By Mallory Bulman | Multi-Housing News
Renewable energy is alive and well in California, according to industry panelists at Realcomm 2017 and management at the solar powered Solterra EcoLuxury Apartments.
With the recent announcement that the United States is planning to back out of the Paris climate agreement, many are confused and concerned about the future of renewable energy. At Realcomm 2017, a commercial real estate industry conference centered around technology, automation and innovation, the topic of renewable energy was ubiquitous, and industry leaders are taking charge of implementing energy savings measures as well as finding new solutions.
Aside from panels on energy efficiency and technology, MHN also had the opportunity to tour Solterra ExoLuxury Apartments in San Diego, developed by the family-owned H.G. Fenton Company, as part of the conference events. Seeing an eco-friendly community that was touted by Fox 5 San Diego as the county’s first all-solar apartments during its construction in 2013, as well as hearing from real estate professionals who are in support of taking measures to conserve energy, it was clear that politics notwithstanding, the United States and the real estate industry will continue to find innovative and eco-friendly means of producing, using and reaping the benefits of renewable energy.
Solterra Apartments is known for its solar system, which powers all 114 units and when power is left over, the common areas. The most prominent panels are arranged on a hillside, where they can receive the most daylight rays, but others are located inconspicuously, like those on top of porte-cocheres in the parking lot, which shade cars from the Southern California sun while harnessing energy. Solar energy is also used to enable heating in the pool and spa areas. According to a live counter on the community’s website and displayed in the common-area clubhouse, the community has generated more than 1.5 million KWH to date.
“We are looking at doing energy for some of the same reasons: we want to lower the cost of operating the building,” said Marc Gittleman, executive vice president of property services at Rising Realty during a panel. “Climate changes and the requirements in the world of what investors are looking at change.”
In terms of energy-saving technology, what investors and renters are looking for is swiftly changing. At Solterra, the Nest thermostats in each unit, which include web-enabled control, are not enough for residents looking for a more hands-on approach to managing their energy use. According to management on the tour, new higher-end units will offer a package that includes an Amazon Echo system and Rainforest automation systems.
“The point that we’re trying to make is investors want to invest in projects that produce returns doing good things and tenants in the buildings want to be able occupy space where they don’t feel like the power to make their widget is coming from a plant that’s burning puppies or something,” Gittleman said.
In 2007, the California Public Utilities Commission adopted the goal for all commercial buildings to achieve zero net energy standards by 2030 in its Integrated Energy Policy Report. According to the California Public utilities Commission, residential properties consume nearly one-third of the total energy used in the state.
Perry Shonfeld, principal at LBA Realty, said in a panel that he sees a significant amount of venture capital going into solutions for managing and analyzing energy use. “I think it’s a secular trend that owners not only want something that will provide you analytics so you can capitalize and make sense (of the data), but it’s part of your brand; I think it’s part of your story. I think the more corporate America catches on, the capital will demand it. If the capital demands it and the tenant demands it, it’s going to take off,” he said.
One thing that capital is demanding is electric vehicle charging capabilities. The Solterra community currently has select units with charging stations, but they plan to expand as demand grows. “These things are not a leap of faith. We met with Tesla a couple months ago, and it blew me away…I walked out of there thinking ‘This is an energy company, not a car company,'” Shonfeld said. He added that as battery technology improves and prices decrease, electric vehicles are bound to be the car of the future.
Solar-to-electric batteries are not just a concept used by car companies, but is one that many buildings are exploring as well. When producing solar energy, a property must use any excess energy or sell it back to the utility, which doesn’t always pay off. Both the management at Solterra and the panelists agreed that battery storage of renewable energy will become more feasible as the technology improves.
“In the not-too-distant future, if you don’t have this, you’re going to be viewed as antiquated. I think the indecision is a comfortable place to be because everybody else is there but in two years you’ll wake up and 30, 40 or 50 percent of the industry has gone to the other camp. You can no longer sit still and still feel comfortable,” said Drew Torbin of Black Bear Energy, a moderator at the Realcomm panel.
“The future of power and even the future of energy is only electric. It’s not oil, gas or hydrogen. The distribution system is here and the supply for the concept of our life span and 100 generations from now is indefinite and free,” said Gittleman.
Storage of energy seems to be the technological barrier to battery power, and Gitttleman pointed out that the capacity for solar storage is increasing and the price is decreasing, which he expects to continue. Shonfeld pointed out that by producing, storing and using energy at a property, the relationship between the utility and the resident will dissipate, and he sees significant value in that.
“Our tenants are environmentally friendly. We find that they’re interested in these things, and it’s important to them. If that means we have to put a little more work into being smart, it’s well invested,” said Gittleman.