Why Solar-Plus-Storage Is a Smart Investment for Real Estate

Investments in clean technologies have been increasing steadily. President Biden’s 2022 Inflation Reduction Act has accelerated the trend by creating financial incentives for installing solar photovoltaic (PV) systems and commercial battery storage. But getting a tax break isn’t the only reason cleantech has caught the attention of developers, property investors, and real estate investment trusts (REITs). Solar for real estate can unlock attractive financial and environmental benefits — especially when combined with a battery energy storage system (BESS).

Solar PV & Battery Storage Basics

Properties equipped with solar panels and commercial battery storage have flexible options for managing a building’s energy. For example, a rooftop or carport solar PV system generates emissions-free electricity to power a facility during daylight hours — and if the system is paired with a battery, it can store surplus energy to be used at night. A solar-plus-storage system is essential to optimizing power usage and making the most of clean energy when it’s available.  Says Richard Batten, Global Chief Sustainability Officer at JLL, in an interview with Bloomberg, “As we move into renewable energy supply, its provision is less consistent than fossil fuel due to variations in sun and wind. The challenge is to increase the number of hours that renewables can interact with the built environment. Batteries are crucial to enable this.”

How Does Solar-Plus-Storage Benefit Real Estate Investors?

According to research on sustainable real estate, green offices are more likely to bring in a rent premium and less likely to sit vacant, making them a solid investment for the future.  Prologis, a leading international commercial and industrial real estate provider, understands how important sustainability is to its tenants. The company has rooftop solar at 180 facilities in 11 countries, generating over 256 megawatts of clean power annually.  With that example in mind, let’s look at the benefits of solar-plus-storage for real estate investors.

Increase Property Value by Cutting Energy Costs

Ongoing operational expenses factor into a building’s valuation. Energy-efficient buildings cost less to operate, making them more appealing to stakeholders.

There are several ways to use solar-plus-storage for energy savings.

• Peak shaving: Tenants can avoid expensive peak demand charges by flattening their utility consumption with a combination of solar and stored energy.
• Energy arbitrage: In service areas where utility rates vary throughout the day, a BESS lets customers draw and store power when rates are low and dispatch it when rates are high.
• Solar shifting: With solar-plus-storage, tenants can collect surplus energy during the day and consume it in the evening, thus “shifting” their use of solar energy to a later time.

An intelligent energy management system (like PowerFlex X™) that uses algorithms to orchestrate and optimize power generation and consumption can maximize savings effortlessly.

Deliver on Your ESG Commitments

Providing long-term value in today’s market requires an environmental, social, and governance (ESG) approach that serves all stakeholders. That includes investors, tenants, employees, and communities. According to the CBRE, “While carbon reduction efforts may not necessarily generate higher investment returns, it will play a prominent role in preserving asset value as occupiers increasingly shy away from properties with subpar environmental performance. As occupiers and investors are drawn to properties that are more sustainable, these assets will be worth more.”  Solar for real estate is an easy ESG win — solar reduces a building’s carbon footprint, and, with battery storage, there are greater ESG benefits via optimized energy use.

Keep Pace With Building Regulations

Building regulations increasingly favor green practices as the demand for clean energy grows nationwide. To reduce carbon emissions, New York became the first state to officially ban natural gas for heating and cooking for some new constructions.  Properties with solar-plus-storage are already ahead of the game in electrification. They’re well-positioned to meet future regulations and keep their value for years to come.

Implementing a Solar-Plus-Storage Solution

Installing solar PV or battery storage systems can be complex. To ensure you get the solution your facility needs, partner with a provider experienced with a range of clean technologies. A turnkey provider will guide you from design to installation to system operation.  At PowerFlex, we’ve helped many properties install solar-plus-storage systems, optimizing the setup with intelligent management software for greater energy savings. We work collaboratively with our customers to build a system that meets their energy needs today and that can scale to accommodate their future goals too.  If you’re in the real estate sector, contact us to explore how solar-plus-storage can benefit your new and existing properties.