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Guide on Photovoltaic Installation in a community of owners.

Self-consumption electricity is not something exclusive to single-family homes. Homeowner communities can also install solar panels and produce their own electricity. The Spanish government has recently changed the necessary majorities in owners' meetings to facilitate it. We explain what it is, how much it costs and how collective self-consumption can be managed.

 

Do you think that solar panels and self-consumption of electricity are only for those who live in single-family homes? We will reveal to you that this is not the case: installations for self-consumption can be installed in apartment buildings and there is a new regulation to make it easier to reach an agreement in the communities of owners.

By installing photovoltaic panels, all residents will be able to benefit from savings with photovoltaic energy and reduce their dependence on electricity companies and external providers.

 

What is a photovoltaic Installation in a community of owners?

It is a renewable energy installation for self-consumption that distributes electricity among a group of consumers (owners), according to a previously agreed distribution. For example, in a multi-story building, photovoltaic panels can be installed to distribute the electricity generated among the neighbours who have financed the installation.

Consumers are connected directly to the solar panels, without the electricity passing through the electrical distribution network.

As more electricity is usually produced at noon, when many neighbours are away from their homes, these installations usually take advantage of the "surplus compensation" system: they feed the energy not consumed into the network and receive financial compensation, since those kilowatts are deducted from your monthly bill according to an agreed price.

 

Types of installation for collective self-consumption

The communities of owners can consider various types of installation:

• To cover the electrical consumption of the building (lifts, stairs, garage, common areas...). In this case, the property of the installation corresponds to the community of owners.

• For homes: energy covers the cost of residents in their homes. The installation will be property of the neighbours who participate in it.

• For homes and common areas: it has enough capacity to cover the needs of the building and distribute energy to homes. The self-consumption installation will also be communal.

These types of installations need meters that controls how much energy is generated and to whom it is distributed.

 

Do all the neighbours have to agree?

A few months ago, the Spanish Horizontal Property Law was updated to facilitate the installation of self-consumption systems in multi-dwelling buildings. The majorities that are required are different if the installation is for common use or if the use will be exclusive to each neighbour.

For common use facilities. If the installation is going to cover the needs of the building, it is required:

• The favourable vote of the simple majority of the owners, who also represent the simple majority of the participation quotas, provided that the cost of the installation passed on annually does not exceed the amount of 12 ordinary monthly payments of common expenses. The cost is calculated once subsidies or public aid have been deducted and the financing, if any, has been applied.

• To calculate this majority, those of the absent owners who, after having received the invitation to the meeting, have decided not attended the meeting, but have been informed after the decision and have not objected within a period of 30 days, are counted as votes in favour.

• Owners who vote against cannot subsequently participate in the installation, so they will have to continue paying their common cost of electricity.

• The cost of these works and the loans or financing to carry them out are considered general expenses and are distributed according to the usual rules.

For private use facilities. If the system has a private use (this is the case if the energy is destined to the houses and not all the neighbours’ participants), the majority is not so strict, since it is only necessary:

• The favourable vote of one third of the members of the community who represent, in turn, one third of the participation quotas. In this case, the owners who vote against cannot be charged any cost of the installation, the adaptation of the common infrastructures or the maintenance of the system.

• The costs of upkeep and maintenance of the new infrastructure will be considered a common element. Any aspect of the self-consumption installation that is not explicitly regulated must have the approval of the owners' meeting.

 

  

How much does it cost to install solar panels on an apartment building?

Each installation is different and the cost can vary a lot, which also makes the amortization period fluctuate. In addition, you have to check the possible subsidies and if there is any IBI reduction in the municipality for the buildings that install them.

It is important to always request at least 3 quotes from specialized companies and have them do a study of the roof or available area to install the panels. The study has to indicate how much energy will be produced (potential energy), the project budget, how much of that energy can be used for self-consumption and how much will be fed into the network, and what the expected economic return is.

 

First, to determine the power of the installation

It is also necessary to study the daily consumption curves, since it is not the same to consume most of the electricity after eight in the evening, than to spend it in the morning, when the system is producing. Interested neighbours should monitor their consumption for some time. For the calculation of the total consumption, all the participants have to provide the data of their annual consumption, in addition to the electricity consumption of the community itself.

One of the "golden rules" of photovoltaic self-consumption is that all the electricity produced by the system must be consumed by its users. It doesn't matter if production is higher than consumption, since the energy that it is poured into the network is deducted from the energy that we buy, and that is the maximum that we are going to be compensated. The surplus energy is only paid if the installation is registered as a "producer" of electricity, something that is not profitable because it implies costs. The ideal would be to produce exactly the same as the installation consumes, but it is always better to fall short in power than for the panels to be oversized.

We advise that the installed power should not exceed 60% of the expected consumption.

 

A practical example of self-consumption in the community = real savings

To give you an idea, these would be the costs, the recommended power and the amortization periods with current prices for a building located in Madrid with a community of owners of 20 neighbours who decides to carry out a photovoltaic installation:

Installation for the consumption of common areas

• Bill for annual consumption without photovoltaic: 31,200 euros

• Power of the installation: 10 kWp of power (approximately 22 photovoltaic panels)

• Installation cost: 16,500 euros

• Estimated annual savings: 5,500 euros, more than 17%

• Investment amortization period: 3 years

 

Installation for the individual consumption of the neighbours

• Monthly consumption bill without photovoltaic (per neighbour): 60 euros/month

• Installation power: 1 kWp per neighbour

• Installation cost for each neighbour: 1,800 euros

• Estimated monthly savings: €50 per month

• Amortization period: 3 years

Joint installation, community and individual self-consumption

• Installation power: 30 kWp, 66 panels

• Installation cost: 47,000 euros

• Estimated savings: 17,000 euros per year

• Amortization period: 3 years

As you can see, the investment pays for itself in approximately three years.

 

How are costs and energy distributed?

It is necessary to distribute how the installation is going to be paid and how the energy it produces is going to be distributed. Both the economic participation agreement and the distribution of energy among the participants must be recorded in the minutes of the community of owners meeting.

 

Distribution of installation costs

The investment for installation and maintenance costs can be linked to the distribution of energy generated or follow other criteria, for example, the participation fees in the community of neighbours or any set by agreement of all the participants. The simplest option is for each consumer to contribute a part of the cost that is proportional to the share of energy distribution.

If a neighbour does not have the initial amount, it may be the community of owners or even another neighbour who advances the money.

 

Distribution of the energy produced

You can choose the distribution criteria: according to the power contracted by each neighbour in your home, according to the participation in the costs of the installation or according to the share in the community of owners.

Whatever it is, the distribution must be signed by all the participants. The coefficients can be the same for all hours or different for each hour of the year (up to 8,700 different coefficients for each consumer) depending on habits. The only restriction is that they add up to 1 for all hours.

 

Surplus compensation

If the installation is going to work with surplus compensation, it is necessary to notify the electricity supplier, agree on the compensation conditions and register in the self-consumption register.

 

Do all the neighbours have to be in the same electricity retailer?

No, it is not necessary, because it is the distribution company that reads the collective meter and knows how much energy is being generated in total. Afterwards, it will apply the distribution criterion that has been communicated to it and will pass the information to the commercial company of each consumer so that they can invoice each individual supply.

 

How is it billed?

In billing, three things can happen:

That all the energy you have used comes from your own installation and you do not consume anything from the general network: in this case, the amount of your consumption would be 0, but you would continue to pay fixed costs of your contract with the commercial electric company if you maintain it.

That you consume more than the quota that you have attributed: you will have to take the energy that you lack from the electricity company network and they will bill you for it, discounting what you have discharged at other times of the day. The more self-produced energy you consume, the greater the use of the installation because each self-generated kWh has a value up to three times higher than if it is compensated as a surplus. In other words, they can charge us three times more for the electricity we buy from the company than what the company pays us for the electricity we sell.

That you have consumed less than what you produce and pour more energy into the network than you spend. If your total consumption is lower than your electricity production, you could have a rest of energy without compensating, because there would not be enough consumption to deduct it.

 

Can I join later or unsubscribe?

Yes, self-consumption participants can join when the installation is already underway or unsubscribe. The energy sharing will have to be recalculated and all participants have to re-sign the sharing agreement. The change in coefficients must be communicated to the distributor that reads the meter some time in advance and keep them for a minimum of 4 months.

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As it is impossible to know in detail every case asked in this blog all our replies are given in good faith but we strongly suggest that you obtain private advice from a solicitor /and /or  architect who will be able to study in depth your own particular case.