Multifamily Solar Install Cuts Costs, Attracts Tenants
The company first installed solar hot water technology. These solar collectors, combined with the 1,200 gallon storage tank hold the preheated water and supplies the existing hot water heaters with water temperature above 125 degrees, and results in a significant reduction in energy consumption.
By utilizing the sun to heat hot water for apartment tenants, the complex is seeing natural gas savings greater than 60% for domestic hot water expenses.
The second installation is a 25kW photovoltaic roof mounted system. This part of the system will offset the majority of the common area electricity needs like pool pumps, laundry rooms, and common area lighting. Photovoltaic and solar thermal technologies form a complete model of sustainability in commercial real estate as well as increase tenant desirability.
The owner’s goal was to create a sustainable and environmentally friendly atmosphere for renters. The 112 module photovoltaic system combined with the 16 collector solar hot water system reduces property carbon footprint by 82.3 metric tons of CO2š offset per year and 2,059 metric tons lifetime. This is the equivalent to taking 14 cars off the road each year.
The solar photovoltaic system is scheduled to be commissioned by the end of June, 2012 and is projected to provide 41,805 kWh’s of first year electricity production. The solar hot water system is slated to offset more than 4,000 therms per year.
Gail Russell, who owns the building, and several more properties throughout Arizona and California says the key decision making factor was financial.”I hate paying utility bills, they keep going up. In addition, this captures a clear direction of carbon reduction while doing our part to protect our planet which should be on everyone’s agenda.”
Russell says he utilized rebates and incentives available for these projects to maximize the benefit. He says his strategy gives him an edge over other property managers. “Electric bills are a fixed cost, whether or not I have full occupancy, as are the night lighting and the manager’s office (including the AC). Even renovating apartments is not as good of a deal because I know I am going to be saving money on the electric bills even if I cannot rent the apartments. Most apartment investors elect to do apartment upgrades, and then try to make their apartments look snazzy enough to command high rents from young professionals. However, in tough times, or when a whole lot of new apartments get built, I will still be “making money” on the PV, (Solar Electric) while their apartments go begging for tenants or rents decline.”
The strategy can work in master metered properties. Russell explains, “With the hot water, I was able to turn lemons into lemonade. This is an older building that has central hot water heating. In tough times, I think that helped me get tenants but, realistically, many tenants tend to disregard the benefit of money they save on utilities. However, there are many benefits. By putting in the hot water, I was essentially able to offer this benefit free to my tenants. Also, I believe this system will be cheaper to operate and maintain than would be a system with 32 separate hot water heaters. It gets expensive to replace hot water heaters, and they go out fast in Phoenix’s water.”
“Every dollar I save in utilities, when multiplied by the current cap rate, makes my building worth X more dollars,” Russell explains. Cap rates normally fluctuate somewhere between 4 and 8. And these are solid, provable savings that are not dependent upon the current rental market.
Besides, he says, “Personally, I like having a “green” building.”
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