartments often have shared electrical systems for the whole building. This makes it more complex to install solar in a way that benefits individual units.

Frequent resident turnover – Unlike homeowners, apartment residents tend to move more frequently. This can make it harder for residents to commit to long-term solar contracts and can complicate how solar benefits are allocated.

Lack of ownership stake – Renters do not own their apartment unit or the building itself. This can create less incentive to invest in on-site solar, since they would not own the system or fully benefit from it long-term.

Assessing Available Roof Space

When considering solar panels for an apartment building, it’s important to realistically assess the available roof space per apartment unit. The size and layout of the average apartment building will determine how much solar generating potential its roof really has.

A typical high-rise apartment building may have 100 units or more, while smaller walk-up type apartments often have around 20-50 units. Most apartment building designs stack units side-by-side or back-to-back, with shared walls between them. This can limit the overall roof surface area compared to single family homes.

Each solar panel is usually 1.5-2 feet wide by 4-5 feet long. A good rule of thumb is that each panel can generally produce 200-300 watts under ideal conditions. To fully power a 1 bedroom apartment may require around 5-8 panels or 1,000 – 2,400 watts.

So for example, a 50 unit apartment building would need roof space for 250-400 panels to provide solar power to each unit. That would require 1,250 – 2,000 square feet of unobstructed roof space with proper sun exposure. For a 100 unit building, double that roof area.

The key is evaluating whether the apartment building’s roof size and layout can realistically accommodate the needed number of solar panels per unit. This will determine the solar potential for the building as a whole. Proper solar site analysis is crucial.

Shared Electrical Systems

In an apartment building, there is usually a shared electrical system that connects all the units. This means the solar energy produced from rooftop panels flows back into the building’s main electrical system before being allocated to individual units.

With a shared system, apartment residents don’t connect solar panels directly to their own unit. Instead, the building has a master electric meter that tracks overall energy use. Solar energy produced from rooftop panels offsets electricity drawn from the grid at this master meter level.

To share the benefits of solar with residents, building owners can utilize virtual net metering. This allows solar credits to be portioned out to each unit based on their share of electricity use. Residents then get a utility bill credit for their portion of solar energy produced.

For billing, the utility will measure the building’s total energy use as well as the solar energy generation. Virtual net metering does the accounting to properly divide solar credits and allocate them to each unit’s bill. This allows all residents to benefit from shared solar panels.

With some advanced metering infrastructure, virtual net metering can even be handled automatically by the utility. This seamlessly gives each unit bill credits for their share of solar energy without extra administrative work.

Handling Tenant Turnover

Tenant turnover can present challenges for installing solar panels on apartment buildings. Since installing solar requires significant upfront investments, building owners will want to ensure panels remain useful over many years. Frequent tenant turnover could disrupt this long-term planning.

There are a couple ways apartment building owners can address tenant turnover when considering solar:

• Offering longer term leases, such as 2-3 years instead of 1 year. Longer leases allow solar panels to produce energy and savings over a sufficient payback period.
• Creating solar contract transfer agreements, so new tenants can take over existing solar contracts seamlessly. This avoids disrupting the solar production and revenue.

With longer term leases and solar contract transfers, tenant turnover does not need to be a dealbreaker for installing solar panels on apartment buildings. Building owners can properly account for normal turnover rates within their solar investment models.

Ownership Models

There are two main ownership models for installing solar panels on apartment buildings – third party owned systems and building owner installations.

With third party owned systems, a solar developer owns, installs and maintains the solar array on the building’s roof. The building tenants or owner then pay a set rate for the electricity generated by the solar installation. This allows the building to utilize solar power with no upfront costs. However, the building does not own the system.

The main advantage of this model is that it requires no investment from the building owner. The developer handles all permitting, installation and maintenance. The main disadvantage is that the building does not benefit long-term from owning the asset.

With a building owner installation, the apartment building owner purchases and owns the solar array. This requires significant upfront investment, but the owner retains full ownership. All electricity cost savings from the solar power go to the owner rather than a third-party.

The advantage of this model is long-term ownership and all cost savings. But it requires major capital expenses and handling system maintenance. Each model has pros and cons to weigh based on costs, control and complexity.

Costs and Incentives

Installing solar panels on an apartment building can help offset electricity costs for tenants, but the upfront costs may seem prohibitive. However, there are incentives available that can reduce the overall cost.

The average cost per apartment unit ranges from $2,500 to $7,000 depending on system size and other factors. While this may seem high at first, federal and state tax credits can reduce the costs by 26-30%. Many local utility companies also offer rebates and incentives for solar installation that can lower costs as well.

The return on investment for a solar system in an apartment building usually ranges from 6-8 years. After this time period, the free electricity generated provides ongoing utility bill savings for tenants. Experts estimate solar can reduce an apartment’s electricity bill by 50-75%. So over a 25 year lifespan, a system can provide over $30,000 in savings per apartment unit.

With smart financing and available incentives, a solar system can pay for itself in under 10 years and then provide decades of free power. The long-term savings and environmental benefits make solar a smart investment for apartment owners and tenants alike.

Case Studies

There are inspiring examples of apartment buildings and housing complexes that have successfully adopted solar power. Seeing real-world case studies can help demonstrate that it is possible for apartments to go solar.

One great case study is the Sunset View Apartments in Vermont. This 96-unit affordable housing complex installed a 235 kW solar array in 2016. The ample flat rooftop space was ideal for maximizing solar production. A key factor in making the project feasible was securing financing through a solar power purchase agreement (PPA). Under the PPA, the apartment owners purchase solar power at a fixed rate lower than local utility rates, while the solar company owns and maintains the system. The guaranteed cost savings ensure the project cash flows.

Another model case study is the Park Lee Apartment complex in Colorado. As part of an overall renovation project, the owner installed a 67 kW solar array across two buildings in the complex. The ample south-facing rooftop space received great sun exposure. The deciding factor was a grant from the state’s Affordable Housing Solar Initiative, covering around half of the solar installation costs. This incentive made the payback period attractive at under 10 years.

These examples demonstrate that with sufficient roof space, financing programs, and incentives, apartment buildings can install solar successfully. Key factors range from design, orientation, ownership models, and financing approaches.

Overcoming Challenges

There are some creative solutions apartment owners and tenants can pursue to address the typical barriers to adopting solar power:

For limited roof space, look into high-efficiency panels that require less surface area. Investigate carport or ground-mount systems that utilize available land around the building rather than the roof. Consider participating in a community solar program that allows buying into a shared, remote solar installation.

To avoid electrical system limitations, size the solar array appropriately and get necessary approvals from the utility company. Upgrade wiring and electrical equipment if needed and feasible. Start small with a pilot program before committing to a full building retrofit.

For tenant turnover, provide solar benefits that are attractive and marketable such as bill credits, rather than trying to restrict access. Offer solar subscriptions that transfer with the apartment lease so tenants can opt-in and opt-out. Consider owner-operator models where the building owns the solar system.

Creative funding and ownership models are also emerging, like solar leases, solar subscriptions, and upfront solar purchases with on-bill financing that provide a path forward despite split incentives between owners and renters. Some states and utilities offer targeted incentives for solar on multifamily buildings.

Many of the challenges of solar for apartments boil down to split incentives between owners who would fund and install systems, and tenants who typically pay utility bills and would benefit. But as solar costs continue to decline and new business models emerge, there are more win-win pathways to make solar work financially for all parties involved.

Conclusion

Based on the analysis in this article, solar panels can work for apartments in many cases if the challenges are properly addressed. The main barriers of limited roof space, shared electrical systems, and tenant turnover can all be overcome through careful planning, ownership models like community solar, and taking advantage of incentives. With the right approach, apartments can reap the benefits of solar just like single-family homes.

The verdict is that solar absolutely can work for apartments. While it presents unique challenges compared to houses, with creativity and persistence it is possible to successfully install solar on apartment buildings and allow tenants to access renewable energy. The case studies highlighted demonstrate apartments going solar in different ways. Between rooftop systems, community solar programs, and virtual net metering policies, viable options exist. With the environmental and cost benefits, apartments should give solar serious consideration.