Multi-Family Housing

If you run an apartment complex or own several rental properties, adding commercial solar panels can help you minimize the energy expenditures for yourself and your tenants. You may even attract more tenants to your building, as you will now be able to advertise as a green property!

High ROIs (returns on investment) and an increase in property value are achievable through 100% renewable solar power for your multi-family property in southern California. TENCO SOLAR makes the installation, maintenance, solar panel battery storage, and commercial financing processes hassle-free for multi-family property management companies.

Solar energy systems are an investment in the future of clean energy, and multi-family properties are at the forefront of modeling solar energy as a simple power solution. That’s why we offer financing options specific to multi-family projects that will help you accelerate your payback and start seeing the benefits of solar energy quickly.

Schedule an appointment with one of our solar panel financing experts to discover the best financing option for your property.

Multi-Family Housing Financing

Our team of commercial solar experts can help you explore which multi-family housing financing option is right for your project, so that you can take advantage of all of the benefits of solar panels as soon as possible.

Many of our multi-family property owners have benefited from the FANNIE-MAE DUS financing described below.

Please see our Commercial Financing page for other financing options for your multi-family housing project.

Investment Tax Credit – Low Income Adder

Please see our page on Commercial Tax Benefits for more information on the 30% Investment Tax Credit (ITC).

In addition to the 30% ITC, a project can qualify for additional or bonus tax credits, including the Low Income Adder.

Note: We are still awaiting final guidance from the US Department of Treasury on the requirements for the Adder described below.

To qualify for this adder, projects must be:

• Be placed in a low-income area (per the census track)
• Be under 5 megawatts
• Be classified as a “qualified low-income residential building project” or “qualified low-income economic benefit project.”
• Allocate the financial benefits of the solar project equitably between the residents.

If these qualifications are met, projects may receive a 20 percentage point increase in value of the ITC (30% -> 50%).

California’s Solar on Multifamily Affordable Housing (SOMAH) Program

Affordable housing properties in California can qualify for state-funded solar panel incentives through the Solar on Multifamily Affordable Housing (SOMAH) Program.

The SOMAH Program was designed to provide financial incentives for installing solar panel systems that benefit both property owners and low-income tenants by delivering credits on energy bills to residents that otherwise would not have access to solar energy for their homes.

Property Eligibility Requirements

SOMAH eligibility requires that a property must:

1. Have at least five units.
2. Be deed-restricted low-income residential housing.
3. Satisfy one of the following:
   – 80% of the property residents have incomes at, or below, 60% of the area median income (AMI).
   OR
   – Property is in a defined disadvantaged community (DAC) that scores in the top 25% of census tracts statewide in the CalEnviroScreen.
4. Be an existing building or retrofit.
5. Have separately metered units.
6. Be a utility or community choice aggregator (CCA) customer (with VNEM) in one of the following territories:
   – Pacific Gas and Electric (PG&E)
   – Southern California Edison (SCE)
   – San Diego Gas & Electric (SDG&E)
   – PacifiCorp
   – Liberty Utilities

SOMAH Incentive Example

The example below is for a property with a tenant allocation of 20 kw, or 73%, and a common area allocation of 7.3 kW, or 27% and is based on SOMAH Year 2 incentive rates.

ITC – Federal Investment Tax Credit            LIHTC – Low-Income Housing Tax Credit

From: https://calsomah.org/incentives-finance

Application Deposit and Gap Financing

The SOMAH application does require an investment of time to gather documentation and complete the required forms, but when you select TENCO SOLAR as your installer, we will complete the application for you. 

SOMAH applicants applying for systems of 10 kW or larger are required to pay an application deposit based on system size.

• 10-50kw = $1,250
• 50-100kw = $2,500
• 100-250kw = $5,000
• 250-500kw = $10,000
• 500-1,000kw = $20,000

Once the solar system has been installed and approved for incentive payment, the application deposit will be returned in full. Application deposits are waived for priority groups, including disadvantaged communities and tribal properties.

SOMAH incentives are paid at the end of a solar system install, so many property owners will need gap financing to start their project.

Virtual Net Energy Metering (VNEM)

VNEM is a tariff arrangement that enables a multi-meter property owner to allocate the property’s solar system’s energy credits to tenants. Instead of flowing to the tenants’ meters, the generated electricity feeds directly back onto the grid and the participating utility then allocates the kilowatt-hours received to both the building owner’s and tenants’ individual utility accounts, based on a pre-determined allocation agreement. VNEM tariffs were first piloted under the Multi-family Affordable Solar Housing Program (MASH) as a means of providing direct benefits of the solar system to low-income tenants in an affordable housing complex.

Unlike other multi-family housing projects, all VNEM projects will continue to be compensated according to Net Billing 2.0. Customers with a signed contract and a completed Net Billing application before April 14, 2023, will be locked into the Net Billing 2.0 rates for 20 years. Customers that complete their application after April 14 will be guaranteed Net Billing 2.0 rates for 9 years.

Contact TENCO SOLAR To Secure The Best Financing Option For Your Business

For solar energy services that can guide you through installation, financing, and routine maintenance, choose TENCO SOLAR. Our solar panel experts know the right questions to ask and have the tools to lead you to the tax incentives and accelerated depreciation options that will yield the best results for your multi-family property.

Contact TENCO SOLAR today at 888-648-9759 to find out how we can help you with your Multi-Family Housing Project.

TENCO SOLAR does not provide tax or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax or accounting advice. You should consult your own tax, legal and accounting advisors regarding your specific circumstances.