How you can earn 20 years of passive income and get paid to host solar!
As a property or business owner, there are many things that demand your attention, but your roof is usually not one of them. You have payroll to make, inventory to manage, and given the upheaval caused by a pandemic, critical decisions to consider that will ensure your business remains viable. In these unprecedented times, what if there was a way to unleash a new revenue stream for your company, that would allow you to be more resilient and more profitable? The solution is right above your head.
In my previous article, we introduced the Massachusetts SMART program, a state-approved clean energy policy responsible for rapidly deploying solar projects across the state. In Eversource, National Grid of Unitil territory, one aspect of the program allows for a solar roof lease. This type of lease allows a solar developer to pay the business owner to lease their roof in exchange to host a solar array. Known in the industry as a Feed-in-Tariff, businesses can maximize their available roof space (or parking lots for solar carports or unused land for ground-mounts) to host a solar array that distributes its energy onto the electricity grid. Most simply put, these two factors allow business owners to lease their roof as if it were commercial real estate.
Business owners do have the option of owning the solar array that would be occupying their roof. If that were the scenario, the owner would receive 20 years of fixed income from the utility (10 years for small systems below 25 kW). However, that would also mean a business owner would first have to buy or finance a solar array to earn this incentive income. Additionally, they would need to ensure proper operations and maintenance procedures to receive the optimum output of their array. If an owner does not want to have to worry about the solar array, there is an even simpler option, a solar roof lease.
By leasing their roof to a skilled contractor through the Massachusetts SMART program, the building owner receives 20 years of guaranteed, fixed income. Moreover, because the business owner is not the system owner, they do not need to worry about operations and maintenance, and they do not need to wait for a return on investment. Once the solar array is constructed, the business owner collects lease payments from the system owner.
For example, a smaller solar project of around 125 kilowatts (kW) hosted on a 16,500 ft² roof in Eversource utility territory, could result in a lease rate from Pivot of $30,000 per year. Over the 20 years, the building owner can expect $600,000 additional revenue without investing any money in the project. If the property is larger and can fit a more significant solar array, the payout can increase considerably. For example, a 390 kW solar project hosted on a 35,000 ft² roof in National Grid utility territory, could result in the lease rate from Pivot Energy of $65,000 annually. Over 20 years, the business would gain an extra $1.3 million! Of course, many factors inform the exact amount of the roof lease payment a solar developer can offer beyond just the size of the building’s roof. The precise amount of the payment depends on several variables, including the size and condition of your roof and the local electric grid’s ability to absorb the power produced on your site. Additionally, as mentioned before, the SMART program is only available to building owners in Eversource, National Grid, and Unitil utility service areas. It is also a declining Block Program, which means that the rate the utility pays the system owner declines once certain capacity thresholds are met. For the building owner, this means the longer businesses wait to participate, the more likely the value of energy and the subsequent lease rates will be lower than the projections detailed above.
Massachusetts building Owner?
Earn Money From Your Roof with Pivot
The payment scenarios above, ranging from half a million to 1.2 million, showcase what Pivot can offer businesses to host a solar project on their facility in the near term. The result of a fixed and guaranteed income for 20 years translates into increased Net Operating Income for your business, with no upfront investment. Solar roof leases offer companies a way to effectively monetize an otherwise unused asset — roof space. To capitalize on these programs, business owners who want to easily add a guaranteed revenue stream over the next 20 years should look into this program while the rates are optimal.