How One Vendor Is Helping Multifamily Cash in on Electricity

Solar energy generation on buildings can become an important financial factor for multifamily owners, developers, and operators. Which is a good thing for them, because in many important metros, an increase in supply has meant falling rents, particularly in higher-end buildings.

A new example is PearlX, which advertises that multifamily properties can increase NOI and meet ESG goals with “no-cost solar, storage, and other electrification amenities.” The company provides turn-key solar systems in California and Texas for no cost and leases the necessary rooftop space. They provide electric to the tenants, who then pay PearlX for electric, presumably at lower cost than the existing suppliers. Excess power can be sold back to grid operators during peak demand times.

The revenue stream can last 30 years, according to the company, “as well as a higher value on the property, leading to easier financing.” PearlX recently worked with smart energy firm SolarEdge Technologies on a project in Houston that started in 2022. The companies claim that the renters reduced metered energy use by $60 a month and didn’t lose power during two grid outages for a total of 10 hours with on-site batteries.

The model is interesting and seems like one that could work in many parts of the country, assuming the availability of a financing mechanism to support the equipment and installation. This is just one approach out of a number of developing ones.

There are also energy-as-a-service, or EaaS, projects that deploy IoT devices, using the data to improve energy efficiency, again without up-front investment by the building owners.

“Energy-as-a-service (EaaS) is a business model whereby customers pay for an energy service without having to make any upfront capital investment,” says non-profit research institution Resources for the Future. “EaaS models usually take the form of a subscription for electrical devices owned by a service company or management of energy usage to deliver the desired energy service.”

Last year, Texas-based company Amperage Group, “backed by a number of large Dallas family offices,” planned to invest in electric vehicle chargers at multifamily developments, paying for construction costs and charging equipment. To date, electric vehicle chargers in shared spaces have tended to be non-designated access. A parking lot will have perhaps a handful of spots with charging equipment. When it comes to charging outlets, the term “designated charging spots” has tended to mean parking spots intended for any EV and not to be used by conventional internal combustion vehicles. The more broadly available charging is for residents, the greater a draw it becomes, as government regulations push for an increased use of EVs.

Expect more business models that involve electric delivery through multifamily properties, with a benefit for the building operators.