February 14, 2024

The Multifamily Property Guide to Reducing Solar Panel Installation Costs

9 Min. Read

Millions of Americans live in multifamily communities across the country, and with a rising interest in technology and sustainability, many renters look to their building and property managers for more energy-efficient and tech-savvy solutions in their homes.

Building electrification and the implementation of renewable energy or energy transition technologies are growing trends in the multifamily sector that meet the desires of these residents while also providing incredible benefits to the community and property owners. Besides creating unique perks for tenants, these investments lower operating costs linked to energy usage and position a community as a sustainability and technology-forward leader within their community.

Solar is one of the most cost-effective ways of powering multifamily buildings with a clean and resilient source of energy that can keep the community running even during inclement weather or energy outages. As a property owner or manager, you can maximize the benefits of going solar by implementing the right strategies to reduce the cost of your solar panel installation project.

In this article, we explore how property owners and managers can reduce their solar panel installation costs while also creating a long-term opportunity for savings and maximizing the profit of their investment.

Site Assessment and Planning: Maximizing Efficiency

Not all locations are created equal when it comes to solar energy generation. Having an expert assess your property’s solar potential is a key step in planning your project.

Keep in mind that while many properties install solar panels on the roofs of their buildings, solar panel installation in non-traditional locations such as parking lots can also be a wonderful option depending on the layout of your property.

A professional can look at factors such as solar irradiance, shading, roof pitch, and orientation and recommend the best location and angle to maximize exposure to sunlight. They can also identify trees and any other obstacles you may need to eliminate to ensure your solar panels are receiving optimal sunlight for maximum output.

Most solar panels have an efficiency rating that exceeds 20%. You won’t be able to unlock this full potential, however, unless you optimize your solar panel installation project with a thorough site assessment to determine the best solar installation location on your property.

Working with a professional can also give you a better idea of how much energy you can expect to produce and how many panels you will need to power your multifamily property.

Group Purchasing and Bulk Discounts: Strengthening Bargaining Power

As a multifamily property owner or manager, you can also look into additional savings on materials with group purchasing.

For solar panel manufacturers, making a large sale is appealing and you can use this as an opportunity to reduce your upfront costs for solar panel installation. Combining your order with other buyers or even purchasing for several properties at a time can give you leverage for negotiating lower prices on panels, mounting systems, batteries, and more.

If you own more than one rental property, consider upgrading several properties simultaneously to get a bulk discount. You can also partner with other landlords in the area to place a larger order.

Financing and Incentive Programs: Capitalizing on Financial Opportunities

On average, you should budget between $0.80 and $1.80 per watt for your solar panels, but by negotiating panel costs for bulk buying and ensuring your solar panel installation qualifies for any available incentives, you may be able to significantly lower these costs. Typically, the solar panel costs will average around 40% of your total installation costs.

Labor costs will also play a role in your solar panel installation and will typically be around 25% of the total cost of your installation project, while additional components for installation such as mounting structures, inverter, cables, and wiring will make up about 35% of your installation costs. These averages can vary depending on your solar panel installation, location, and other factors, but your licensed installer can discuss specific options and costs based on your property needs.

Financing the panels is another consideration to help offset the initial price of your solar panel installation. A professional installer can usually put you in touch with lenders, but you can also shop around with different financial institutions to compare rates. Some lenders even offer solar loans with lower rates to support sustainability and electrification projects.

As a multifamily owner or manager, you should take advantage of relevant incentives. You can claim the Investment Tax Credit as a business or choose the Production Tax Credit to earn credits over time based on your panels’ output.

If you live in one of the units for at least part of the year, you can qualify for the residential versions of these credits.

There are more incentives to explore at the state, municipal, and utility levels. These programs range from property tax exemptions to rebates on equipment. If your utility provider offers a net metering program, you can sell any surplus energy your solar panels produce for energy credits and greater savings for your multifamily property.

Technology and Panel Selection: Balancing Cost and Performance

Over the past six years, the nationwide solar capacity has more than tripled. New projects account for a significant portion of this growth, but it’s also worth noting that solar arrays are becoming more performant and producing more watts per square foot.

We recommend taking advantage of the latest technologies to modernize your multifamily property. While purchasing cheaper solar panels can lower the upfront cost of your project, your solar panel installation will likely not create the value and return on investment (ROI) you were hoping for in the long term.

A professional solar installer can help you review your options and recommend the best panels for your needs. Things to consider include overall quality, warranty, and the manufacturer’s reputation.

You should also look at panel ratings and expected output, panel size, and temperature coefficient. The temperature coefficient is especially important if you live in a warm area since it can indicate a drop in performance as temperatures rise.

Streamlined Installation Processes: Minimizing Disruption

Your solar panel installation project should begin with a solar site assessment. You can then start planning for the project, have your installer pull any necessary permits, and do some site prep if needed. Always ensure you communicate the stages of your solar installation project with your residents with enough time for them to plan accordingly for any noise or other disruptions.

The installation itself should only take a day or two per building or solar panel location, based on the size of your solar array and the efficiency of your solar panel installers. The final step is to schedule an inspection with your municipality.

It’s best to work with an experienced solar installer who can plan every step of your multifamily electrification project and manage expectations. You should also keep tenants informed of the timeline and provide timely updates as things progress.

Disruption should be minimal, but your tenants might have to go without power for a few hours if your electrification project requires a panel upgrade for your multifamily building. Planning ahead can help prevent this from causing any major disruptions for your employees and your residents.

Maintenance and Monitoring Systems: Long-Term Cost Management

As a multifamily building owner or manager, a solar array is an asset that you need to monitor and maintain to maximize its value throughout its lifespan. Solar panels last an average of 25-30 years before they need replacing so maintaining your solar panels will ensure your panels continue to perform throughout that time.

Routine and regular maintenance represents an ongoing cost for your solar panel installation, but the alternative is a lower ROI with a loss in efficiency and energy output.

Don’t wait for your solar array’s performance to suffer before taking action. By being proactive about maintenance with regular cleaning and inspection and having a professional clean and inspect your panels at least twice a year, you can ensure the longevity of your solar panel installation and maximize your ROI for years to come.

You can also invest in a smart energy management system to monitor your panels’ output closely and track changes in performance that may indicate a need for repairs or replacement. If you pair your solar panel installation with battery storage and a smart electrical panel, your smart electrical panel can also alternate between available power sources such as solar energy, stored energy in the battery, and energy from the grid.

Working with a solar installer who offers a maintenance plan is the best value for managing long-term costs and can ensure that you have a dedicated team able to provide immediate resolutions if there are any issues or urgent maintenance needs.

Community Engagement and Shared Benefits: Reducing Individual Costs

Solar panel installation is a project that can create a sense of community among tenants. You can even adopt a community-based financing model where tenants form a solar cooperative and share ownership of the renewable energy assets.

A possible alternative is to retain ownership of the solar panels and allow tenants to use clean, renewable energy via a subscription model. Alternatively, some landlords are opting for a flat monthly fee while others calculate individual usage fees based on how much power each unit draws.

Depending on the size of your solar array and the needs of your community, you might consider a smaller electrification project to power community spaces such as various amenities, the leasing office, EV charging stations, or even lighting around the buildings. Alternatively, a larger electrification project can be used to power the entire community and either fully or partially offset energy usage from your residents.

Create an open dialogue with tenants early in the planning process to assess interest and identify the billing, ownership, and application models that make the most sense for your property.

You can also create more value for your tenants by exploring additional electrification projects. With less than 5% of apartments and office buildings offering EV charging, using solar energy to power an EV charger can be a perk that sets you apart.

Other projects include upgrading your multifamily building with electric heat pumps or electric HVAC systems powered by solar energy.

Plan Your Multifamily Solar Project With Qmerit

Solar panel installation has many benefits for multifamily properties, including lower energy costs, independence from the grid, and a greater sense of community. It’s also a great way to attract tenants who care about sustainable living.

As a property manager or owner, it’s imperative to consider the costs and benefits of any project, especially solar panel installation. Solar panels are an investment, but you can take a strategic approach to reducing the initial cost and maximizing the savings and other benefits for everyone involved.

From choosing the right panels to selecting the most affordable financing option or taking advantage of incentives, strategic planning will make your project more cost-effective.

Qmerit can help you invest in a sustainable future with its nationwide network of certified electricians. As the country’s largest and most trusted network of certified installers for energy transition technologies, we have completed over 53,000 solar integration projects and are here to make your electrification journey seamless.

Contact Qmerit today to learn more about which cost-effective solar solutions can be adapted to fit the unique needs of your multifamily properties.