The benefits of solar power are starting to spread beyond the single-family home.

For legal and practical reasons, installations of solar power have largely bypassed buildings with multiple residential units. Laws in most states, for example, require each solar-power system to have only one meter.

Such laws, devised in large part to prevent the rise of rival power suppliers, also prevent different users in the same building from sharing a system. Individuals in condo or co-op settings who want their own solar, meanwhile, face other obstacles such as limited roof space and the hassle of getting approval from other residents or boards.

In recent years, however, surging interest in solar power has led legislators and utilities to revise some of these laws and to create innovative utility programs that encourage using solar power in multifamily dwellings.

It only makes sense. Utilities can benefit because solar power can reduce heavy electricity loads and help prevent outages. There's also a question of equity: In many places, apartment and condo dwellers pay higher utility bills to help cover the cost of solar-rebate programs, even when they can't take advantage of those programs themselves.

Solar has long been thought of as an elitist resource, says Shaun Chapman, East Coast campaigns director for Vote Solar Initiative, a San Francisco-based nonprofit promoting solar legislation in the U.S. The challenge now, Mr. Chapman says, is, "How do we get it to everyone?"

The California Public Utilities Commission has taken a step in that direction with a new ruling, set to take effect next month, that will make it easier for affordable-housing properties to install solar power in multifamily buildings. As a system produces power, its electricity feeds into the larger grid. The utility company measures that power and awards credit to the electricity bills of each unit in the building. A tenant's credit depends on the size of his or her unit. This type of arrangement is known as virtual net metering, because instead of using individual meters, the utility uses a space-based or another formula to estimate each customer's power usage.

Owners of the affordable-housing developments will pay for installation but can recover their costs by charging renters a flat monthly fee -- if the project helps reduce the tenants' utility bills. Owners will benefit, too, from lower costs for common areas, like hallways. To help pay for the installation, owners earn credits based on the size of common areas. Those savings can also help keep rents down.
Serving Many Goals

"These multifamily-tenant buildings are ideal sites for solar," says Curtis Seymour, energy adviser for the California PUC. "Opening up the market to a broader sector of customers," he adds, benefits all California residents by serving "the aggregate goals of the state, to reduce greenhouse-gas emissions and to increase renewable energy production."

Mr. Seymour says the commission has received many inquiries from owners of multifamily buildings -- not just in affordable housing. He says the commission will consider extending the program to regular multifamily housing, since renters in apartment buildings could also reap savings and credits in their individual utility bills. Similarly, landlords who install solar could recover their costs through monthly fees or small rent increases, and make their buildings more attractive to renters seeking environmentally friendly apartments and lower electricity bills.

The one-meter, one-system rule shows signs of eroding in other states as well. Some that allow net metering, however, limit tax rebates for installations to relatively small systems. Pennsylvania, for example, has a cap of 50 kilowatts -- power for about a dozen apartments -- on systems eligible for rebates.
New York State Incentives

New York state is giving condominium and co-operative owners a reduction on their state income tax if their buildings install solar power. The rebate allows 25% of a system's cost to be divided among the owners. The same tax break is granted for installing solar power in single-family buildings.

"We get several calls per week from co-ops and have five to 10 proposals outstanding," says Richard Klein, president of New York-based solar-installation company Quixotic Systems Inc.

U.S. Energy Group, a real-estate and energy-conservation company in New York, is buying a 24.85 kilowatt solar-power system to power common-area lighting and other electricity use in its six-story 120-unit co-op building in Fresh Meadows, N.Y. "I intend to do this in every building," says Gerald Pindus, chief executive of U.S. Energy Group, which owns 15 buildings with a total of about a thousand apartments in the New York metropolitan area.

By By YULIYA CHERNOVA
Courtesy of The Wall Street Journal