How to Calculate the NOI Lift From Adding Solar to a Multifamily Property

Underwriting solar isn't hard, but the spreadsheets going around the industry are missing three of the four numbers that actually matter. Here's a clean model.

The four-variable model

Strip away the noise, and projecting solar NOI on a rental property comes down to:

Annual NOI lift = (kWh generated × $/kWh tenant rate × take rate)
                - operating fees
                - financing payment (if PPA)

Most calculators online stop at the first line. That's the gross revenue number — not yours to keep.

Step 1: Estimate generation

A reasonable rule of thumb for the continental US:

Sunbelt (FL, TX, AZ, CA, NV): 1,500–1,800 kWh per kW installed per year
Mid-Atlantic / Midwest: 1,200–1,400 kWh / kW / year
Pacific Northwest / Northeast: 1,000–1,200 kWh / kW / year

A 12-unit property typically supports a 60–90 kW system. So in Tampa: 75 kW × 1,650 = ~124,000 kWh per year.

Step 2: Set the tenant rate

The right rate is 10–25% below the utility's retail rate. Tenants need an obvious win or they won't enroll. If the local utility charges $0.155/kWh, price solar at $0.125–$0.135.

124,000 kWh × $0.13 = $16,120 gross revenue

Step 3: Apply a realistic take rate

Not every unit enrolls on day one. Underwrite at a 75% take rate for stabilized billing within 90 days. Newer NOI properties hit 85–92% after a leasing cycle.

$16,120 × 0.75 = $12,090 in stabilized year one

Step 4: Subtract real fees

Platform / billing fee: 5–8% of revenue
Payment processing: ~2.2% on ACH-skewed mix
O&M reserve: 1% of revenue (covers inverter swaps, panel cleaning, monitoring)

Net: roughly $10,800–$11,200 per year on a 12-unit, with no capex.

The variable everyone forgets

The fifth, hidden variable: building value appreciation. At market cap rates (5.5%–7%), $11,000 of new recurring NOI = $157,000–$200,000 of asset value. That's the line item that turns this from a "nice extra" into a strategic decision.

What changes the model

Financed (PPA): subtract ~40–55% for the financing payment in years 1–15, then keep 100% from year 16 onward.
Owned: full revenue from day one, but you fund the install.
HOAs / common areas: meter the common load first, sell the surplus.

Don't underwrite in a spreadsheet alone. Run your property through our calculator and we'll send a real, financeable estimate.

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