Who pays the electric bill?

If tenants currently pay for utilities, you need to check your lease agreement. Is there a clause in the lease to allow charging tenants for electricity? If not, you will need to either amend the lease, or create a separate power agreement for selling solar power to your tenants. For more information on how to negotiate a power agreement with tenants for solar, see our recent blog post:

Triple Net (NNN) Leases and Commercial Solar

Is the tenant paying the ongoing utility bill after solar is installed?

In order to have the tenant pay fair market value for the solar credits offsetting their local utility bill, E3 can recreate a bill for just the solar production. The tenant continues to receive a monthly bill from the local utility company, and receives a 2nd E3 bill for the solar value from the property owner.

What is fair market value for a solar credit? We calculate the value of a solar credit by taking the total bill that the local utility company would have charged for electricity if no solar was installed, and subtracting the ongoing electricity bill, applying an optional discount, e.g.:

Solar Bill = (Total Bill - Ongoing Bill) x Discount

Are you (the owner) paying the ongoing utility bill after solar is installed?

Taking ownership of the tenant’s meter has the following advantages:

1. Delayed payment for owner. Property owner pays the ongoing local utility bill yearly. Tenant pays the E3 bill monthly, thus giving additional cash flow to the property owner until the “true up” date. The tenant continues to pay for electricity consumed just as before the solar system was installed.
2. Tenant pays one E3 bill monthly, instead of 2 bills (see Is the tenant paying the ongoing utility bill? above).

Disadvantages:

1. Property owner is responsible for the electricity bill. If a tenant doesn’t pay their electricity, then the property owner is responsible for collections and/or disconnecting the power due to lack of payment.
2. Since the property owner is billing for power, a separate power purchase agreement, or amendment to the current lease may be required.

E3 Billing Solar Service

E3 recreates the bill that would have existed if the entirety of the electricity was provided by the local public utility. After installing solar, tenants continue to receive a monthly E3 electric bill, just as they did before the solar system was installed.