What if it were possible for commercial landlords to install a solar power system at no initial cost and achieve instant return on investment? This summer, a large-scale government facility in Sacramento did just that with the help of innovative property manager Clear Blue Commercial, which handled a complex process involving numerous stakeholders to bring about the project’s successful completion. Taking into account the benefits to both landlord and tenants, Clear Blue Commercial negotiated a power purchase agreement (PPA) with a solar services provider that allowed their client to install a comprehensive photovoltaic system with zero upfront cost.
Going solar has many important benefits for landlords and tenants, helping them reduce their carbon footprint, save money, and increase resiliency. With utilities being one of the biggest expenses for most businesses, the financial argument for reducing energy costs is quite compelling. And solar is one of the few technologies right now that has a phenomenal return on investment.
However, the challenges of the initial capital outlay combined with the daunting design and permitting process prevent many property owners from making what would otherwise be an obvious choice.
Clear Blue Commercial solves this problem by working with a third-party developer to set up a Power Purchase Agreement (PPA) in which the photovoltaic system is installed on a customer’s property, but is designed, installed, owned, and maintained by the solar service provider.
The customer then purchases electricity from the service provider at an agreed-upon price that is typically about half the cost per kilowatt hour as electricity purchased from PG&E, making solar PPAs cash-flow positive for landlords and tenants from day one. Going solar is also an excellent hedge against inflation, protecting properties from PG&E rate increases, which can happen at any time.
“It’s a huge win for the property owner, who can take that savings and reinvest it in their own business,” says the happy Clear Blue Commercial client.
In addition, solar arrays provide a stable source of electricity, protecting landlord and tenants from brownouts and power shut-offs, which are likely to be increasingly common due to the danger of wildfire. And there’s no need to worry about rate fluctuations due to peak usage times.
“The biggest challenge to getting a project like this off the ground is getting all the stakeholders to believe that there is such a thing as a win-win situation,” says Carolyn Pistone, President and Managing Director of Clear Blue Commercial. “By contracting with a third party in a PPA, Clear Blue Commercial is able to remove that obstacle, while providing clients with cleaner cheaper energy right away.”
Going solar is a major step towards achieving Net Zero energy use, one of Clear Blue Commercial’s prime values. As climate change accelerates, it is increasingly clear that Net Zero is not just a buzzword, it’s a goal that all commercial property owners and managers need to be working towards all the time. Working with Clear Blue Commercial to install a solar energy system through a PPA is one of the biggest steps landlords and tenants can take together.