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