The Economics of Solar NOI: A Full P&L Walkthrough

Start with the revenue stack

Solar revenue on a rental property comes from three lines: (1) tenant billing at a sub-utility rate, (2) any state or utility performance incentives, and (3) SREC sales in states that still have an active market. On most US multifamily properties, ~90% of the revenue is line 1.

A worked example: 24 units, Tampa FL

At a 6% cap rate, that $17.7K is worth ~$295K of building value.

Sensitivity: what actually moves the number

• Local utility rate. A move from $0.12 to $0.16/kWh adds ~$8K/yr on this same building.
• Roof size / production ratio. Under-sized systems lose the fixed-cost leverage; oversized systems export at wholesale rates and dilute yield.
• Tenant enrollment %. Below 70% enrollment, the model gets fragile. Autopay + magic-link enrollment gets most portfolios to 85–90%.

Scaling to 96 units

The economics get better per unit at scale because monitoring, insurance, and billing overhead are largely fixed. A 96-unit property in the same market lands at ~$85K net NOI — nearly 5× the 24-unit result, not 4×.

Where owners leave money on the table

Two things: signing a 25-year PPA with no rate escalator (locks you below inflation), and letting the installer control the tenant relationship. NOI keeps the escalator aligned to local utility CPI and puts you — the owner — as the billing party of record.

Want to see what your roof could earn? Estimate your NOI lift or talk to our team.