Pick any house with solar electricity panels installed; it’s 50 times more likely to be owner-occupied than rented. Why is that?
Landlords won’t invest in solar if they can’t recover the cost and tenants won’t install solar on the landlord’s property, no matter how badly they want clean energy. Tenants hate the idea of paying more rent for power, they feel like its wrong.
It’s a problem. It even has a name: the split incentive problem. It’s a massive industry problem that stopping tenants and investors from doing what is normal for an owner-occupier. There are over 1,500,000 homes in Australia with solar, most of which are owner-occupier. Less than 1% are investment properties.
There has to be a solution that makes solar work for landlords and tenants, surely? With Matter’s new technology, there is. For a fraction of the cost of the average solar system, Matter’s Digital Solar adds a metering and billing capability, giving landlords a service that measures and charges for the energy produced and consumed in an investment property. Digital Solar turns a normal solar system into a valuable asset in an investment property that generates cash flow.
Landlord solar is one of the few ways a property investor can increase cash flow from their investment property.
Property investors do this by taking part of the tenants spend with a power utility instead of increasing the rent.
So how does it work?
It costs the Landlord less than 9 cents/kWh to have Solar installed with the Digital Solar service. The landlord and the tenant agree on a fair price for the energy as part of the tenancy agreement, typically this is for 20% less than the tenant pays for utility power.
Matter doesn’t sell solar it selects the best providers in Australia and negotiates an amazing deal for property investors. And because we organise lots of Landlord Solar systems we can get pretty good deals on high quality kits.
We at Matter set up the whole arrangement for the landlord. We get quotes, we organise the install and also set up the service. Matter’s technology automatically bills the tenant for their energy consumption from the solar system. For the tenant this is substantially lower than the current electricity charge from the grid during the day.
In addition to a standard solar installation, a Matter SmartBox is fitted as well. The Matter system then monitors how much energy is produced from the Solar system, how much the tenant consumes, and how much is sent back to the grid.
The tenant still gets their additional energy from their traditional utility, just less of it than they used to, along with a smaller bill. They also get a portal to the Matter system, so they can see their solar usage in real-time and know exactly where their money is going. That means no surprises when they get their bill.
Matter has been designed to work well with landlords that use agents to take care of their relationships with their tenants, so we’ve set it up for property managers to be able to take care of most of the process on behalf of the owner as part of their normal service.
This means landlords can now supply tenants with cheaper clean energy, while improving their returns and adding to their property’s value.
Tenants get lower energy costs, while still being in control of their spending. Plus they’re using clean, renewable energy.
It wasn’t so long ago that dishwashers and air conditioning were unusual luxury items in rental properties – they’re standard now. The same is going to happen with solar systems. People want to reduce their bills in an environmentally conscious way.
Until recently, because of the split-incentive problem it was too much of a headache to fit solar panels and bill for energy in rental properties. Matter’s Digital Solar makes it easy, simple and worthwhile.