According to the deal, Altus will install its solar panels on the rooftops among Trammel’s industrial developments. Altus will pay rent to Trammel for hosting its solar panels, while symbiotically selling the clean energy to Trammel’s tenants. Adam Weers, who is the Chief Operating Officer of Trammel, reportedly said that deal will allow Trammel to minimize its dependence on the electricity grid, and will entice both tenants and investors who want buildings with lower carbon footprints, according to The Wall Street Journal.
The size and scale of this deal is particularly as the installation of solar panels on commercial properties has increased at a fairly sluggish rate compared to the residential sector. 4 percent of commercial properties in the U.S. (with at least 10,000 sq ft of roof space) have solar panels, while 5 percent of the roofs of single-family homes in the U.S. have solar panels, according to Wood Mackenzie, an energy-consulting company. While that difference may seem marginal, the disparity is more visible with the projected growth rate. Wood Mackenzie’s data indicates that solar panel installation whill increase in the commercial sector by 5.7 percent by 2025 and 11.1 percent by 2030, whereas solar panel installation on residential homes will increase by 7.9 percent in 2025 and 12.7 percent by 2030.
This lag in adoption is chalked up to economies of scale. Solar panels generally pay for themselves after 5 years, but the up-front cost of installation is fairly steep. The amount of solar panels needed to sufficiently power a single-family home pales in comparison to the amount needed to power a large-scale commercial property, leaving commercial landlords to see spinning stars after looking at the price tag of the initial investment. But a synergetic deal between a commercial developer and a solar energy company opens a new avenue to achieve that scalability.