Prepaid solar energy could very well be the savior for the rental markets challenge of heightening electricity bills. Approximately 1.8 million rooftops in Australia belong to the residential rental market.
Historically, this sub-market has been largely ignored by solar companies targeting the residential market. The focus has always been on homeowners, but all of that is about to change, if one Australian company has its way.
Why haven’t landlords of apartment buildings taken advantage of photovoltaic technologies so far? On a large scale, the issue lies around misplaced incentives. Landlords typically don’t experience the same level of incentive to convert to green electricity because they aren’t the ones who pay for the electricity being consumed in their buildings. Likewise, renters do not have the incentives to purchase solar panels because they do not own the building and cannot make changes to it even if they want to. The problem is the same all over the world, but one Australian company is changing the dynamics of this issue.
Prepaid Solar, a Sydney based solar group, has devised a technology that allows tenants to prepay for their electricity and then track their electricity consumption using their sub-meter display. Since tenants are able to track their usage of electricity, they are given the incentive to use less in order to save money. Using Prepaid Solar’s system, tenants are able to purchase more electricity when their tab is running low using the phone, internet or even in person in some buildings.
One building that has adopted Prepaid Solar’s is Varsity Towers, which houses hundreds of Bond University students. Students pay for a fair allocation of electricity and a sub-meter that is located in every unit counts backwards from the credited amount. The meter’s display shows energy usage and the remaining balance.
The savings are significant for both landlords and tenants. As the owner and purchaser of the solar power system and the sub-metering system, the landlord can turn a profit from selling the ‘free’ electricity generated by the solar panels to their tenants all the while passing some of the savings on to tenants. This can often translate into a 5% discount on tenants’ energy bills as well as an improved living experience with their sub-meter monitoring system. An additional benefit for landlords is that the value of their property increases. With this scheme, landlords receive quick payback of their initial investment and returns between 20% and 40%, depending on the commercial site. Having green power might even help landlords attract more tenants.
While the business case may seem stronger for landlords, it’s actually a really good deal for tenants as well. Without having to invest or do any research, tenants receive an upgrade to their living quarters, the knowledge that their energy is sourced from solar power, an approximate 5% discount on their electrical bill and the ability to track their consumption of electricity in real time.
Regardless of whether the system is perfectly fair, it’s still about getting solar energy out there and it’s about time that someone addressed this market.