What is Solar Electricity?

Solar photovoltaic (PV) systems, also referred to as solar electric systems, capture sunlight energy and convert it into electricity. PV systems can be used to power everything in your home from lights and appliances to an electric vehicle.

Installing solar PV on your multifamily property can provide many benefits. As a multifamily property owner, you have two choices:

  • Install solar to offset a single common area load (1 meter)
  • Install solar to offset multiple tenant and/or common area loads (2+ meters)

For systems that offset a single meter, net energy metering (NEM) will be used.

For systems that offset multiple meters on a property, virtual net energy metering will be used (VNEM). To learn more about virtual net metering for apartments and condos, visit About Virtual Net Metering.

Different versions of NEM and VNEM are offered throughout the country. Check with your local utility to see which programs they offer. 

How does PV work?

For systems offsetting just a single meter meter and using NEM, the following graphic explains how solar electricity is produced, where the energy flows and the bill crediting mechanism known as "net energy metering."

  1. Individual photovoltaic (PV) cells are embedded onto panels. Sunlight striking the panels is chemically converted into direct current (DC) electricity
  2. The DC electricity goes to an inverter that transforms it into alternating current (AC) for use at your site.
  3. The utility meter records the net amount of energy (in kilowatt-hours or kWh) consumed. When the system creates more electricity than needed on-site, the meter will “spin backward” and the excess electricity is released onto the electric grid and “credited” to your utility account. These credits help offset the cost of kWh usage at night or on cloudy days when PV systems are not producing as much electricity.

For systems offsetting multiple tenant and/or common area meters and using VNEM, the following graphic explains how solar electricity is produced, where the energy flows and the bill crediting mechanism known as “virtual net energy metering.” VNEM is the billing arrangement that allows a single solar system to be shared among multiple onsite “benefitting accounts,” which may include both tenant and common area accounts on the same property. The monthly solar generation is divvied out to the participating accounts by a predetermined percentages that are defined by the property owner. Using those percent allocations, solar credits are applied directly to the multiple account holders’ utility bills.

The VNEM program in California’s IOUs includes two sub-tariffs, one designed for the affordable-housing sector and one designed for the general-market sector. To learn more, visit About Virtual Net Metering.

multiple meters

  1. Individual photovoltaic (PV) cells are embedded onto panels. Sunlight striking the panels is chemically converted into direct current (DC) electricity.
  2. The DC electricity goes to an inverter that transforms it into alternating current (AC) electricity.
  3. The total solar production is recorded by a “generation meter” and is sent back to the grid to be virtually allocated out to each benefitting utility accounts at the property.

How can I compare PV panels?

PV panels can be evaluated by cost, efficiency and power capacity. Typically the higher the power rating and efficiency, the higher the panel cost. Discuss with your contractor about the expected performance of each type of panel to understand if the kWh production from a higher efficiency rating may offset the higher cost of the panel.

For more information on evaluating PV panels visit the EnergySage Solar Marketplace.

How do I choose an inverter?

There are two types of inverters: central and micro.

Central inverters – One individual inverter per array. This is the classic technology that is installed with most solar systems. The kW size of these inverters is determined by the total number of panels linked to it. Therefore, any plans to increase the system size due to future appliance additions, should be considered during the initial stages of design. While the main drawback of central inverters is performance limitations, such as shading tolerance, this can be improved with the installation of power optimizers.

Microinverters – One individual inverter per panel. Microinverters allow overall systems to be more tolerant to shade by allowing electrons to bypass any shaded cells, avoiding a severe drop in total production and allowing for more flexible system placement. They more easily allow for future panel additions by simply adding an additional microinverter for each additional panel.

Comparison of Inverter Options

 Central InverterCentral Inverter with Power OptimizersMicroinverters
Tolerant to shadeNo, one or two shaded panels can affect the power output of the total arrayYes, a mechanism bypasses the shaded panelYes, shade from one panel will not affect the other panels in the system
Flexibility in system designYes, installing a higher wattage inverter can allow for adding panels in one array (azimuth and tilt may be a factor)Yes, panels can be installed in multiple tilts and orientationsYes, the tilt and orientation of one panel will not affect other panels in the system
Cost$$$$
Easy system size increases*No, the central inverter is sized to the capacity of the entire systemNo, the central inverter is sized to the capacity of the entire systemYes, since each panel has its own inverter, your options are open for system expansion
Warranty10-12 years10-12 years for the central inverter, 25 years for the power optimizers25 years
Panel selectionUnlimitedUnlimitedLimited

*If you think you may want to add panels to your solar PV system in the future, it may be more cost-effective to install the infrastructure (racking, wiring, conduit, upsized inverter size) during the original installation.

Will monitoring be included?

Both central inverters and microinverters have the option to include online monitoring that may come at an additional cost. If you lease the system or enter into a power purchase agreement (PPA), monitoring will be included in the package. With a monitoring system, you will be able to track your PV system’s production on your smartphone or computer.

Benefits of monitoring your system

  • Panel-level and real-time production visibility
  • Identify system issues/failure quickly to minimize system production losses
  • Easy to troubleshoot cause of system issues

Do solar panels and inverters come with a warranty?

PV panels come with a 25-year production warranty. A central inverter comes with a 10-year warranty, while microinverters come with a 25-year warranty. Most central inverter manufacturers offer a supplementary 10-year extended warranty at an additional cost.

The manufacturer warranties do not cover damage from natural disasters. Adding your solar PV system to your homeowner’s insurance policy is highly recommended.

What size of PV system should I install?

Every site is different and the needs of the system owner vary. System size depends on several factors including how much electricity (kWh) is consumed on site on an annual basis, the orientation and tilt of the system, the available space for the solar PV system and capital.

The first step is to compile your last 12 months of electricity consumption. Next you will want to determine how much you want to save on your electricity bill and how much you want to spend.

Take the next step: System Costs & Incentives