3 reasons why real estate companies should integrate multi tenant self consumption

3 reasons why real estate companies should integrate multi tenant self consumption

Following the introduction of the subsidy law of the same name in mid-2017, the term mutli tenant self consumption (in German: “Mieterstrom”) has become increasingly popular. However, it is not self-explanatory. Multi tenant self consumption means: electricity is generated on site in multi tenant buildings by means of photovoltaic systems or combined heat and power units and is largely consumed directly by the end users of the property. The end users can be both private households and companies.

The advantages are obvious

Tenants become participants in the energy system transition and benefit from favorable electricity rates. Property owners enhance the value of their real estate with a photovoltaic (PV) system and earn a share of the electricity revenue. For project developers, however, multi tenant self consumption is at first glance associated with additional effort, costs and a high degree of complexity.

Appearances are deceptive. Even for developers who hand over real estate projects to investors or homeowner associations after construction is completed, there are at least three good reasons for multi tenant self consumption.

Reducing construction costs

Some of the local electricity generated as part of multi tenant self consumption can be credited for the building’s primary energy balance. The new Building Energy Code allows it to be counted much more extensively than before. PV multi tenant self consumption reduces the primary energy balance by up to 20%. Thus, higher standards can be achieved more easily

The Building Energy Act again significantly expands the creditability of multi tenant self consumption. With § 23 GEG, the primary energy demand can now be “artificially” reduced depending on the PV system output and the electrical energy demand of the system technology in the building (circulation pump, ventilation system, but also heat pump). A maximum reduction of 20% is possible, and up to 25% if additional battery storage is used. This leads to a higher energy standard being possible in new buildings with PV systems and digital measurement technology for consumption visualization and billing.

The highlight: EINHUNDERT offers multi tenant self consumption with the COMFORT package as a complete service. Also with legally secure transitional arrangements between real estate developer and owner(s). Thus, thanks to multi tenant self consumption contracting, developers can reduce construction costs on the bottom line.

By the way: Ongoing analysis of the primary energy balance for real estate in real time is part of EINHUNDERT’s digital multi tenant self consumption platform.

Access to the KfW 40 Plus standard

The Credit Institute for Reconstruction (KfW), a German state-owned development bank, provides subsidies for energy-efficient construction. KfW’s goal is to motivate developers to design buildings with the lowest possible primary energy consumption. The KfW 40 Plus standard receives particularly strong support – up to €30,000 per residential unit is available.

To meet KfW 40 Plus, the primary energy balance must not only be 60% below that of a reference building; in addition, electricity must be generated sustainably on site and used predominantly in the building. For multi tenant buildings, this means in plain language: multi tenant self consumption, mostly with photovoltaics.

Here’s an example: for 20 residential units, the KfW subsidy for 40 Plus amounts to €600,000, which is €120,000 more than for Standard 40. The investment required for this usually pays off significantly for developers. Especially if the contracting offer from EINHUNDERT is used for the PV system and metering technology. The majority of the investment is not incurred by the developer – the subsidy still flows.

Increasing project value and marketability

Especially in the segment of mid-range and upscale condominiums, the trend is clearly toward value-added services. Developers are incorporating e-mobility, car sharing, neighborhood apps, smart homes and other innovations into their projects. Providing clean local energy is a logical next step.

Thanks to the tenant portal, residents always have an overview of their consumption and pay exactly what they have used each month. In this way, EINHUNDERT’s solution fits seamlessly into real estate projects that target digitally savvy buyers. Micro-living concepts and serviced apartment projects also benefit in particular – here, the future real estate operator can score points with clean energy and a discounted warm rent (includes heating, water and maintenance of the building).