California Solar Energy Apartments: Virtual Net Metering Allows Energy Savings One Tenant at a Time

In California, residents at any, affordable or luxury, apartments can enjoy the benefit of solar powered electricity at their own apartment complex, without owning PV panels. This benefit is made possible by Virtual Net Metering (VNM). Although VNM is not a new thing, it has the potential to be the next big thing to expand solar on multi-tenant properties.

In the past, apartment owners could put a PV system on an apartment complex only to offset the electricity load of common areas or to offset tenant loads. Offset tenant loads for multi-family housing required separate PV systems and inverters for each tenant and this process was often very complicated and expensive. VNM has removed this barrier, allowing the distribution of energy from a single PV system among multiple meters, without requiring the system to be physically connected to each tenant’s meter.  

MASH Program Provides for Low-income Housing

As part of the California Solar Incentive (CSI), California provides PV incentives for multi-family affordable housing projects. The program, known as Multifamily Affordable Solar Housing (MASH), has a $108 million budget to provide incentives for PV systems to be installed on low-income multiunit housing.

For the MASH program, California started implementing the VNM tariffs allowing tenants to receive the direct benefits of solar as reductions in their monthly electric bills. According to the MASH Semi-Annual Progress Report, as of July 3, 2013 a total of 6,265 tenant units are being served by VNM tariffs.

Having installed 37 projects as of July 31, 2013, Everyday Energy is the second largest MASH project installer in California. It is also the leader in California on affordable housing VNM arrangements, completing over 200 VNM interconnections since 2010.

“VNM in affordable multi-tenant housing allows for the maximization of roof space to create one or a few solar arrays to benefit multiple meters, without the expense of interconnecting to every meter,” said Scott Sarem, CEO of Everyday Energy.

In July, the company, along with Trina Solar, won an Intersolar Award for its Park Villas project in National City.  The project is one of the largest multi-family affordable housing projects, generating 775,000 kWh annually for the 144 housing units and the common areas. Through VNM, 95 percent of the generated power from the 464-kW PV system is allocated to tenants — supplying nearly 100 percent of their usage — and the remaining 5 percent is allocated to common area electrical load.

Everyday Energy has just completed two solar affordable multi-family housing projects north of San Diego — Oak Knoll Villas and Hillside Village. The company installed a 139.12-kW DC PV system on the building roofs and parking canopy for the 52-unit Oak Knoll Villas and a 92.6-kW DC PV system on carports for the 71-unit Hillside Village. Equipped with the larger PV system, tenants at Oak Knoll Villas will be able to offset about 80 percent of their energy consumption while about 50 percent will be offset for tenants at Hillside Village.

Photo: Oak Knoll Villas by Everyday Energy

Sarem said, “VNM provides stability to the apartment property by allowing the housing operator and the tenants to know what their energy expense will be on a monthly basis and it also allows for a hedge against energy inflation.”

As of July 31, 2013, the MASH program had 304 completed projects, representing a total capacity of 19.3 MW (CEC-PTC). There are an additional 86 MASH projects in process, for a total capacity of 10.8 MW. Due to the popularity, the MASH incentive budgets has been exhausted for PG&E and SDG&E service territories.

Agnes Stupak, program manager of Self Generation Incentive Program at California Center for Sustainable Energy said, “Most of the MASH projects in the SDG&E territory are under the VNM tariff. The multifamily affordable housing sector will continue to use this (VNM) tariff to green their portfolios as long as the value proposition is there.”

Expanding VNM Availability

The VNM was originally only available for low-income multi-family properties in California, but in April 2011, the California Public Utilities Commission (CPUC) approved the expansion of VNM to all multi-tenants and multi-metered properties. In July the CPUC reported that as of March 2013, there were 24 non-MASH projects (a total of 0.9 MW) that use the VNM tariff.

“When VNM became available, we jumped right in” said Ross Williams, vice president of Home Energy Systems in San Diego. The company designed and installed a 338-kW PV system on Solterra, the first non-MASH multifamily apartment in California that utilities VNM and San Diego’s first net-zero luxury apartment. H.G. Fenton Company developed the “EcoLuxury” apartment, which opened in San Diego in May.

Home Energy System was originally planning on installing separate PV systems with micro inverters for each tenant, which would have been very tedious and challenging to fit over 100 small PV systems in the limited space of the property. When VNM became available, the company installed 1,380 solar modules on the roofs of four apartment buildings, mounted atop carports and ground-mounted on a slope at the property’s south end. The system generates 100 percent of electricity needs of the residents of the 114 units and common areas on the property.

Each resident at Solterra gets “allowance” on electricity consumption each month from the system that generates about 500,000 kWh annually. The allowance, or expected energy usage allocation, for each tenant was based on the analysis done by H.G. Fenton Company on its 3,100 apartment units in San Diego.  Williams said that each apartment tenant gets on average 250 to 350-kWh electricity allowance per month, depending on the square footage of tenant’s unit and roughly 20 percent of the total production is used for common areas such as for hallway lightings, gym equipment and appliances in the club house.

Solterra is also the first residential complex in the nation where tenants have instant access to their energy consumption via their smartphones. Williams said, “Each tenant is provided with the tools to track and manage their energy consumption.  They also know how much solar energy their system is producing.  It will enable them to learn about how energy is used and how it can be conserved.”

One of the great advantages of solar multi-tenant housing is education. Tenants at the solar apartments will learn and understand how they are using energy and how solar energy can help. “This is something they can take with them when they buy a new home or wherever they live,” said Williams.

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Junko Movellan is a Solar Industry expert who writes and analyzes the US and Japan PV downstream markets. She has more than 15 years of experience in the PV industry, analyzing industry trends and developing business strategies for global companies. She previously worked as a Senior Analyst at Solarbuzz and as a Market Development Analyst at Kyocera. She is based in California, USA.

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