There are several ways you could go about charging tenants for the solar electricity they consume from your investment property’s solar panel system.
The simplest and easiest way is by purchasing your solar system from Investor Solar Solutions. Not only do we design and install a solar panel systems especially for your investment property, but it’s part of our service to work with you and your property managers to set up our solar management processes. This ensures easy monthly invoicing for electricity consumed by your tenants. And we provide the service and knowledge for FREE!
The Investor Solar Solutions management process includes best-practice on each of the areas outlined below.
KEY THINGS TO CONSIDER:
- Measurement and reporting
In order to charge tenants for solar energy consumed, your system needs to be able to accurately measure, record and report on solar production and consumption. This means, you need to have a sophisticated monitoring tool linked to your solar system. The monitoring needs to be real time and communicated to a web portal so that you or the property manager can view it as desired.
Many solar systems are solar with “monitoring included”. Often this simply shows production data on an LCD screen. It’s very important to check that the monitoring system meets the above criteria, otherwise you’ll be left providing electricity to the tenant for free!
- Tenancy agreements
Selling solar-produced electricity to your tenants is a new option for landlords. Currently there are no specific rules or regulations set out by any state or territory government about this.
The best advice is to clearly spell out in the tenancy agreement the details of the solar electricity supply and sale arrangement. This should include details like – cost/kWh; frequency of billing; change in pricing; payment terms etc.
- Grid connection
Adding a solar panel system to your investment property won’t mean all of the electricity used in the house comes from solar. The exact proportion the solar system provides will depend on the electricity production of the system, when the power is demanded by the household, if you have solar battery storage etc.
This means the property will also need to be connected to the grid to allow for additional electricity to be imported to the property when the solar system can’t fulfil the demand. Conversely, grid connection also allows the solar system to export electricity to the grid during time of excess resulting in income generation from the local energy retailer.
But who should own the grid connection – the tenant or the landlord???
Currently the tenant manages there own utility connections but in this case the landlord will want to manage the electricity connection so they can benefit from the export credits paid by the energy retailer.
So which retailer and which energy contract is best for property investors with solar???
With growing competition in the energy market it’s best to check out a few different comparison sites. Each city will have different retailers offering different packages, but your aim should be a package which has little or no lock-in period and the highest possible export rate.
- Frequency of billing
This is one of the key pieces of detail that you need to set out in your tenancy agreement. How frequently your property manager sends out the invoices (monthly or quarterly), the payment terms (7, 14, 21 days?) and consequences for late payments should all be clearly recorded in the tenancy agreement so everyone knows what the expectations are.
Currently all tenants pay electricity bills to an energy retailer. In this situation, we are asking them to pay you rent as normal and also pay you for the electricity instead of an energy retailer. So you shouldn’t be any more concerned that they won’t pay for the electricity consumed than not paying the rent each month.
- Sending invoices –
This step is something that can be easily included into the normal responsibilities of a property manager. If done well this process can be mostly automated so that it takes less than 5 minutes to complete the invoice creation.
An Investor Solar Solutions system come with industry-leading solar monitoring which automatically generates your monthly consumption report and sends it to your property manager. It’s then a simple step to transfer this detail to an invoice template and email it to the tenant for payment.
With the range of options shown above there are several ways you could go about charging tenants for the solar electricity they consume from your investment property’s solar panel system.
But do you really want the hassle of researching each step to find the best solution?
The simplest and easiest way is by purchasing your solar system from Investor Solar Solutions. Not only do we design and install a solar panel systems especially for your investment property, but it’s part of our service to work with you and your property managers to set up our solar management processes. These ensure easy monthly invoicing for electricity consumed by your tenants. And we provide the service and knowledge for FREE!
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