Can I Charge Tenants for Solar Power? New Clean Energy Income for Property Owners
Selling solar energy to tenants is a lucrative opportunity that a growing number of California property owners are making the most of. It creates a new stream of income for landlords and a new opportunity for energy savings for tenants who do not have to figure out how to get access to clean energy on their own.
Advantages of Selling Solar Energy to Tenants
- You get to contribute towards creating environment-friendly homes and practices without much effort.
- A study by Willow showed that homes that offer clean energy options have seen an increase in value. Homes with power efficiency are becoming increasingly popular with potential buyers.
- Creates a win-win situation for both tenants and landlords. The latter can generate a side income and tenants pay less for utility. Homes offering convenience and savings in the form of clean energy are more attractive.
- For property owners with buildings installed with solar panels, clean energy distribution can help with ESG goals and related incentives.
What are your options?
Landlords and property owners can choose to set up solar panels on the property for providing common electricity or opt for a shared solar system with virtual net metering (VNM). The latter involves the tenants paying for their solar utilization. With VNEM you are provided flexibility around enrollment and allocation to tenants, this means that if you need to change tenant participation it can be done via administrative process without moving physical solar components. Ivy’s managed service handles all of this for you if you opt to use our Virtual Grid platform and solar billing service offering.
How many solar panels does a building need?
As it can be difficult to ascertain the total energy consumption of a building as such, property owners can take into account an average figure based on the area of the floor plan. A general rule followed is 2 watts per square foot. For example, a property that is 4000 square feet in area will call for 8000 watts of solar power. However, there are a lot of other factors including the number of rooms and the shape of the building and the type of appliances that must also be considered.
Ensure that the lease terms are clear
Landlords can sell solar energy as a part of the rental agreement. A lease addendum mentioning key things like pricing, system obligations, and other required consumer protections listed in the CPUC code 2868 needs to be part of the agreement. One of the options would be to analyze energy consumption(averaged over a long period) for a given unit and estimate this pricing structure. Landlords are not allowed to charge more than the utility company according to prevailing utility billing code, so its best practice to make sure this pricing structure is clear and doesn’t come in conflict with that rule. However, it is ideal to provide a pass through discount to make sure that the utility expenses are verifiably lower. Ivy’s Virtual Grid software can help you take the pain out of billing for solar energy across multiple units.
Here are some other factors that you can keep in mind while selling solar energy to tenants:
- Ensure transparency in the process by explaining how the system would work to tenants. Explain everything from cost per kWh to the equipment or software that would be used. This would include information on how usage will be monitored, and more importantly how much they could potentially save.
- Ensure that the household unit would be sharing the benefits in an equitable manner with equal accessibility logic..
- Make sure that the billing agreement is clearly understood by the tenant. This would include billing schedules and what they can expect to see every month.
The most important thing to keep in mind when selling solar energy to tenants is that both parties need to be on the same page right from the beginning. This is one of the key reasons clients use Ivy’s Virtual Grid platform to handle solar billing. We have created the easy button to transact with tenants for solar utilization, this is done through our friendly consumer agreement structure that uses dynamic data to guarantee net savings to users. If you choose to generate solar power on site and create a profit margin or opt for community solar that mainly benefits your tenants from an off-site source, you're helping to increase market value for your community. This is the only solar billing option available that guarantees savings to tenants while providing a clear return on investment for the owner.
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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