Australia is a world-leader in domestic solar power, with around one in five owner-occupied homes topped with installed panels. However, that number would be even greater if property investors also had an incentive to go green.
While homeowners are drawn to solar as a means to reduce electricity costs, landlords are typically less inclined to install solar panels – usually at great expense – because it’s their tenants, not themselves, who stand to benefit from lower bills. And with one in three Australian households living in rented accommodation, that’s a lot of wasted potential.
This predicament has promoted one Australian company to launch a new system that incentivises landlords to adopt solar, as they effectively sell power to their tenants.
Matter, a tech start-up based in Victoria, is giving property owners the ability to “create additional revenue” on their investment properties, with tenants also benefiting from lower energy prices.
It has launched Digital Solar – a “pioneering technology” that allows owners and tenants to collaborate through an online business case calculator to see what shared benefits they could generate. Matter then provides a quote and facilitates the installation process.
“Our mission is to empower millions of people who want to adopt sustainable energy but currently don’t have the option,” said Matter CEO Chris Mrakas. “By pioneering the shift from ownership to usership in the energy industry, Digital Solar puts landlords and their tenants in control, creating new revenue streams and lowering energy bills.
“It’s a trend that’s set to continue as solar becomes more prevalent and new business models emerge to meet the needs of the changing energy landscape.”
The service means landlords can install solar energy systems that have attractive payback periods and high lifetime returns, which improve both rental incomes and the capital value of their investments, Matter claims.
How does Digital Solar work?
Digital Solar comes in the form of an unassuming box, installed between the solar panels on the roof and the electrical box, feeding outlets in the home. Power generated by the solar system and consumed by the household is accurately measured and made available to both owner and tenant through Matter’s portal.
The platform allows a property owner to bill their tenant for the power they use with an invoice generated by Matter’s system. A separate log-in allows tenants to view their usage in real-time, visualise the dollar value of what they’re saving and even view a usage forecast, leading to more conscious energy consumption habits.
How much could you save?
Tenants can secure their daytime electricity supply with Digital Solar and use traditional grid power for the top-up energy that can’t be produced by the solar system. Matter claims the following savings could be made with Digital Solar:
- If an average house has about four people and an energy bill of $1,500 a year (with no air-con or pool), tenants would save in excess of 20% off their current grid electricity tariff, every year. This equates to an annual saving of about $300 a year.
- If all 2.4m rental properties in Australia were to use Digital Solar technology in the future, tenants nationally would save approximately $780 million per year, assuming properties are an average four person size.
- For landlords, the Digital Solar system pays itself off within 4-5 years and generates $1 for every $5 spent – an increase in rental income of about $1,000 each year (can be a lot more in some states). On average, Digital Solar increases the value of rental properties by $30k, with an ROI of 15%+. The states which reap the most benefits are QLD, NSW and ACT and if the house is larger and has air-con or a pool, the benefits are greater.
“There’s no reason why in the future, communities using this technology won’t be able to produce, share and even trade in solar energy units,” added Mr Mrakas.
Digital Solar is currently suitable for single tenanted rental properties and will be rolled out to multi-tenanted, mixed residential and commercial properties next year.
Matter says it is expecting high demand as it launches Digital Solar in Australia in December, with further plans to launch in the United States and Europe in early 2016.