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Be your tenants landlord and their energy provider.
Solar energy is clean, green, and sustainable. It’s also cheaper than grid electricity, but for the thousands of tenants around Tasmania, solar has generally been out of reach - until now. TWE is offering landlords a financial incentive to provide solar power. TWE meters the solar energy usage and produces an energy bill for the tenant. This reduces tenants’ day-time energy bill, and landlords enjoy a brand-new revenue stream plus an increase in property value.
With TWE, tenants buy discounted electricity during daylight hours from their landlords. Tenants spend less, landlords make more.
TWE install the solar panels and metering technology, meters the solar electricity, bills the tenant and transfers payment to the landlord.
With TWE, tenants save money while landlords enjoy a new income stream and increase the value of their property.
HOW IT WORKS
TWE is providing property investors with a new source of income on rental properties, by enabling you to install solar on your roof, and charge your tenant for their solar electricity usage at a discounted rate to the grid. The process of charging tenants for their solar usage is facilitated by TWE through a Landlord Power Purchase Agreement (PPA). Landlord PPA allows landlords to capitalise on solar systems they install on investment properties.
Whereby the tenant pays the landlord a rate typically less than the rate of their traditional energy provider, for the energy produced by the solar system. TWE meters the solar systems productivity, bills the tenant quarterly on behalf of the landlord, and receives a $30 subscription fee (5-10kWs) or 10% of the bill (10+kWs) in return for the service, before forwarding the remainder of the bill on to the landlord.
This really is a win-win situation for all parties involved. The tenant pays a cheaper rate for electricity, and the landlord receives an additional income for the power generated by the system. Following installation, systems generally pay themselves off in 3-7 years, meaning that all income generated for the remaining 25+ years of the systems life is profit for the landlord. Installation costs and payment to TWE really is a small investment for a large ongoing return.
- Increase property value -
- Tenants save money on electricity -
- Passive income for landlords -
- Stronger guarantee of renting investment property -
- Increased property yield -
Sarah is a full-time mother and rents a 3-bedroom suburban property off Jim, with her husband Nick. Their current annual energy usage is 9,770kWhs, and their energy bill is $2540. Jim contacts TWE and decides to implement a Landlord PPA agreement between Sarah and Nick, and himself. TWE installs a 5kW solar system on the roof of Sarah and Nicks house. The total installation cost for Jim is $8995.
Jim, Sarah and Nick agree on a solar rate 15% less than the 26c/kWh being currently charged by Aurora, which is 22.1c/kWh. Sarah’s family uses 70% of the energy produced by the solar system, and the rest of the energy produced is exported back to the grid for 6c/kWh.
After one year, Jim will have received an additional
$1,016 off Sarah and Nick for their solar energy usages. Jim also
received solar credits for all energy exported to the grid, which was
$118. However, Jim must pay TWE a $120 per year subscription fee.
Overall Jim has increased his yearly annual yield by $1,014. At this
rate, Jim will have paid off the initial cost of the solar system in 9
years. The remaining 16 years of the solar systems life is profit in
addition to rent for Jim.
After one year Sarah and Nick have paid Aurora only
$1345, and paid Jim $1016, giving them an overall annual energy
expenditure of $2361. Sarah and Nick have saved $180.
While Sarah and Nick benefit immediately from their savings, Jim needs to consider the best way to maximize his investment return. Ways to maximize his return will vary depending on his financial circumstances, how he chooses to finance and depreciate the asset, and his tax position across his investment property portfolio.
In this example assuming energy usage of the solar system
remains constant over the life of the system, and rates remain at 15%
less than the utility, Jim’s ROI is 11.3%.
Ryan rents a commercial property off Paul in Hobart. Ryan’s current annual energy usage is 33,945kWhs, and his energy bill is $9049. Paul contacts TWE and decides to implement a Landlord PPA agreement between Ryan and himself. TWE installs a 25kW solar system on the roof of Ryan’s business. The total installation cost for Paul is $32000.
Paul and Ryan agree on a solar rate 15% less than the
26c/kWh being currently charged by Aurora, which is 22.1c/kWh. Ryan uses
90% of the energy produced by the solar system, and the rest of the
energy produced is exported back to the grid for 6c/kWh.
After one year, Paul will have received an additional
$6534 off Ryan for his solar energy usages. Paul also received solar
credits for all energy exported to the grid, which was $197. However,
Jim must pay TWE 10% of his bill, which is $653. Overall Jim has
increased his yearly annual yield by $6078. At this rate, Jim will have
paid off the initial cost of the solar system in 5 years. The remaining
20 years of the solar systems life is profit in addition to rent for
Paul.
After one year Ryan has paid Aurora only $1330, and paid
Paul $6534, giving him an overall annual energy expenditure of $7864.
Therefore, Ryan has saved $1,185.
While Ryan benefits immediately from their savings, Paul needs to consider the best way to maximize his investment return. Ways to maximize his return will vary depending on his financial circumstances, how he chooses to finance and depreciate the asset, and his tax position across his investment property portfolio.
In this example assuming energy usage of the solar system
remains constant over the life of the system, and rates remain at 15%
less than the utility, Paul’s ROI is 19%. Assuming energy prices remain
constant over the life of the system, Paul stands to make a profit of
$121,550. However, even as energy prices do increase, the rate Paul
charges tenants increases proportionally at 15% less. So his profit will
also increase as energy prices rise in the future.
This is a strong opportunity for landlords to capitalize on a second revenue stream from their properties. Not many investments give ROI’s as high as solar, which simultaneously adds value to the property.
Deciding if Landlord PPA is suitable for you will depend on a few key things about your property, it’s tenants and their lifestyles.
Electricity Usage
Landlords will receive the highest return on properties that display peak energy usage throughout the day. Tenants that spend a lot of time in the property throughout the day are generally the most suitable. It’s also important to gather information on your tenant’s energy usage to determine the size of the solar system required to maximize returns. You or your property manager should acquire a copy of your tenant’s recent electricity bills so TWE can make an accurate assessment on viability and system size.
Property Orientation, Design and Shading
These factors all affect system design. Large, north-facing roofs with a 15-35 degree pitch and zero shading are the best for solar in Tasmania. However, if your roof differs from the ideal, that’s OK. It’s rare to have to the ideal roof and TWE can design a system which will maximize solar exposure on your roof. Contact us today and we can assess your properties suitability for a solar system.Type of Building
If your property has ample roof space, TWE can implement a Landlord PPA. If you’re unsure, contact us today to discuss your properties potential.
Yes. If your tenants agree, it’s just a simple matter of TWE installing the metering system. The only cost incurred will be the cost of the metering technology and installation.
Yes. Solar systems only produce power through the day so tenants will still need to be connected to the grid for times when the system is not meeting the demand of the tenants
The Landlord PPA with the tenant starts once TWE has installed the energy meter, and continues until the end of the tenants’ lease. If the tenant renews or extends the lease the PPA automatically continues.
If the lease has been terminated, you or your property manager need to notify TWE immediately and the PPA between you and that tenant will be terminated. This means you do not need to continue to pay TWE a quarterly subscription fee.
If a new tenant moves into the premises that is willing to enter into a Landlord PPA, TWE will sign them onto a new PPA and the service will recommence.
Yes. Solar systems will continue to produce energy whether it is being used or not. This excess energy is exported back into the grid for 6c/kWh. When this occurs, the person with the site’s grid electricity bill in their name (usually the tenant), receives a payment called a ‘Feed-in Tariff’ from their energy retailer for the exported power. TWE meters this and will charge the tenant on your behalf for any electricity exported back to the grid.
Tenants are given 30 days to pay their invoice. Where a customer is late paying an invoice, TWE shall implement the following process.
(i) TWE will send a reminder letter advising the customer that their payment is overdue.
(ii) Once an overdue notice is issued tenants will incur 2% compound interest every week to be paid to the landlord until the invoice has been paid.
(iii) If no response is received within 14 days, a final reminder letter will be sent.
(iv) If no response is received within 14 days of final reminder letter, then TWE will contact the customer by telephone to ensure the customer is aware of the overdue payment.
(v) If the customer is unable to pay, TWE will provide flexible payment options.
(vi) If the customer will not pay, TWE will proceed to employ the service of a debt collection agency
It is up to the discretion of the landlord upon consultation with TWE, whether to provide assistance by:
In the case that financial difficulties cannot be resolved and the PPA is terminated, it’s important to make the tenant aware that by doing this they will be charged the full amount for electricity supplied by the grid, costing them even more.
Yes, this is a form of income and should be declared. However, it’s always worth seeking professional advice.
For systems under 10kWs TWE receives $30 subscription fee per quarter from you the landlord, for the metering and contract service provided. For systems 10kWs and greater, TWE retains a 10% subscription fee of the tenants’ bill.
The subscription fee is always deducted from payments made to TWE by the tenant, before payments are remitted to you or your property manager.
To figure out the amount you’ll save the first thing you will need to do is find out is how much electricity your household uses and how much you pay for it. This information is available from your utility bill.
Once we know that we can figure out what the right size system for your property is and estimate when you consume power. Landlord PPA is a great match for tenants that consume a reasonable amount of electricity during sunlight hours.
Yes, because solar only generates electricity during the day, and the amount generated is dependent on the weather. You will still need a grid electricity supply to cover your evening and additional daytime needs.
You should be aware that the solar power will not be the primary source of energy:
Yes. TWE, landlords and tenants will all have access to the online monitoring system to look at current and historical usage.
TWE remotely monitors the solar production and energy consumption on the premises for the purposes of billing, user support, error correction and maintenance.
We use a NMI approved metre that transfers data securely back to us, all you have to do is insure the internet is on.
In the unlikely event of the solar system or our hardware failing during daylight hours, your electricity will be temporarily sourced from the grid until the system is repaired. TWE will alert the property owner and/or property manager.
If you're property has its own roof space then it's perfect.
Once the solar system has been commissioned and you’ve started using solar electricity at your rental property, we’ll bill you on behalf of your landlord. Your landlord pays a subscription fee for the monitoring and billing – all you pay for is the amount of solar power you've used.
You’ll be billed quarterly in line with your Aurora bills.
Your bill is calculated by multiplying the kilowatt hours of solar you consumed in the previous quarter, by the rate (c/kWh) agreed with your landlord when you signed up.
We can post or email your bills depending on your preferred method.
Your bill will contain all the information you would expect to see on a normal electricity bill including:
You can pay your bill by Direct Debit, either via your bank or credit card (VISA, MasterCard, American Express). This keeps processing costs down for you and your landlord.
If you plan to terminate your lease and move out of your property, let us know and we will produce a final bill for you up to the date you move out.
Under the applicable laws tenants have the right to request financial assistance which landlords may provide at their discretion. Available assistance includes:
On disconnection of the solar system tenant should be aware that they will be charged the full amount of grid electricity from their licensed energy retailer which will increase their bills.
Please contact your property manager or landlord directly to assist you in handling disconnection, reconnection and financial difficulties.
You will given 30 days to pay your invoice. If you're late paying an invoice, TWE shall implement the following process.
(i) TWE will send a reminder letter advising the customer that their payment is overdue.
(ii) Once an overdue notice is issued tenants will incur 2% compound interest every week to be paid to the landlord until the invoice has been paid.
(iii) If no response is received within 14 days, a final reminder letter will be sent.
(iv) If no response is received within 14 days of final reminder letter, then TWE will contact the customer by telephone to ensure the customer is aware of the overdue payment.
(v) If the customer is unable to pay, TWE will provide flexible payment options.
(vi) If the customer will not pay, TWE will proceed to employ the service of a debt collection agency and the PPA Agreement will be terminated.
On disconnection of the solar system tenant should be aware that they will be charged the full amount of grid electricity from their licensed energy retailer which will increase their bills.
Customers may make a query or complaint to TWE via email or phone. TWE will acknowledge the query or complaint within 5 working days, and should it be required TWE will request the customer provide a written notice setting out the particulars of the dispute and the position which the customer considers to be correct.
Representatives of both parties will then meet in person or by telephone within 10 business days of the date of receipt of the notice, and each use reasonable endeavours to resolve the complaint or dispute.
If the dispute is not resolved within 20 business days of the notice then either party may refer the complaint or dispute to a mediator or such other person or entity having the jurisdiction and power to resolve the dispute, such as the Energy Ombudsman Scheme, or any other relevant external dispute resolution bodies in Tasmania.
TWE will keep a record of all complaints and the time taken to conclusion.