How I Learned to Ask the Right Question, Pitch the Right Benefits, and Win the Deal

When I fly over multifamily properties, all I see is wasted opportunity.

Thousands of roofs. Acres of empty space. Each one could be generating $600 USD per unit in additional net operating income (NOI), but instead they just sit there, baking in the sun.

Property owners spend weeks analyzing whether granite countertops might generate $25 more in rent than laminate. They run the numbers on dog parks, covered parking, upgraded appliances. They optimize every square inch of their properties for value creation. Then, they just stop at the roofline.

The Split Incentive Problem

There are 22 million apartment units in the U.S. We have deployed solar across 2,500+ units so far. More than 99% of multifamily properties do not have solar because of one reason: the split incentive problem, which I summarize like this:

Owner pays for solar → Tenant gets cheaper electricity → Owner has zero reason to do it.

Tenants cannot install solar themselves because they do not own the property. Owners will not install solar because the benefit goes to tenants. That means nobody does anything, and traditional solar companies have given up on the problem entirely.

Owners focus only on common areas—leasing offices, fitness centers, hallway lights, pools, laundry rooms. Those represent about 5% of total electricity use in multifamily buildings. The other 95%? Tenant meters. Completely ignored.

For eight years, I heard the same thing. Policy experts said we would need to change utility regulations. Solar companies said it was not worth the hassle. Real estate executives said tenants would never agree to it.

I did not get into this business to accept constraints. I got into it because I was buying apartment buildings and needed to figure out how to make solar work.

Everyone Was Looking at the Wrong Problem

Solar technology has existed for 50+ years. Policy frameworks exist in all 50 states. The installation process is straightforward.

Everyone kept telling me the barriers were technical or regulatory. They were not.

When we started buying properties, we realized we could handle the installation. No problem there. The real issues were operational: How do you bill tenants for solar? How do you monitor all those individual systems? How do you make it work financially for owners while still benefiting tenants?

For years, people in the industry had been asking, “Why won’t this work?”

But the better question to ask was, “How do we structure the market so owners make money and tenants save money at the same time?”

We needed software. At Shine, we built software that solves this challenge. Owners can now install solar on tenant meters and monetize it.

Our competitors are software companies. They developed their approach from a tech angle, using power purchase agreements (PPAs) that charge tenants per unit of electricity generated.

PPAs create three problems. They are only allowed in 18 states. They are confusing for tenants (“Why do I save $40 in summer months but only $25 in winter months?”) And solar production is seasonal. You generate twice as much solar electricity in summer as winter, which means twice as much income in summer. If you sell your property in autumn, you get twice the solar value as you would selling in spring.

We did not build software to sell to real estate companies. We built it for ourselves as owners. From an owner's perspective, the solution was obvious: a solar lease, not a PPA.

Tenants pay a flat monthly fee to lease the solar equipment. Same payment every month. Works in all 50 states. Stabilizes the income stream, so owners get consistent value regardless of when they sell.

We just had to solve the business model.

Everyone Said Tenants Would Never Go for It

They said tenants did not trust solar companies. They said tenants would not understand the technology. They said tenants would not sign lease addendums.

We have now deployed across 2,500+ units. Zero pushback from tenants.

We tell them: "The grid charges you 16 cents per kilowatt hour. We charge you 15." When the value is that obvious, people do not need convincing.

Tenants save money. Owners make money. Both win.

On average, we install 2.5 kilowatts per apartment unit. Gross cost: $6,625 USD. After the federal tax credit: $4,372 USD. That installation generates $560 USD per year in NOI.

Take that $560 and divide it by a cap rate of 5%. That's $11,200 USD in increased property value per unit. You invest $4,300 USD and increase your property value by $11,200 USD: A 3x return on equity.

We are not cutting expenses. We are increasing income. Traditional solar reduces your utility bill. We add a new income line.

Dollars Make Projects Happen

I was on a call recently with someone who has been in the Environmental, Social, and Governance (ESG) space for 20 years. When she started, the only sustainability projects that got approved were ones that made financial sense. There was no ESG department. Just the question: "Does this make money or not?"

Somewhere along the line, that shifted. Sustainability became associated with philanthropy. With feel-good projects that do not pencil out. With endless analysis and reporting instead of actual implementation.

Green labels and ESG reports do not make projects happen. Dollars do.

We tell people all the time: This property is not a good fit. Do not waste your time on the analysis. I have done this long enough that I can look at a building, know where it is, and tell you immediately if it makes sense.

Nobody in the financial realm cares about your environmental story. They care about the numbers.

We often start our sales process communicating with an ESG department. At some point, that decision leaves ESG and goes to the investment committee. Financially minded people do not care about carbon reduction. They care about returns. The sooner you hone your pitch on the financials, the better.

Most solar companies see Texas as a bad market. We see it as a great market. They are pitching environmental benefits. We are pitching income.

Start Fresh

If you are a multifamily owner considering solar, take everything you know about solar and throw it out the window. Come into the conversation with no expectations, no assumptions.

Everything you have learned about solar to date does not apply here. The split incentive problem was never unsolvable. Just an unsolved business model challenge.

Right now, owners are optimizing countertops while ignoring thousands of square feet of income-generating potential directly above their tenants' heads.

Every roof is a missed income stream—until you make it one.

Contributed to EO by Owen Barrett, the founder and CEO of Shine, which helps multifamily owners turn unused roof space into profitable solar installations. After managing $60 million USD in clean-tech projects and scaling his first company to a successful exit, Owen founded Shine to solve the split incentive problem that kept 99%+ of multifamily solar potential untapped.