Cut Your Solar Payback Time In Half By Billing Your Tenants For Electricity You Generate For Free

This year I decided to go solar at my house. The projections called for me to get the payback period within 15 years (and only 9 years if I manage to get all the tax rebates which is unlikely). I was not satisfied with a 15 year payback so I started thinking about ways I could cut that down to less than 5 years instead. Seemed to me there are 2 ways to do that :

  1. Use electricity instead of fossil fuels (buy an electric car, install an efficient electric air-air heat pump instead of using propane to heat)
  2. Sell some of the electricity I produce back to my tenants

I decided that the best course of action was to do both. Since I could not afford an electric car with the range I would need I purchased a 12,000 BTU Mitsubishi Air/Air heat exchanger from Sylvaine.com for $1599 shipped (available here). As a side not you need to get a line set with the heat pump which will add another $99-200 depending on the length. There are much cheaper Chinese units out (like 1/2 the price) there but my hope is that I’ll be able to get parts for it when it breaks and that it will last at least 10 years. I talked to lots of people with Mitsubishi heat pumps and they all love them. One thing that I really hate is this disposable society where people just throw things away rather than trying to fix them. I will do a separate article in the future on installing the heat pump and a review.

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A Minisplit heat pump can heat with about 1/3 the amount of electricity as an electric space heater

This article is mainly talking about the process of connecting the breaker boxes for my tenants together and turning them into sub-panels and setting it up so that their electricity usage is automatically tracked and they are billed every month using Eyedro energy monitors.

There are two ways to tie the tenants breaker boxes to a solar installation. One way is to try to tie together the main service lines which is difficult from a Nyseg and permit standpoint. The other way is to rewire the tenant’s panels as sub-panels and then connect them with 4 wire service lines. By a far margin the easier way to do this is the second way. The disadvantage is that you have to rewire the individual sub-panels to separate and isolate the common wires from the grounds. I’ll discuss how to do this later in the article.

My first concern about selling electricity to my tenants was whether or not it was legal to do. It turns out that as long as you are selling electricity at the same rate or cheaper than what you are getting billed by Nyseg, it is legal to do this in NY state. The next issue I had to overcome was metering.

Electricity Monitoring

I didn’t want to deal with the hassle of installing large electrical meters and having to read them every month and calculate a bill to send my tenants. Luckily there is a large number of power meters you can install inside your breaker box that monitors electricity usage and send you ‘estimated bills’ which I can use to send to my tenants as ‘actual bills’. This automates the entire process and makes it so I don’t have to babysit or add any additional efforts to make it happen.

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The best $119 electricity monitor system I can find for ethernet (not wireless)

Almost all the electricity monitors on the market work on Wifi. This is problematic because when the wifi loses the connection (as it often does) then you’re electricity is not getting monitored and not getting billed. I’ve been doing computer support for about 30 years now and whenever I have the opportunity to hardwire something with ethernet instead of wifi I always do. The units I ended up settling on are called the Eyedro EHEM1-LV units from Amazon for $119 available here. I have nothing but good things to say about these units and the support I’ve gotten from Eyedro. My solar installation gave me a Neurio monitor, but the Eyedro system has way more options and is much more configurable. You will need one monitor for every unit you want to bill. Under the Reports section of the menu you need to add your tenants email address in the “Additional Recipients” section of the system.

You need to add the tenants email to Additional Recipients on the bottom right by clicking Edit Configuration

Remember that in NYS it is illegal to charge your tenants a higher electricity rate per kwh than what you pay to your service provider (mine is 11.3 cents per kWh). You can tell your tenants that their bills should be about $20/mth lower because they will not be hit with meter fees and a bunch of other taxes. You will want to put these meters in the main panel and put the clamps around the two hot wires that come out of the breaker you use to power your sub panel.

The Eyedro shows tenants current usage and historical usage with a sharable URL, they do not need an Eyedro account

Turning a Electrical Panel into a Sub Panel

You can turn most electrical panels into sub panels by just running a line from one breaker of the main panel to another breaker of the sub panel. You want that breaker to be as high of an amperage as you can get for a breaker, I was able to find 80 amp breakers for both sides. My main panel was a 200 Amp service which was a very old Kutler Hammer which is hard to get parts for nowadays. I was able to find 2 used 80 amp breakers on ebay for about $45 each shipped. The other panels were Square-D which are very easy to find breakers for. I highly recommend using copper wire between panels, as it is much easier to work with than aluminum and does not corrode over time.

This is the cable you’re looking for an 80 Amp Sub-Panel tie-in

I ended up buying 4 conductor SER Service Entrance Cable that was 4-4-4-6 meaning that the three insulated conductors were 4 gauge and the ground wire was 6 gauge. This cable is extremely expensive, I paid about $4 a foot (available here), but it’s worth it if your runs are less than 50 feet. If your run is over 50 feet to the sub panel you can use 2-2-2-4 Aluminum wire (available here for $1.37 a foot) but it’s going to be really incredibly hard to work with. I don’t recommend any other cable other than SER 4 conductor cable for tying a main panel to a sub panel, and if you want to meet code it is what you should use. It is also important to use dielectric grease on your connections. Make sure that you torque the wires in the breakers down as tightly as what it says on the breaker. You do not want these cables to be loose.

On this standard Square-D 100 amp panel you can see the metal bar across the top that ties the two ground\common blocks together

Inside the breaker panel you will need to sort the ground wires on one side and the commons on the other. It is very important that there is no commons on the ground block and vise versa. The other thing you will need to do is either remove the metal bar along the top that ties the two sides together or remove it, cut it and then put it back in making sure that there is at least a sizable 1/4″ or more gap between the two sides of the bar. On some panels you need the bar there to support the ground or common blocks, on other panels it doesn’t seem to matter.

If the wires don’t reach from one side to the other you will need to lengthen them, if the wires are very thick you may want to use a wire splice. I try to keep the ground and common wires as neat as I can as that is the first thing the electrical inspector sees when they look in your box.

Once the sub panels are setup I usually put the main breaker switch to the OFF position and then put some electrical tape over it so people can turn it on. Also I label the new 80 amp breaker as the MAIN breaker so it is clear to the tenants which breaker is the main breaker.

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A breaker box that only a mother could love

Most tenants are happy to pay $20 less on their electricity bill and also not having to deal with Nyseg. The biggest hassle of doing this setup was trying to get Nyseg to pull the meters for my tenants. At one point both me and my tenant had spent over 3 hours combined on the phone mostly on hold with Nyseg. In retrospect I should have just clipped their tag, pulled the meter myself and then called Nyseg and told them the meter was pulled and let them figure it all out.

The original payback on my solar array was a 15 year payback if you didn’t count the tax incentives which gets cut down to 9 years. When you start calculating in the income from billing your tenants the payback period gets cut down to under 5 years. Considering that it only cost me about $600 total to tie in my two tenant’s panels that means that the initial investment of tying them in should be paid off in less than a year (assuming my tenants use about $25 a month in electricity).

When I was trying to figure this out I couldn’t find anyone on the internet that was doing this. To me it is crazy to be a landlord and NOT doing something like this. Most of the Nyserta grants only go into affect if you’re living at the property, as well as the tax credits, but if you are a landlord and have tenants living on your property you should totally go solar and cut your payback period down to less than 5 years by billing your tenants for power that you generate for free.

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I rated the work that Renovus did for me as a 10 out of 10, it was much better than Cats

It’s the American way.

If anyone lives in the greater Ithaca area and is thinking about going solar please reach out to me so I can talk about my experiences with Renovus Solar.  They have a referral program and I kick a sizable chunk of that referral reward back to you.

I want to save the planet more than I want more money in my bank account.

A special thanks to Robert from Sparks Electric for helping me figure this whole thing out. I met Robert on a ski lift decades ago and he is one of the nicest guys I know and knows the NYS electrical codes better than anyone I have yet to meet.

 

 

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