When considering solar for a multi-unit building, it’s natural to question things, such as liability or the policies governing the legality of selling solar energy to your residents. A solar system for your property is an investment, and you must make sure it is properly protected. This is a common question our team here at Ivy hears from multifamily property owners and residents. In this post, we’ll break down the policies that make it possible to distribute solar energy to residents and the various legal protections you can put in place.
IPP Solar Code Facilitates Selling Solar Energy
Distributing solar energy to residents is made possible by the IPP (Independent Power Producer) solar code. This is part of the Public Utilities Code, and it covers two important details:
- Defining who can be an Independent Power Producer.
- What an IPP can do with their solar energy.
First, an IPP, or, in this case, an Independent Solar Energy Producer, is any corporation or person with one or more solar energy systems generating electricity. Second, the electricity from their solar asset can be applied to the IPP’s own use or the use of its residents or tenats. This provides the legal right to product and sell solar energy on a multi-unit property without being considered a “utility”.
Virtual Net Metering Enables Monetization of Solar Assets
Virtual Net Metering (VNM), or Virtual Net Energy Metering (VNEM), is the utility tariff policy that enables a multi-unit building to share solar energy across multiple meters. Prior to VNEM, multifamily buildings could only apply a solar asset to the common area load. The VNEM policy makes it possible to distribute solar credits between the property owner and individual resident meters. This policy is vital to the legality of selling solar because it outlines locked-in energy rates after adding solar and the ability to distribute solar to residents.
Protections Provided by Rental Agreement Solar Addendum
Before distributing any solar benefits to residents, there is an essential step to legally protect you and your residents. If you implement Ivy’s Virtual Grid software for your solar billing, this step is handled for you with our Solar Lease Addendum/Amendment to your Rental Agreement. It has all the language required of IPPs, including communicating:
- How the resident’s monthly solar bill will be calculated.
- The passthrough discount amount for your community.
- Terms of payment, including late fees, administrative fees, removal from the program, and remedies for nonpayment.
- Disclosures required by the California Public Utility Code, including the good faith estimate of annual electricity generation.
- System maintenance responsibilities of the IPP.
- Termination and non-obligation to re-assign the solar lease if the resident no longer rents the premises.
As you can see from this list, the rental agreement solar addendum provides valuable legal protection and clearly outlines program expectations for both you and your residents.
FAQ: What happens if the solar isn’t producing enough for all the residents?
This is a question we receive frequently, as solar generation relies on clear skies and functioning technology. If there is an excess of cloudy days, your system may not generate enough electricity for all the residents. In this case, the property owner is protected from any liability because the good faith estimate of solar generation was communicated in the rental agreement solar addendum.
It is normal for solar panels to produce a surplus of energy in summer months and have lower production in months with shorter daylight hours and cloudier weather. However, that simply means you and your residents will have large savings in the summer and smaller savings in the winter. Additionally, using Ivy’s Virtual Grid solar billing software ensures that you equitably distribute the solar credits generated by the system, no matter how few.
Questions About the Legalities of Multifamily Solar? Call Us.
If you’re considering solar for your multifamily property or multi-unit building, you will have far greater success and ROI with the right systems and support in place. Not only do you have to make sure you meet all the requirements of the Public Utilities Code, but you’ll also have to manage the distribution of solar energy to your residents. Both of these can be stressful tasks to undertake on your own. With our Virtual Grid solution, you get an intelligent cost recovery and asset monetization model with performance monitoring, optimization, and the support of Ivy’s team. We have a deep understanding of the legalities of selling solar energy, so you don’t have to figure it all out on your own. Contact us to get your questions answered or get a solar revenue estimate for your property.
Pioneering the Future of Multi-Tenant Solar Energy Management
2024 was a trailblazing year for Ivy Energy, where we shattered barriers, redefined possibilities, and delivered innovative solutions to address the multi-tenant solar split incentive challenge. By driving product advancements, forging impactful partnerships, and scaling operational processes, we empowered multi-tenant properties to embrace clean energy with confidence.
A Year of Growth and Market Expansion
Ivy has grown its active project pipeline 450% compared to 2023, with a line of sight to clear +600% in active projects by the end of the year. Our tech-enabled solutions empower more communities than ever. With $18M in Series A funding (Read more) and the strategic acquisition of Glow Energy (Read more), we are poised for unprecedented growth and impact. This investment enables us to enhance our technology, streamline operations, and expand our reach into new markets nationwide.
Entering new markets with increased resources allows us to address diverse energy challenges and deliver tailored solutions to property owners and tenants. Additionally, the launch of our consulting arm provides expert guidance for our clients and partners to save money and enhance ROI while navigating intricate solar investments.
Meaningful Operational Updates
At Ivy, innovation isn’t just about technology—it’s about creating digital tools that empower our clients and their tenants:
- PropTech Integrations: Partnered with RealPage, Entrata, and Yardi to automate rent roll syncing, move-in/move-out updates, and direct charge posting to resident ledgers. These integrations reduce monthly processing time by up to 2 hours per property while enhancing data accuracy and operational efficiency.
- NEM Credit Delay Optimization: The Utility Coordination team adopted the CPUC informal complaint process to reduce delays in NEM activation after PV solar system commissioning. This improvement cut the average resolution time for delayed NEM credits from 123 days in 2023 to 49 days in 2024, allowing property owners to see Net Operating Income over two months sooner on average.
Platform Advancements that Lead the Industry
Our engineering team broke new ground, ensuring our platform stays ahead of the curve:
- Migrated to a new infrastructure processing system for faster processing and further automation improvements across operational features.
- Introduced IvyDual in response to regulatory requirements in California, which allows us to enter new markets where consolidated billing is not viable.
- Achieved SOC 2 Compliance, reaffirming our commitment to data security. (Read more)
- Built initial public API for Conservice integration and new utility data access pathways, strengthening our platform’s versatility and reliability.
Empowering Positive Experiences with CX
At Ivy Energy, our customers rely on us as true partners in their clean energy journey, helping them achieve long-term NOI growth while providing exceptional support for property owners and tenants. We consistently deliver this experience by simplifying complex utility processes and offering our white-glove service that ensures our clients feel supported, informed, and empowered to succeed. This year, Ivy’s Customer Experience Team launched two significant platforms:
- Ivy Implementation Portal: A step-by-step, transparent portal that simplifies solar implementation for our clients and partners across multiple organizations. (Watch a walkthrough of the new portal here.)
- Resident Help Center: Educate tenants about the solar program with helpful resources and offer direct support online or by phone. (Explore the Help Center)
Shaping the Future Through Thought Leadership
In 2024, Ivy Energy reinforced its position as an industry leader; our Virtual Grid 3.0 impressed the judges and earned first place in Solar Power World’s “Best in Show” award for large-scale solar innovation. (Read more)
Leadership team members Alex Dogan, Tanya Kuhn, and Sean Nam were celebrated in San Diego Business Journal’s Leaders of Influence in Technology 2024 for their contributions to advancing sustainable energy. (Read more) Ivy was also featured in Alt Energy Magazine (Read more), San Diego Business Journal (Read more), and on Solar Academy. (Read more)
Logan Carter showcased Ivy’s groundbreaking innovations in a main stage speech at Cretech NY (Watch here), an engaging appearance on the IMN Podcast (Listen here), and a deep-dive interview with Chris Moreno, also known as “Mr. PropTech.” (Watch here) Ivy’s policy team further expanded its influence by authoring a Model VNEM Whitepaper, a critical guide to enabling multi-tenant solar models nationwide. (Read the Whitepaper).
Measurable Environmental Impact
This year, Ivy Energy amplified its environmental contributions, with contracted units in implementation set to offset an astounding 109 million pounds of CO2. Meanwhile, active units have already offset 9 million pounds of CO2, demonstrating our ongoing dedication to reducing carbon emissions.
Looking Ahead to 2025
As we celebrate 2024’s successes, we are always looking to the future. In 2025, we’ll continue to push boundaries, deliver innovations that empower our clients, improve tenant experiences, and lead the multi-tenant housing sector toward a sustainable future.
A Message from Dover Janis, CEO of Ivy Energy
“2024 was a year of progress and adaptation. While utility-caused delays challenged our growing pipeline, our focus on agile problem-solving reduced their impact and kept the market moving forward. This is a testament not only to the dedication and focus of our team but also to the strong macro-level foundation that the onsite energy business model provides for real estate owners, even in the face of monopoly-driven resistance. With a large and expanding customer base and hundreds of projects, we have continued to validate the transformative potential of clean energy solutions for shared communities. I’m incredibly proud of our team—now among the most mature, knowledgeable, and experienced in the industry—as we trail blaze the path forward. The market is primed to grow and drive transformative change in local communities. I’m deeply grateful to our partners and customers, whom we have the privilege of serving every day as we continue to lead the way.”
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