As a California multifamily property owner, you have likely considered installing solar and Energy Storage Systems (ESS). Maybe it’s because of the increased property value, independence from increasing utility costs, or the desire to provide clean energy. Or maybe you’re building a new property, and California’s Title 24 mandate requires you to install solar.
Regardless of the reason, solar for your multifamily property can be an impactful investment. Utility rates continue to rise, and nearly 34% of U.S. households rent rather than own. Property owners across the state are looking into solar and ESS to increase NOI, make their buildings more energy-efficient, and offer energy savings to tenants.
Converting your property to solar power is a big decision—and there's a lot to consider. While the benefits of solar energy are clear, such as lower operating costs and increased property value, we know installing solar on a condo or apartment complex isn't as straightforward as putting panels on a single-family home. The process can feel overwhelming, from complex metering systems to tenant billing considerations. Add in the substantial upfront investment, and it's natural to have questions.
With creative financing solutions, advanced billing systems, and new technologies like virtual net metering, property owners now have more ways than ever to make solar work for their buildings. Not only can you save substantially on energy costs, but you'll also be offering an amenity that modern renters actively seek—sustainable living options.
Ready to learn how solar can transform your multifamily property? This guide has you covered.
Average energy costs by state comparison Source: United States Energy Information Administration Data from August 2024
Energy costs are one of the biggest operational expenses for multifamily properties, and they’re only going up. In California, property owners are facing some of the highest electricity rates in the nation. By installing solar panels, you can significantly reduce these costs, whether you're powering common areas like lobbies, elevators, and even pools or providing electricity for your tenants.
Here's how solar can improve your bottom line:
Solar installations do more than cut costs–they increase your property's market value. Properties with energy-efficient upgrades like solar panels can be appraised at a higher value, making them more attractive in the market.
California’s renters care about sustainability, and having solar power for your multifamily property can be a valuable marketing tool. Properties with solar systems often see lower vacancy rates and reduced tenant turnover. When you go solar, you’ll attract eco-conscious tenants who value environmental responsibility as well as budget-savvy residents looking to save on utility bills with virtual net metering (more on this discussed below). A solar-powered property sends a clear message: “We care about the planet and your wallet.” And that’s a message tenants want to hear.
With virtual net metering, it’s now possible to share solar benefits across your property, even without individual rooftop systems. This means you can install one efficient system and pass along the savings to your tenants—making solar more practical and cost-effective for everyone.
Virtual net metering allows landlords to share the solar saving benefits with their tenants by distributing solar credits to their utility bills. It's a simpler way to manage your building's energy and provide value to your tenants without needing separate solar systems for each unit.
Sources: Ivy Energy Model Virtual Net Metering for Multi-Unit Buildings
With virtual net metering, your property can be treated as a single energy system rather than separate units, making it more efficient and cost-effective. This system distributes solar benefits based on power usage, meaning tenants get solar credits that match their energy needs. Virtual net metering not only makes your property more attractive to renters but also helps build goodwill with tenants who value sustainability and cost savings.
California offers some of the best solar incentives in the country. We go through these in detail in our blog “A Business Owner’s Introduction to Solar Tax Options”. When you install solar, your property taxes won't increase thanks to a special exclusion—meaning you get all the property value benefits without the extra tax burden. Many local utilities also offer their own rebate programs.
The federal government offers a substantial 30% tax credit on your total solar installation costs, including equipment and labor costs. This can drastically reduce the upfront cost of solar installation, leading to faster returns on investment. Even non-profit and tax-exempt organizations can now benefit through new Direct Pay options, making solar more accessible than ever.
When it comes to financing solar for your multifamily property, you've got options. Let's break down the choices to help you find the best fit for your situation. Buying solar panels will add value to your property and give you the biggest long-term savings. Leasing can help you save on power expenses—at the cost of not owning your panel installation.
Purchasing solar panels outright is ideal if you’re looking for maximum financial returns. While the upfront cost is a consideration, the long-term savings make it worth the investment. As the system owner, you can:
Leasing can be an appealing option for going solar. Under a lease or power purchase agreement (PPA), a third party owns and maintains the system while you pay a monthly fee or predetermined rate for the power produced. With a leased solar system, you can:
While solar leasing can be appealing, leasing means you don’t own the panels and can’t take advantage of government subsidies and incentives. When looking long-term, leasing is more costly and restricts your options.
Switching to solar is more than an upgrade—it’s an investment in your property’s future. You’ll lower energy costs, increase property value, and meet the growing demand for sustainable living. From lower operating costs to increased property value, solar gives you new ways to improve your bottom line while making your property stand out in the market.
If you’re interested in exploring solar options for your multifamily property, Citadel is here to help. We know that finding a reputable solar company can be challenging. At Citadel Roofing & Solar, we understand the unique needs of multifamily buildings in California. Our team will guide you through every step—from designing the right system for your property to helping you navigate financing options and incentives. We’re a long-standing, trusted solar installer, ranking #1 in California for total kilowatts installed in the commercial & residential market. With Citadel, you can make confident decisions about your property's energy future.