Although rooftop solar power has experienced massive growth in Australia in recent years, one market sector has been very challenging – electricity consumers who rent the property they use. This applies for both residential and commercial tenants.
The high electricity tariffs in Australia affect both residential and commercial consumers, and paying less for electricity is an attractive proposition for anyone. However, solar power in rented properties has experienced slow growth, since it is difficult to make it work for both owners and tenants.
A viable approach to make solar power work in rented properties is splitting the benefits and outsourcing the part that is technically demanding: installation and maintenance. This is possible with the concept of solar as a service, combined with an embedded network.
Solar as a service is a business model where the PV system provider remains the owner, but the installation is located at client premises and the energy output is available for their use.
The commercial solar system provider is responsible for financing and maintenance, and in exchange the user signs a contract called a Power Purchase Agreement (PPA):
Real estate developers can adopt “solar as a service” to eliminate the financing and maintenance expenses associated with solar power. In order to split the benefit with their tenants, an embedded network can be deployed.
Normally, each tenant has a power meter and pays directly to the utility company. However, this involves having a dedicated power supply for each commercial space. With an embedded network, property owners are billed for all the electricity consumed by their facility, but in turn they sub-meter and bill their tenants.
If the property owner deploys solar as a service, their average kWh price can be expected to drop, and this can be reflected as a lower price for tenants.
The combination of a solar PPA with an embedded network works for both tenants and property owners. While tenants gains access to an electricity price lower than the normal utility tariff, property owners can keep some of the savings by paying a unified power bill and then charging their tenants. There is also a marketing benefit for developers, since they can offer a lower electricity price than commercial spaces without solar power.