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Solar for renters: Prepaid meter technology targets untapped PV market

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One of Australia’s largest untapped solar PV markets – the 1.8 million vacant rooftops estimated to belong to the residential rental market – is being targeted by a Sydney-based solar group, which says the time is right for property investors to start benefiting from solar savings.

Prepaid Solar, whose Prepaid Meter utility technology is already being used around Australia in sub-meter solar projects for bodies corporate, says the local market has passed the tipping point where solar can make money for landlords, with discounts passed on to tenants.

The sub-metering system allows property owners to take over the retail power bill and charge the tenants a discounted rate – often a 5 per cent discount on the total electricity bill.

For tenants, the ability to monitor and manage their power usage gives them the potential to save between 10-15 per cent on electricity through efficiency, once the meter is installed. It also offers the benefit of lower and more predictable power bills.

Screen Shot 2014-08-20 at 2.13.52 PMAccording to Prepaid Solar, returns for investors above 20 per cent – or 40 per cent on some commercial sites – payback would occur quickly, leaving landlords with “free electricity” to sell to their tenants for the next 20 years.

“This is a way for landlords to participate (in distributed solar power generation) and get the benefits and still be able to provide their tenants with cheaper power,” said Prepaid Solar managing director, Vincent Selleck, in an interview with RenewEconomy.

“It’s just at that point where it works.

“Prepaid Metering allows more distribution of ownership with commercial benefits like depreciation and provides a great alternative to Power Purchase Agreements (PPA’s) being rolled out by large emerging solar retailers now.”

Selleck says the sub-metering approach is also ideal for use in granny flats, apartment buildings, community solar farms and eco-villages.

On Queensland’s Gold Coast, the Varsity Towers student accommodation building, which mostly houses students from the nearby Bond University, has installed 305 Prepaid Meters, allowing the building’s owners to cap their excessive electricity bills and make students more aware of their energy usage.

Once installed, the prepaid metering system ensures all owners or their tenants prepay for power before being supplied, resulting in an immediate improvement in the cash flow of the building’s body corporate. The sub-meters also obviate the need for meter reading services and the associated costs.

VarsityTowers

Varsity Towers

In Varsity Towers, Students prepay for a “fair allocation” of electricity, and a meter located in each apartment counts backwards from the credited amount, showing current electrical usage and the balance remaining.

The meter warns students when their credit is running low, giving them the option of cutting back on usage, or buying more electricity via phone, internet or at the building site.

Selleck is confident solar for rental properties is a big potential market in Australia, which he says is “way behind” the rest of the world on use of the sub-metering technology.

“This market for landlords … still creates a positive outcome, regardless of whether there’s a RET there or not,” he added, referring to the latest rumours that the Coalition is pushing for Australia’s Renewable Energy Target to be dumped altogether.

And, he adds, when cost-competitive battery storage becomes available, “you’ve got an automatic upgrade path.”

“Once we add storage to the system next year, a decentralised power production industry will flourish and change the way power is distributed and sold in Australia,” Selleck said.

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  • http://www.prepaidsolar.com.au Vincent Selleck

    Prepaid Solar is distributing through select solar partners and sales enquiries and more information is available at http://www.prepaidsolar.com.au.

  • JeffJL

    Sorry. This article is just an ad and should be declared as such.

  • http://www.prepaidsolar.com.au Vincent Selleck

    Thanks Jeff. Helping landlords and tenants benefit from solar energy and solve this rooftop void on investment homes and tenanted commercial is solving a big problem that exists in the solar industry. A real solution to that problem is newsworthy considering the scope for solar companies to benefit from a new market in times when subsidies are being wound back and jobs are threatened. Good for solar and good for property investors and tenants. Do you have a better working solution?

    • Neil Blanch

      Have you considered tapping into the public housing sector? Government supplied public housing would be a bit of a nightmare but I can see housing co-ops going for this in a big way. I’m a tenant in a co-op building and is love to reduce my carbon footprint and save a bit on the bills, and seeing the (eventual) profits go back into the public housing sector would be a big win for the cash strapped co-ops and their tenants…

      • http://www.prepaidsolar.com.au Vincent Selleck

        Hi Neil

        Thanks for your lead. I will investigate and see if we can get inroads here soon.

        • Neil Blanch

          I would try talking to the CEO of Bridge Housing (that’s my co-op) – he’s really approachable on this kind of stuff and they own/manage a large property portfolio in NSW. Hope it helps – if you need more details feel free to contact me.

          • http://www.prepaidsolar.com.au Vincent Selleck

            Hi Neil I just emailed him and will see how it goes.

  • Robyn May Johnson

    just looks like a good way for landlords to make more money. why can’t they just install the solar panels and let the people living in the house (and who are paying the landlord money already) take advantage of the savings? otherwise you are just helping the rich get richer and the renters are more beholden to them.

    • suthnsun

      Altruism in capital investment is almost a contradiction in terms, it is possible but not widespead. So if you want environmental benefits, and widespread cheaper power for tenants it is important to have a mechanism which provides an incentive to make the capital investment. If it works in practice ( and legally? ) it sounds like a good solution.

      • Dartigen

        But the landlord gets the increased value on the property (~5% increase in value from solar alone with no other improvements; and that could justify increasing the rent a little) and IIRC, in most solar arrangements the property owner gets the money from feed-ins so the landlord makes money anyway. The tenant just gets the nice side bonus of having no electricity bill at all – the landlord gets the actual money.

  • Miles Harding

    Please re-title this as “Solar for landlords”

  • http://www.prepaidsolar.com.au Vincent Selleck

    Tenants are offered a 5% discount on their current power bill and save an average of 10-15% from different independent studies, because they can monitor and manage their power use. The meter allows them to see watts used and experiment with appliances so they can change behaviours. It is a constant reminder of their power use and creates targets for saving on consumption. Once the landlord recoups outlay after 3-5 years, they can reduce the rate to tenants as a good will measure. They cannot charge more than retail price for electricity under exemption guidelines by the Australian Energy Regulator, so tenants will always get a net benefit, and we can now generate clean electricity on another 1.8 million roofs, that were previously financially unviable.

    The payment system has excellent access through SMS, Interactive voice response, 1300, and internet. Users can make payments and buy power anytime, anywhere they have phone or internet access. No coins involved!

    The largest proportion of property investors in Australia own 2 or less properties and two thirds of them are negatively geared. These are your mum and dad investors saving for retirement. They deserve a break and if they can make a little bit more money and also benefit their tenants it is better than supporting the fossil fuel industry that is working with the Abbott Government to close down investment in solar now.

    Even without subsidies this program makes money and remains viable, which is an important factor for solar companies who see this as their lifeline and future market if the RET gets abolished.

    http://www.prepaidsolar.com.au

  • Rachel

    Landlords ‘can’ offer discounted energy to tenants.. Having lived in the rental market for 25 years, and having seen many instances of less than ethical conduct; buildings that aren’t fit to live in, owners who will drop in to the property without notice/use it as storage/generally disregard tenancy legislation in the service of their own interest I very much doubt any such benefit will be passed on to tenants. There are certainly landlords who would but they are exceptional. I think the idea of renters benefitting from solar is a good one – this just isn’t it, there’s too much risk of exploitation.

  • Anchovie Milkshake

    As a renter, all we need is a solar power unit that is portable and can be transferred to the next house/unit when we move.