Lease my roof to a solar equipment owner?

[AndrewCohn]

Hi all,

I'm a residential property investor in Maryland and wanted to explore leasing my roof top to a third party solar equipment owner. My only gain would be a fixed lease payment from the equipment owner and the owner would get use of the tax credits, SREC's and the like. I have heard of these programs before but have found nothing on the internet about them. Can anyone point me in the right direction? Thanks.

[KRenn]

Hi all,

I'm a residential property investor in Maryland and wanted to explore leasing my roof top to a third party solar equipment owner. My only gain would be a fixed lease payment from the equipment owner and the owner would get use of the tax credits, SREC's and the like. I have heard of these programs before but have found nothing on the internet about them. Can anyone point me in the right direction? Thanks.

You're not leasing your roof to anybody, you are leasing the solar equipment itself. There are a variety of programs available throughout Maryland, Naptown is a poster here that could help you out, that is his neck of the woods, I'd try to get in contact with him. Also to lease solar equipment, you NEED to be the owner of the home and it has to be a full-time residence, it can't be a home you rent out to someone else or a vacation home or something of the sort.

[Wy_White_Wolf]

AC - I know Canada had a program like that. I also think Duke Energy was doing it only in North Carolina for a short time.

http://www.renewableenergyworld.com/rea/news/article/2009/05/duke-to-move-forward-with-distributed-generation-program

If anything like that is available to you, your power company would be the one to contact.

WWW

[Naptown]

You're not leasing your roof to anybody, you are leasing the solar equipment itself. There are a variety of programs available throughout Maryland, Naptown is a poster here that could help you out, that is his neck of the woods, I'd try to get in contact with him. Also to lease solar equipment, you NEED to be the owner of the home and it has to be a full-time residence, it can't be a home you rent out to someone else or a vacation home or something of the sort.

You can lease a system as long as you personally are the owner of record and the property is not held in a trust. (Suncap allows this)

Now for the bad news.
You would be leasing the equipment and making lease payments. The only way to make money at this is to install a separate meter to meter the output of the solar and charge the tenants for the electricity essentially turning yourself into a utility.

[KRenn]

You can lease a system as long as you personally are the owner of record and the property is not held in a trust. (Suncap allows this)

Now for the bad news.
You would be leasing the equipment and making lease payments. The only way to make money at this is to install a separate meter to meter the output of the solar and charge the tenants for the electricity essentially turning yourself into a utility.

I expect that to change, just as SunCap allowed a waiver for monitoring for a long time, that is now gone as they are more strictly following the Treasury stipulations. The ITC guidelines strictly allow for someone who is a permanent resident at the address which is why other leases are demanding to know who resides at that address to not jeopardize their tax credit.

[AndrewCohn]

AC - I know Canada had a program like that. I also think Duke Energy was doing it only in North Carolina for a short time.

http://www.renewableenergyworld.com/rea/news/article/2009/05/duke-to-move-forward-with-distributed-generation-program

If anything like that is available to you, your power company would be the one to contact.

WWW

This is exactly what I am looking for! I found a few more articles through random links on that site for you guys to read up on:

http://www.businesswire.com/news/home/20090107006159/en/SunEdison-Announces-Largest-Solar-Distributed-Generation-Program

http://www.sunedison.com/wps/portal/memc/business/realestate/

Now I need to see if anyone in Maryland is interested in a project like this on a much smaller scale then an entire REIT portfolio. Thanks for the help.

[russ]

If someone wants to place a solar PV system for commercial sales I can not understand why they would rent a roof - the only reason to use a roof is it is the best place most homeowners have available. Much better to rent a section of cow pasture.

[Naptown]

If someone wants to place a solar PV system for commercial sales I can not understand why they would rent a roof - the only reason to use a roof is it is the best place most homeowners have available. Much better to rent a section of cow pasture.

Because the cost for installing on a roof are much lower per watt than in a cow pasture. Large roofs also tend to have below them buildings with electrical services in them which makes connection to the utility easier and less costly and don't require fencing.

[russ]

Because the cost for installing on a roof are much lower per watt than in a cow pasture. Large roofs also tend to have below them buildings with electrical services in them which makes connection to the utility easier and less costly and don't require fencing.

Wow - and to put up anything of any size you need a hundred roofs with 100 contracts and locations plus much more equipment - make that much, much, much, much more equipment. Any maintenance would go from simple to a real headache.

Not to mention that very few roofs are actually in the optimum orientation.

No way anyone with business sense is going for roofs unless they own those roofs or the government decides to throw a few billion dollars off the back of the truck.

[Naptown]

how about 4 MW

http://www.solarworld-usa.com/solar-for-business-and-government/project-gallery/commercial-solar-projects/avidan.aspx

[russ]

How about the OP, ''I'm a residential property investor in Maryland and wanted to explore leasing my roof top''

A decent flat roof on a warehouse or similar commercial property could be useful.

A home roof would be hopeless as a business model.

[MikeG]

I expect that to change, just as SunCap allowed a waiver for monitoring for a long time, that is now gone as they are more strictly following the Treasury stipulations. The ITC guidelines strictly allow for someone who is a permanent resident at the address which is why other leases are demanding to know who resides at that address to not jeopardize their tax credit.

SunCap - now NRG Sunlease - puts a monitor on the system as a means for them to oversee the system. I think every leasing company must since having production monitored is also an ITC requirement. They typically do give access to the homeowner though.

From what I have heard, NRG is open to rental properties for installation sites.

[Naptown]

How about the OP, ''I'm a residential property investor in Maryland and wanted to explore leasing my roof top''

A decent flat roof on a warehouse or similar commercial property could be useful.

A home roof would be hopeless as a business model.

I already addressed those difficulties in a previous post

[Wy_White_Wolf]

This is exactly what I am looking for! I found a few more articles through random links on that site for you guys to read up on:

http://www.businesswire.com/news/home/20090107006159/en/SunEdison-Announces-Largest-Solar-Distributed-Generation-Program

http://www.sunedison.com/wps/portal/memc/business/realestate/

Now I need to see if anyone in Maryland is interested in a project like this on a much smaller scale then an entire REIT portfolio. Thanks for the help.

The only ones I have heard doing this kind of a program or the power companies. You would need to contact your power company to see if anything is available.

WWW

[servant74]

interesting

As someone who is currently a 'renter' but in a TVA served area (think .085/kwh) it looks like the leasing of large space makes sense commercially, but residential roofs, are like the 'solar craze' back in the Carter years. The mfgr/installer/financer make the lions share of the $$, and the end users winds up being the end consumer. As a customer YOU are in charge of your checkbook, not the sales droid.

Back then I lived in Houston (non-TVA but regulated power era) and a solar hot water heater made $ and sense. But only after a large utility and federal energy rebate, and calculating the future cost of money over the estimated lifetime including continuing maintenance expenses, the payout was negligible over the estimated unit lifetime. We did it and enjoyed the solar hot water, but it was a gadget and we knew we were buying it because we are both gadget freaks.

BTW, I did almost throw a sales droid out on his ear when we started running numbers, and he just blew off the concept of calculating the future value of money (making estimates about non-risked income, risk involved, estimates of inflation and financing, estimates of opportunity costs, and other such ouji board financial calculations). So if some sales droid drives you hard to make a decision in a short time, ignore them and toss them out if they get to insistent. There is always another sales droid around for another company. No one company is the only game in town, and if they are, that raises a red flag to me that I might not want to play. (Just because you are paranoid doesn't mean they are NOT out to get you!)

We also had power that was $0.12/kwh, all electric home (with gas, it would not have even broken even over its life). And by the time the unit was needing maintenance, the units were not being made anymore, and the initial company had flown the coupe.

We got our money out of it. It served us well. It broke just after its 'break even' point, and could not be repaired. About then we needed the roof replaced, so it came down then without extra expense.

Now that was then, and this is now. But I drive spread sheets pretty hard modeling the economic scenarios. I suggest others do the same. Also, just because it doesn't make money, is not a reason to not do the project, but understand it before you get into it. It may eat your 'toy' or 'entertainment' money for quite a while.

Sorry for the pontificating.