Working out if Matter’s solar service is viable for you will depend on a few things about your property, its tenants and their lifestyles.
Electricity usage in your property
The tenants’ current consumption and usage patterns will act as a good guide to the size of the solar system you will need. Daytime energy use, like running air conditioners, will see the best returns from Matter’s solar service. You (or your property manager) should ask the tenant for a copy of a recent electricity bill to make an accurate assessment
The property’s location
Yes, location matters. The sun shines differently in different places, so you will need fewer solar panels for the same energy output in a sunny part of the country compared with a more cloudy location. Simply put, the same systems installed in Brisbane and Melbourne will produce different outputs and earn different returns.
Orientation, design and shading
This affects the design of the system you’re likely to need. Large north facing roofs (in the Southern Hemisphere) with 15-35 degree pitch and no shade are the best for solar. Your solar designer will be able to advise you if you need to do anything special for your system.
Type of building
Right now we’re focused on rolling out the Matter solar for rentals service to detached, semi-detached, terraced houses and dual-occupancy properties. Soon we will be able to support other mixed residential, multi-tenant and commercial properties . To find out if we can set up solar for rentals on your property drop us an email and one of our team will get in touch.
Matter gives property investors 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 discount to their grid electricity.
Our hardware monitors the solar production on your premises and provides online access – through the Matter dashboard – to the solar production and energy consumption data. Then Matter issues an invoice for the Tenant’s solar consumption on your behalf.
If a tenant can cover a good portion of their daytime energy needs with solar, say 50% or more, the economics start to become attractive for both parties.
As an example, imagine a tenant, Tina, a married mum of two who works from home and rents a 3 bedroom home in Sydney’s outer suburbs on a 12 months lease from Wes, the landlord. Her current utility charges her 30 cents per kWh for energy and her annual bill is $2,656.00, about $51.00 a week.
If Tina signed up for Wes to provide her with solar power at 24c/kWh, a 20% discount to the utility price, sourcing half her energy from the grid and half from Matter’s solar service, over a year Wes could earn around $1,060.00 and Tina save around $265.00.
The excess energy that Tina doesn’t use goes back to the grid through Tina’s utility supplier who will pay a feed in tariff of around 6.2c/kWh. If Wes agrees to share 20% of that tariff with Tina he’ll earn another $60 a year and Tina will earn $15.00. That takes Wes’ earnings up to $1,120 per annum and Tina’s savings to $280.00.
Tina benefits immediately from the savings. Wes should work out the best way to maximize his return on investment. This will vary depending on his circumstances, how he chooses to finance and depreciate the asset, and his tax position across his investment property portfolio.
The case for Matter’s solar service is compelling with typical returns of:
- Increased yields of 20 to 30 basis points, payback in 5 years and an expected life of 25 years.
- A 5 times greater ROI over that of the investment property itself.
- A net present value of 3 times the cost of the system and IRR of over 20%.
Yes you can, you’ll just need to get Matter’s smartbox and monitoring technology installed and get your tenant signed up.
If you’ve already got a tenant in your premises then you or your agent will need to let them know that to ensure the up-keep of the solar system, you are bringing a new solar management system online.
We then suggest you take the following steps:
- Explain that Matter’s solar service requires no effort from them other than being party to the agreement with a simple signature.
- They will still receive cheaper, clean energy, however a small percentage of the benefit they enjoy will now be set aside for system maintenance.
- The tenant will also be able to more accurately track and predict their energy usage with the Matter dashboard, helping them modify their energy usage habits and leading to greater savings.
Yes, we can remit Digital Solar payments from your tenant to you directly or to your property manager, whichever you prefer.
Even though Matter’s solar service is about solar not grid electricity, our Terms of Service afford various protections for tenants that meet applicable regulations in relation to charging tenants for electricity. They can be read here.
Under the regulations landlords are able to earn a profit from selling energy, solar or otherwise however customers should be charged “fair and reasonable energy costs” and the seller should not take advantage of the potentially lesser bargaining power of the customers. Also the seller must not charge a small residential customer more than the local area retailer’s standing offer.
The point of Matter’s solar service is to create a win-win for landlords and tenants. Matter recommends that a discount of 20% off the renter’s grid electricity contract is provided. This ensures that property investors receive a fair payback on the solar investment and the tenant gets cheaper bills (in addition to meeting regulatory requirements).
The solar will only offset some of the tenant’s daytime electricity so they need to keep a grid electricity contract and pay their bills directly to their energy retailer – Matter isn’t involved in this arrangement.