This article was submitted by Chris Sparkes, a lead technician for a large solar company in the UK.
There are up to 39 million people in the United States who live under a roof which may be perfect for solar but will find it almost impossible to capitalize on it. That’s almost 13% of the population and over 230,000 acres of roof space that stands to be excluded from the solar revolution.
Apartment complexes are notorious in the industry for being difficult solar installations. You have two or more households sharing one roof space, each needing their own inverter and other equipment. How do you make that financially viable? The secret, it turns out, may be submetering.
What are the most common options for apartment buildings?
A client of mine who manages a 42-apartment complex in Worcester, UK, recently asked me for a minimum of 300 panels for the complex to reduce their ever-increasing electricity bills. Traditionally, there would be three main options for this install, none of which would be an ideal solution:
First, they could string the panels into a series of dc distribution boxes, which divide the power into smaller strings for each apartment, which has its own inverter. This would be enormously time-consuming to install and very expensive for the savings it would offer.
A second option would be to install microinverters and distribute the ac from a set number of panels to each inverter. This would reduce the installation duration but would certainly still be prohibitively expensive.
Clearly then, bringing all this solar to each apartment is a lost cause if the plan is to save money on bills. This is the conclusion that most managers come to.
If they’re still desperate to delve into the world of solar, they generally resort to the third option of a smaller installation which purely supplies communal areas, such as corridors, outdoor spaces and elevators. This is a tough sell to residents when it will increase service charges for years before any savings starts to trickle down.
Submetering: the powerful third way
Enter the small but mighty submeter to save the day. The concept behind its use is simple: The apartment management company takes over responsibility as the residents’ energy supplier and purchase wholesale electricity, with all savings derived from the solar being passed on to the residents.
There are two main methods of submetering:
One option is for the management company to use the free solar electricity to drag down the overall wholesale price of the electricity they purchase. They can use this to provide a low-cost blanket tariff to all the residents. This is simple and requires few resources to maintain once it is implemented. However, it gives no incentive for the residents to prioritize their energy use during daylight hours and may unfairly penalize those who do.
The second option is fairer, but more resource intensive. Residents can have smart submeters that measure their half-hourly energy usage. This means that the management company can incentivize the use of excess generation by providing the cheapest rates at this time. This may require full-time staff members employed to manage it, but it will mean a much higher percentage of the solar is consumed locally and much less reliance on negotiating export rates.
Criteria for implementation
The ease of implementation will depend on which state you are in, but this idea is primarily targeted toward those whose:
- Apartment complex is large enough to warrant such a system;
- Management company has the resources to become a micro energy supplier.
The following fifteen states have relevant legislation surrounding electricity submetering:
- New Jersey
- New York
- North Carolina
- North Dakota
For people in these states, the regulations are numerous and varied, with far too many to delve into in this article. All such regulations can be found at the National Conference of State Legislatures. The regulations generally revolve around the concept of avoiding profiteering, minimizing administrative costs that are passed to the end-user, and providing a valid reason for its use, such as conservation of energy. All these conditions are perfectly compatible with such a system.
If you are not in one of these states, lucky you! You are pretty much free to implement submetering with solar however is most suitable for your company.
To profit or not to profit?
That is the million-dollar question. My client has decided to be philanthropic and pass any profit his management company makes back to his residents. The choice he is making is simply whether to do this through direct rebates or through investments in improvements to the complex.
To a certain extent, the decision about whether or not to profit from this venture comes down to the legislation in your state. In the UK, a company that is submetering and does not both produce electricity and purchase wholesale electricity cannot profit from its sale, so my client’s decision is admirable, though forced.
If you are within a state that permits profiting from submetering systems, it may be tougher decision. It may depend on what rules are in place in your state for consultation with landlords or tenants for major works. In the UK, Section 20 affords leaseholders significant sway over the decision. Therefore, if my client were allowed and intending to profit from this, there would likely to be little support from stakeholders and he would struggle to progress the project.
Either way, the technology and processes are there and provide a viable path to draw millions more Americans into the renewables revolution.
Chris Sparkes is a former science teacher who always enjoyed sharing his passion for the inner workings of renewable energy systems and their wider implication for the energy transition and climate change. He now works as a Lead Technician for a large solar company in the UK.
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