What is Community Solar and How Does it Intersect with Commercial Real Estate?

What is Community Solar and How Does it Intersect with Commercial Real Estate?

Business Opportunity and Community Impact

For commercial real estate owners with rooftops suitable for solar panel installations, there are two primary income opportunities:

"Behind-the-Meter" On-Site Use:

This option involves installing solar panels to directly serve tenants and on-site operations. It provides clean power, reduces utility expenses, and helps current and future tenants meet their sustainability goals.

"Front-of-the-Meter" Community Solar:

With this option, the clean power generated by the solar panels is fed into the electricity grid. Multiple community members can then purchase this energy, often at a discounted rate, without needing to control the site.

While both options provide substantial roof rent for landlords, let's focus on Community Solar or "Front-of-the-meter" for this article.

What is Community Solar?

Community solar is a renewable energy initiative designed to provide the benefits of solar power to individuals who cannot install their own systems. This includes renters, tenants of commercial properties, and those in industrial areas. Many people are eager to take advantage of the cost savings and sustainability of solar energy but lack the ability to install their own systems for various reasons.

Through community solar programs, these individuals can subscribe and purchase energy produced at offsite locations, such as those developed by our team at Tandem Infrastructure. This setup benefits everyone involved: communities receive affordable, sustainable energy, and property owners can boost both their rent roll and property values.

Benefits for Property Owners

Commercial property owners can fully leverage the benefits of solar energy by partnering with Tandem Infrastructure to install an onsite system. Unlike traditional solar purchases, where the owner bears all costs, at Tandem, we cover all installation, maintenance, and operational expenses. We establish a solar program on your commercial roof without any hassle or additional responsibilities for you.

Tandem Infrastructure essentially becomes a new tenant, leasing your roof space and managing all aspects of the solar program's installation and operation. We provide a consistent monthly rent for the used roof space, with amounts increasing annually at a pre-set rate based on the system's square footage.

Recalculate NOI and Property Value

The long-term rental income from having Tandem Infrastructure as a tenant on your roof positively impacts the building’s net operating income (NOI) and overall property value.  

This agreement functions like any standard tenant lease—it's straightforward and guaranteed for 20-25 years depending on state and utility program guidelines. During this period, we generate clean energy and supply power to people enrolled in a community solar program at reduced rates while simultaneously paying monthly roof rent to the landlord.

The Bigger Picture

Community solar projects are a powerhouse for promoting sustainability. They accelerate the adoption of renewable energy, significantly reduce greenhouse gas (GHG) emissions, and decrease our reliance on fossil fuels, which are major contributors to climate change.

For property owners, these projects offer more than just environmental benefits but they also make great business sense. You can generate additional revenue while contributing to a healthier planet and expanding clean energy access to a broader community. It's a meaningful way to make your property work for you and the world.

For community solar subscribers, the benefits are substantial. Subscribers gain access to clean, renewable energy often at a discounted rate. They can lower their electricity bills and reduce their carbon footprint without the need to install their own solar panels. This makes solar power accessible to renters, tenants of commercial properties, and those in industrial areas who otherwise wouldn't have the opportunity.

By integrating community solar into your commercial real estate strategy, you not only enhance your property's value but also play a pivotal role in the global shift towards sustainable energy. Partner with Tandem Infrastructure and be a part of the clean energy revolution today!

Contact us today to learn more!