A simple way to bring solar to multi-family apartments

As an apartment dweller who wants to embrace solar energy, the gap in renewable energy access is ever-present. 

The cost of living, including electricity prices, is at its highest in decades. Self-generated solar energy has long been one of the easiest solutions for house owners to reduce their energy bills, access renewable energy, and increase resilience to blackouts. The proportion of households who have installed a solar system in the US has doubled since 2016, to 8%, according to a poll conducted by social-issue thinktank Pew Research Center in January last year.

But what do you do if you live in an apartment, like me? Even if you can get permission to install a solar system on an allocated area of your building’s roofspace, the cost is likely prohibitive. And if you are mainly out of the house during daylight hours, you would be lucky to offset more than 30% of your energy bills, according to Indian-owned solar manufacturer Renewable Energy Corporation. That makes the payback period much longer.

Opportunity

US body the National Association of Home Builders estimates 31.4% of Americans are in the same position as me and this represents a huge opportunity; local solar installers can broaden market outreach through multi-family projects, with portfolio rollouts offering replicable and scalable deal flow across states. What's more, addressing solar access for apartments will ensure that those most impacted by increasing energy costs are included in the clean energy transition; apartment residents earn, on average, 33% less than the median US household, according to the National Multifamily Housing Council.

There is an even bigger hurdle for apartment residents who are renting, as I do: landlords have little incentive to install solar on rented apartments since they typically bear the cost with the benefits passed on to tenants in the form of bill savings. That is why the adoption of residential solar has historically depended on home ownership.

Residential industry projections anticipate fourfold growth in home solar in the next decade and analyst Wood Mackenzie reports we have already seen a record-breaking 40% increase in solar adoption since 2021. The industry must address demand from the 43.9 million US residences in multifamily buildings, however, to maximize solar adoption.

Potential solution

Imagine solar energy from a single rooftop system could be shared between multiple apartments. The solar array collects energy and pipes it down the building to an inverter, which feeds into grid meters. These meters feed into each apartment and common area. Owners could then jointly invest in the system and multi-family landlords could provide solar energy to their tenants. 

Technology born in Australia and imported to the United States last year does just this. Allume Energy’s “SOLShare” product physically splits the energy from a single solar system, via a hardware device, and shares it between multiple meters. If the electricity is fed evenly into all meters at all times, as described above, significant amounts of energy will be fed back into the grid when apartments are not using electricity.

That’s where SOLShare’s “dynamic sharing algorithm” steps in. It feeds electricity to apartments that are using energy, thereby maximizing the energy consumed by the system and reducing the amount of energy fed back to the grid, making it an optimal system in states where there is no net metering. As a result, apartments can expect a 55% to 75% reduction in grid electricity consumption – more if they have a residential battery.

Over a month, SOLShare works out when and where to feed energy, in order to optimize energy consumption and ensure each apartment gets a fair share. Typically, the electricity will be evenly split but it can also be configured to provide more energy to common areas or larger apartments. Not all apartments need to participate and dwellings can be disconnected remotely at any stage.

Allume Energy already provides around 2,000 apartments with clean, affordable energy, with around half of those in social or affordable housing. Having launched recently in the US, Allume is currently operating in Florida and Mississippi and is pursuing projects in California, Georgia, Wisconsin, Illinois, and Texas. The company aims to have SOLShare available nationwide within the next 12 months.

Allume Energy works with multi-family apartment-owning landlords directly and via its growing network of certified SOLShare solar installers.

Owner-occupiers can engage directly with a certified SOLShare installer, who will arrange a site visit and provide a quote for the building as they would for a solar system on a house. The system can then be installed within two months to four months, with little disruption to residents and no change to their current utility setup – except lower bills. Apartment residents can also inquire through the Allume website, enabling the company to connect them with an installer partner. 

Multi-family apartment block landlords can purchase a solar system, priced per unit, directly from Allume. The company works with installer partners to deliver a turnkey solution and landlords can allocate more energy to common areas or larger apartments to suit their needs. There is a small, ongoing connection fee per unit for monitoring a building’s solar usage. 

Landlords can use solar as a revenue stream by pocketing some or all of the savings from the solar system. Alternatively, they can pass the savings on to tenants, improving rentability and occupancy rates. Inquiring about solar access with an asset management firm would be one place to start. 

What's the bill?

Available incentives include a 30% investment tax credit, a low-to-moderate income adder worth up to a further 20% tax credit, and a further 10% energy communities adder. Allume also works with clean finance providers to offer affordable options with no upfront costs. The Allume team can guide customers through incentive and finance options in their area and tailored to their circumstances.

By expanding solar access, we can improve the quality of life for vulnerable parts of the community, promote environmental sustainability, and create economic opportunity. Low to moderate income solar energy access for apartment owners and renters is crucial to achieving energy equity and addressing the burden of rising utility bills.

Many apartment owners and renters across the US can now access solar energy directly from their rooftops and those who can’t will be able to in the next year, as more utilities come on board. Government incentives, combined with green finance options, are helping improve affordability so that the people who would most benefit from energy bill savings can access it.

Nevertheless, policymakers, utilities, and community organizations must continue to collaborate to implement supportive policy and programs.

About the author: Mel Bergsneider is executive account manager at Allume Energy, responsible for business development in the US market. As the first US-based employee at Allume, Mel leads the Australian startup’s expansion across target markets including California, New York, and Florida. Mel works closely with affordable housing providers, solar installers, and real estate developers to provide solar energy benefits to tenants.