Adobe Stock/ nd700

Visit any new single-family neighborhood today, and it’s easy to see the photovoltaic panels on the roofs of houses soaking up the energy—and limelight—of being green, while steadily making headway toward the holy grail of “net zero” construction, producing as much energy on-site as they consume.

But in the taller buildings that make up multifamily housing, progress toward offsetting apartment communities’ energy use hasn’t been as easy to achieve—or see.

“Solar in multifamily is a lot less obvious, because the roof tops are higher off the ground,” says Ann Edminster, treasurer of the Richmond, Calif.–based Net-Zero Energy Coalition (NZEC), which tracks net zero housing inventory in the U.S. and Canada.

But new data suggests multifamily’s day in the net zero sun may finally be dawning. According to NZEC’s latest report, multifamily now accounts for 58% of all net zero units in the U.S. that are complete, under construction, or in the design phase.

There are now 7,234 multifamily units on the path to zero, compared with 5,256 single-family units. “Multifamily now represents more than half of the zero energy housing units in our inventory,” Edminster says. “It’s a big player in all this.”

Meritage Homes’ CitySquare in the Irvine Business Complex is Southern California’s first net zero energy townhome.
Courtesy: Meritage Homes Meritage Homes’ CitySquare in the Irvine Business Complex is Southern California’s first net zero energy townhome.

A Long Time Coming
Multifamily’s path toward net zero has been held back by the so-called “split incentive,” where developers and owners pay for putting in photovoltaic panels, while residents enjoy the benefits of lower energy bills. “The tenants that pay the bills aren't the ones who make the decisions about the building,” says Shanti Pless, senior research engineer at the Colorado Springs, Colo.–based National Renewable Energy Laboratory.

Roof space and metering create other issues.

In taller, denser buildings, stringing together enough panels to meet a building’s energy load is a big challenge, while metering the panels for each unit adds 10% to 15% to the cost, according to Brandon Leavitt, president of Niles, Ill.–based multifamily solar installer Solar Service. “Each meter requires a separate inverter and disconnect, which makes installing additional solar for tenants very costly relative to the return on investment for owners,” Leavitt says.

CR. Herro, vice president of innovation, Meritage Homes
Courtesy: Meritage Homes CR. Herro, vice president of innovation, Meritage Homes

Yet, as the numbers suggest, multifamily has made progress despite those hurdles. For CR Herro, vice president of innovation at Scottsdale, Ariz.–based Meritage Homes, which recently opened CitySquare, a first-of-its-kind, 44-unit net zero multifamily condo development in Irvine, Calif., the reason why is threefold:

· Today’s highly efficient solar panels produce more electricity on smaller roofs;· More efficient apartments mean less energy is needed per unit; and
· States and utilities have adopted “community solar” metering approaches to distribute solar on a pro rata basis.

This last step has been critical to help offset the cost of metering individual apartments for solar. At least 19 states, including New York, Colorado, and Massachusetts, have some form of “community solar” policy to allow solar generation to be split up among different users. In those systems, an array of panels wired into a common electrical feed can produce electricity for a number of units, while metering software helps to virtually allocate a share of the solar energy produced to each residence.

“It’s one big system, going into one big meter,” says Jeffrey Perlman, president at New York–based Bright Power. “Then allocations are made for each apartment, so residents get credit for that solar on their bill. It means the complexities are in the accounting, not the physical set up.”

For Herro, the breakthrough hasn’t been so much on the technical side, as it was a matter of policy and using metering software to crunch the numbers. “Previously, the utilities never had a policy to do that, so we didn’t have the mechanism to redistribute community level solar,” Herro says. “Now, we’ve got a little bit of software that allows you to properly distribute that, just as a billing policy,” Herro says.

While the split incentive has always been a thorn in multifamily’s side, some operators are now starting to turn that equation around. “The more progressive development companies know that residents are paying less in utilities, so they’re able to spend more on rent,” says Asa Foss, director, residential technical solutions at the Washington, D.C.–based U.S. Green Building Council. He points to Chicago-based AMLI Residential, which was a partner in the 2018 Multifamily Executive Concept Community and has deployed solar at several communities in the Dallas-Fort Worth area, with plans for more on the way. “They feel that residents pay attention to that.”

Indeed, Herro says one key to achieving net zero on a wider scale in multifamily will come from developers, owners, and operators borrowing a page from single-family’s playbook, and emphasizing the overall cost of leasing a unit to prospective residents. “Multifamily needs to start marketing and talking to consumers like we do in single-family to help them understand the true cost of leasing,” Herro says. “For renters, if you can link the utilities to the rent, and show a decrease in their net payment, that’s a really compelling value to attract residents.”

In the meantime, operators are taking steps to offset their own electric bills in common areas. Perlman reports Bright Power has outfitted approximately 75 buildings across the city with 6MW of total installed capacity for common area expenses. “The solar serves the common areas and the meter that the owner pays for,” Perlman says.

At Atlanta-based Audubon, which specializes in the acquisition and management of multifamily properties throughout the Southeast, managing partner Chris Edwards says the company got a happy surprise when it bought the 268-unit American Can building in New Orleans, which had been converted into loft-style apartments, and already had solar installed on the roof. Those panels now help offset utility costs in the common areas to the tune of $25,000 a year.

“We knew they were there, but to be honest, we really didn’t think about them,” Edwards says. “It’s a nice addition to have.”

It’s just another example of solar working in multifamily, even though it’s out of sight.