Are solar and Heat Pumps worthwhile for multifamily and how to calculate the break even?
Does anyone have experience with this for older apartment buildings?  What are the headaches tht prevent this from being a no brainer
[{"id": "iou1rj9", "text": "The question is what are the utility savings vs the investment.  If reducing your electrical utilities by $5000 costs $100,000, that\u2019s a 5% return. If buildings in your area trade at a 5% cap, that\u2019s a wash in terms of return.\nIf sane $5k savings only costs $50k and buildings trade at a 5% cap, arguably you\u2019ve increased your building\u2019s value by $100k by spending $50k only.\n\nDepends on the math in each local market.", "replies": [{"id": "ioxfwtx", "text": "There are also green mortgages for apartments to that complete energy efficiency projects that allows higher LTV and lower rates. It is isn't a massive difference, but is definitely a nice nudge in the right direction for older buildings that should definitely be upgraded with water and energy conservation based on your qualifications above. With Fannie Mae and Freddie Mac these are usually electric and water savings. I am unsure if solar panels qualify as energy savings, but suspect it might.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ioud70e", "text": "Solar can be a no brainer depending on location. Anywhere in California it\u2019s a good deal. I have personally managed outfitting a bunch of our legacy properties with solar, the biggest headache was definitely the roof condition, the economics of the project can become bad if you have to replace it or do a major repair. There are ways to minimize this cost by consolidating the system layout but sometimes it\u2019s not enough. The other main consideration is adding battery storage, the tax incentives on these are not as generous as on the solar system itself, but battery storage can allow you to make a lot of money selling excess energy generated during the day back to the grid during evening peak hours. Extends the payback period but can ultimately achieve a much higher project IRR.", "replies": [{"id": "ioue61r", "text": "thanks\ncan you share the size of the properties you updated and the capex for solar and realized return?", "replies": [{"id": "ioue8ba", "text": "I\u2019ll dm you", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "iowseuq", "text": "Well there are 2 areas for solar - common areas and apartments. Typically by LL paying for utilities you would get a return but LL paying has a shitty return outside the short term rental market. Renters will just crank the AC and blow out the bill.\n\nCommon areas you should be able to run an analysis on cost/benefit and if you are anywgere vaguely south or southwest is a no brainer investment. Only caveat being roof age. You probably will want to install it on a new portion of your roof and definitely dont do it on a really old roof.\n\nFrom an analysis perspective just pull your electicity cost vs production vs cash flows (payment timing and tac incentive timing). If you are super hardcore you can use daypart/peak rate impacts but that is a lot more complicated.  Whatever you do dont lease or sign a PPA.", "replies": [], "depth": 1}]