Allume Energy recently announced the successful deployment of its initial U.S. shared solar energy technology and plans to bring its SolShare solution to all apartments, in particular within low-to-moderate income (LMI) communities across the U.S. By allowing multi-family buildings, including renters, to access the benefits of solar energy, Allume’s innovative technology could unlock widespread rooftop solar and provide a solution to energy equity. Given rising energy costs, growing concerns about climate change, and growing disparities in energy burdens, Allume’s SolShare could be the key to proliferating solar power adoption.
The number of U.S. homeowners who have installed solar panels has doubled since 2016, and 86% of Americans say they would welcome rooftop solar in their community. This is no surprise given that self-generated solar energy is one of the easiest solutions for standalone homeowners to reduce their energy bills, access renewable energy, and increase resilience to blackouts. Yet apartment owners and renters, who are more likely to be LMI earners, have historically been unable to access solar energy due to financial and technical considerations.
According to NREL, LMI households represent 42% of the U.S. population, and the U.S. Department of Energy notes that “low-income households face an energy burden three times higher than other households.” Additionally, NREL states that solar generation can technically meet most electrical consumption in the U.S. if we include renter-occupied and multi-family housing, given solar penetration and available roof space. This means that deploying solar on apartments could aid substantially in resolving energy equity.
Finally, this empty space in the solar market can transform. At a time when LMI households, especially those of minorities, bear an outsized energy burden, the arrival of SolShare technology from Allume offers a first-ever chance for tenants to enjoy the financial benefits of solar from their own rooftops while landlords simultaneously receive help on their bottom lines. Other rooftop solar options exist for multi-tenant facilities, but they are cost prohibitive and excessively complex to install. Only SolShare delivers simplicity, efficiency, equity, and clear financial benefit for all parties.
Why Today’s Multi-Tenant Solar Struggles
Imagine a solar panel array on an apartment building roof. The array collects energy and pipes it down the building to an inverter, which then feeds into — what exactly? This is the beginning of the problem. Energy must go into a grid meter, which then provides electricity to an area within the building. The building owner can deliver that energy to a common area (lobby, gym, etc.) and thereby offset the building’s energy consumption. This benefits the landlord but does not directly benefit tenants.
Alternatively, the solar energy could be sent to one or more apartment meters, but this introduces other challenges. How should the energy be divided? What if a tenant goes on prolonged vacation or moves out, leaving the space vacant? The results are inefficient at best. Inefficiency (and cost) compounds if the building has multiple solar arrays servicing multiple inverters, each tied to its own meter.
Multi-tenant building solar installations typically fall pretty to the “split-incentive problem,” wherein a building owner may pay to install a solar energy system, but tenants would derive the monthly economic benefits of using that solar power. The landlord can charge a fee to tenants and seek to recover the solar costs, but this is often a lengthy, contentious process.
Alternatively, families or landlords can turn to “social” or “community” solar options, in which participants can collectively invest in a shared, off-site solar energy system. Participants typically receive credits on their energy bills for the electricity generated by their portion of the solar array. Social solar projects can benefit the environment and the local community, as they promote clean energy and can create economic opportunities, but they come with key drawbacks.
The value of energy produced by a social solar farm depends on several variables, but the paramount concern revolves around how much the local power utility will pay for that energy. (This also applies to “net metering,” in which a building could sell some or all of its generated solar energy back to the grid.) Specific numbers can vary widely, but assume that it costs 20 cents per kilowatt-hour (kWh) to consume electricity from the grid. The utility may only pay 7 cents per kWh from private entities for solar power. Regulations and policies may only mandate a “fair rate” for power fed back to the grid. “Fair” is open to interpretation, and broad pricing disparities are common. Thus, the credit offered to social solar participants by the utility may significantly undervalue the actual power generated. For this and other reasons, the rule is that the closer the electricity consumer can be to the point of generation, the better.
SolShare: Eclipsing the Alternatives
Again, recall that rooftop solar array, and let’s use the analogy of water, a hose, and buckets. If the energy flowing from that rooftop array is water, and the wiring from the building’s inverter to its meters is the hose, and each meter is a bucket, then you can imagine that hose trying to distribute water. The simplest approach would be to spray every bucket at once. As noted above, though, this approach presents many issues and inefficiencies, including an inability to adapt the spray to changing conditions.
Allume’s SolShare is installed on the building between the inverter and the grid boxes. You could think of it as a smart sprinkler. The SolShare sends water to each bucket in turn, moving between the buckets several times per second. In cases when the SolShare is configured with limits for each tenant, if one bucket reaches its limit, then the incoming water/energy is allocated to the remaining buckets. Any “overflow” from all buckets being full could be sold back to the utility grid.
SolShare’s flexible software lets tenants monitor their clean energy use while landlords can set rules for how solar energy should be used in the building. For example, a landlord could allocate 50% of the solar power for common areas (thus reducing the building’s energy bill), then share the remaining 50% among tenants (reducing their energy bills). If a tenant moves out, their allocation could be divided among the remaining tenants.
“As an apartment renter, I see the SolShare as a game-changer for equitable solar energy access and decarbonization of the built environment,” says Allume executive account manager Mel Bergsneider.
Several elements of the SolShare are patent-protected. The solution marks an industry first that opens up solar adoption previously infeasible if not impossible to develop. Unlike social solar, SolShare provides solar energy at the point of generation rather than principally exporting power back to the grid. Additionally, SolShare solves the split-incentive problem, because tenants and landlords can divide the energy benefits, allowing owners to recoup their investment more quickly without resorting to onerous tenant fees. Alternatively, landlords can charge a modest monthly access fee to use the SolShare system and turn it into an additional revenue stream.
Note that there have been efforts at the federal level to promote the use of solar energy in the U.S., such as the Investment Tax Credit (ITC) and the Solar Energy Technologies Office (SETO), which provide funding for research and development of solar energy technologies. Incentives from these efforts can further enhance the affordability and ROI of solar energy systems, including those with SolShare integration.
SolShare allows building owners to use solar as a cost-saving incentive for tenants, not just a social incentive, while also using SolShare’s software to provide energy use data that can help with ESG reporting. This reporting may be particularly helpful in markets like Los Angeles and New York, where there is increasing demand for buildings with lower carbon footprints. Landlords that install the SolShare can also receive solar investment tax credits. According to Allume, “buildings with lower utility bills have 3% to 7% higher occupancy rates,” thereby helping increase the building’s asset value.
SolShare Dawning Across the U.S.
According to the U.S. Department of Energy, 25% of all American families suffer from high energy burdens. Affordable clean energy has been out of reach for renters for a long time, which makes Allume’s SolShare solution a desperately needed game-changer.
Aliya Bagewadi, director of US Strategic Partnerships at Allume Energy, says, “Our product is trying to maximize solar consumption within the building. We’re not trying to send solar back to the grid in exchange for credits. We’re trying to get tenants to consume rooftop solar directly, and that has historically been extremely rare.”
Allume was founded in 2015 in Melbourne, Australia, and is now expanding into the U.S. and U.K. The company’s first deployments in the U.S. were last year in Orlando, Florida, and, most recently, in Jackson, Mississippi. In its Orlando deployment, SolShare eliminated the equivalent of 1800 pounds of CO2 emissions and saved each building tenant $242 in electricity per year. SolShare now runs on over 1500 apartments, with demand booming around the world.
In short, Allume’s SolShare:
- Provides a unique solution to the split-incentive problem
- Allows renters to leverage solar energy to offset their monthly energy costs, benefitting LMI renters in particular due to their higher energy burdens
- Offers asset owners a way to increase a) the value of their multi-family buildings, b) visibility into consumed/exported solar energy for Energy Use Intensity (EUI) tracking, and c) savings on their own energy bills by using solar energy in building common areas
- Provides a flexible software platform for landlords to adjust solar energy allocations both dynamically and with rules-based automation
- Scales transparently if/when asset owners add additional solar panel to their buildings
Allume plans to expand its reach into the U.S. market, progressing from the South to the Midwest, then the Northwest and Northeast. As the Orlando and Jackson deployments show, Allume is already aiding U.S. expansion into a brighter, cleaner, more sustainable future.
About Allume Energy
More than 15 million people in the U.S. live in low and medium rise apartment buildings, with roof space for solar but no way of accessing it. Allume has developed a world-first technology, SolShare, which enables fair sharing of solar energy from a single rooftop solar PV system amongst multiple dwellings within the same building. This breaks down the technical and ownership barriers that have historically prevented apartment residents from accessing cheaper and cleaner energy from the sun. With an established market in Australia, Allume is now growing rapidly in the UK and the U.S. For more information, visit www.allumeenergy.com.