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Harness Solar Power: Increase Property Value

15 February 2024

Harness Solar Power:  Increase Property Value

Your roof isn't just a structure; it's a valuable asset.


Your building's roof represents untapped potential, far beyond mere protection from the elements. It's a critical aspect of your property's rentable square footage. Consider this: installing solar panels on a 150,000-square-foot roof could substantially elevate your property's value by hundreds of thousands, if not millions, of dollar. 


Navigating the intricacies and advantages of solar is essential, especially considering the array of state and federal incentives that influence economic outcomes. With Tandem's expertise, we can guide you through these complexities and tailor the best solution for your specific needs.


The value per square foot or stabilization metrics of a building are significantly enhanced with the deployment of solar energy. The degree of improvement varies depending on the specific project, but much like the valuation of a new rental lease, our focus is primarily on utilizing cap rates to gauge potential outcomes.


For example, consider an industrial property in New Jersey with an average cap rate around 5%. If this property features a 150,000-square-foot roof generating $100,000 in annual lease payments with escalators, its asset value could increase by approximately $2 million.


Understanding the intricate relationship between real estate values and cap rates is essential for property owners and investors alike. Typically, when cap rates decline, property values tend to increase—an indication of the inverse correlation between these two metrics. However, recent years have seen numerous sectors experiencing a significant 200 basis point uptick in cap rates, underscoring the volatility inherent in these market dynamics. 


Unlock Value with Solar Leasing Options


Front of the Meter: Solar Lease

With a solar lease from Tandem, property owners can monetize their roof space without any upfront costs. Tandem owns and operates the solar system, paying lease payments to the asset owners. This increases the property's rent per square foot, boosting the net operating income (NOI) with zero capital expenditures.


Behind the Meter: Power Purchase Agreement (PPA)

Opting for a power purchase agreement (PPA) with Tandem allows property owners to access solar power at a discounted rate compared to the retail rate. Tandem owns and operates the solar system, providing clean energy to the site while reducing operating costs for the property owner or their tenant without any capital expenditures.


Contact us today to seize this opportunity and explore the potential for unlocking new valuable long-term income streams.

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Contact our team to discuss your renewable energy opportunities.

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