Monday Morning, 9:47 AM
Advisor Giovana “Gio” Thermall was reading yet another headline about another proposed data center project when an email from Southern Electric popped up in her notifications. The subject: “Peak hours savings tips.” In the motion of swiping up to dismiss, she somehow opened it. There it was—a listicle with 5 things to do to lower energy usage and costs in peak hours.
After a quick scan, Gio wondered to herself what more could be done, particularly for the multifamily and industrial property owners and managers that she and her team advised. Land prices were already going crazy with data centers gobbling up anything with power access. If energy costs kept climbing alongside property values…
Gio quickly messaged her colleague Choosan Sun in Twist. huddle, your place, at 11?
Choosan replied shortly thereafter. Sure. Grab squagles.
Gio finished her reading and then jetted off to take a shower and head to Choosan’s, whose apartment was a leisurely 15-minute stroll away. On her way she picked up squagles from Ya’ Deli, which was on the ground floor of Choosan’s building.
Before Choosan could finish letting her in, Gio, with much enthusiasm, squagles in hand, started speaking. “My morning reading got me thinking about energy cost savings… what if we…” She then delved into the idea of adding solar roofs for industrial and multifamily properties that allowed them to be a quasi-utility provider. Tenants would consume building energy first, then the grid. But rather than selling energy back and having the friction of multiple bills, let’s recoup cost-plus through rents and actively communicate the lower energy cost benefit to tenants.
Choosan looked intrigued but it was also clear she had questions.
“What about the industrial tenants? They’re triple net.”
“They’ll still appreciate the savings. The kicker there is the asset appreciation from the investment and the tax savings that go with the spend. We’re not just depreciating buildings—we’re depreciating the system.”
“Hmm,” Choosan thought, “could be interesting. Let me model it to see what exactly we would be pitching.”
Tuesday Afternoon, 3:15 PM
Choosan had spent most of Monday evening and Tuesday morning buried in spreadsheets, utility data, and solar cost projections. Now she sat across from Gio at a corner table at Confluence Coffee, laptop open, notes scattered.
“Okay,” Choosan began, pulling up her first model. “I ran the numbers for both multifamily and industrial. Let’s start with multifamily since it’s more straightforward.”
THE MULTIFAMILY MODEL
“I used a 150-unit complex in the Austin metro area as our baseline. Average unit is about 900 square feet, typical Texas multifamily.” Choosan turned her screen toward Gio.
System Specifications:
Cost Analysis:
“Now here’s where it gets interesting,” Choosan said, highlighting a section. “Current common area electricity consumption for this property runs about 180,000 kWh annually—hallway lighting, elevators, fitness center, pool equipment, office. At 11.2 cents per kWh average commercial rate in Austin, that’s about $20,160 per year.”
“The system produces 375,000 kWh, which means we have about 195,000 kWh of excess production. Instead of selling it back to the grid at wholesale rates—maybe 3 to 4 cents per kWh—we reallocate it to tenant units.”
Gio leaned forward. “How do we structure that without creating billing nightmares?”
“That’s the beauty of the ‘total cost of rentership’ positioning. We don’t change the billing. We increase base rent by $22 per month per unit—$3,300 total monthly, $39,600 annually. But here’s the pitch: each unit gets an average of 108 kWh per month in solar allocation.”
Choosan pulled up a comparison chart. “Average Texas apartment uses about 1,045 kWh monthly. At current residential rates averaging 14.8 cents per kWh in Austin, that’s $154.66. With our 108 kWh solar allocation, they’re only buying 937 kWh from the grid, reducing their bill to $138.68. Their net savings: $15.98 per month, even after the $22 rent increase. Total cost goes from $154.66 to $160.68—only $6 more, but they’re contributing to renewable energy.”
“Wait,” Gio interrupted. “Why would they pay $6 more per month if it’s supposed to save them money?”
“Because we’re being conservative with the allocation and realistic about positioning. But watch this—” Choosan adjusted the model. “If we increase the rent by only $15 per month and reduce the solar allocation to 75 kWh per unit, tenants save $11.10 per month on electricity but only pay $15 more in rent. Net cost increase is only $3.90, and we’re still cashflow positive on the investment.”
Financial Returns:
“Under the conservative model—$22/month increase, full solar allocation:”
“But here’s the real kicker,” Choosan said, pulling up a depreciation schedule. “Modified Accelerated Cost Recovery System lets us depreciate the solar system over 5 years. For a property owner in the 35% tax bracket, that’s an additional $153,125 in tax savings over five years. Effective net investment drops to $284,375. New payback period: 4.8 years.”
Gio was already doing mental math. “And we’re showing lower tenant turnover because of the green amenity angle, plus we can market ‘solar-powered living’ which appeals to the under-35 demographic that makes up 60% of renters in Austin…”
“Exactly. Now let me show you the industrial model. This one’s even better.”
THE INDUSTRIAL MODEL
Choosan opened a second spreadsheet. “I modeled a 180,000 square foot industrial warehouse in the Dallas-Fort Worth area. Typical distribution center or light manufacturing setup.”
System Specifications:
Cost Analysis:
(Lower per-watt cost due to scale)
“Industrial properties are different beasts,” Choosan explained. “Triple-net means the tenant pays all operating costs including utilities. At first glance, it seems like the landlord has no incentive. But look closer.”
She pulled up utility data. “Typical industrial tenant in this space uses about 1.5 million kWh annually at average commercial rates of 7.8 cents per kWh in DFW. That’s $117,000 per year. Our system produces 1.8 million kWh.”
Revenue Model Options:
“Option A: Landlord retains ownership, sells power to tenant at 6.5 cents per kWh—16.7% discount from grid rates.”
“Not great,” Gio observed.
“Right, but watch Option B: Tenant purchases system, landlord facilitates and benefits from increased property value.”
“The tenant’s annual electricity bill drops from $117,000 to basically zero—they’re generating all their power. Simple payback for the tenant: 10.3 years. But add in the depreciation benefits and it’s really 7.8 years. Over 25 years, they save approximately $2.4 million in present value.”
“For the landlord,” Choosan continued, “the property now has a major value-add feature. Industrial properties with solar systems and demonstrated lower operating costs command premium rents and sales prices. We’re looking at a minimum 8-12% increase in asset value, which on a $15 million property is $1.2 to $1.8 million in appreciation.”
“Plus,” she added, “if the tenant doesn’t want to buy it, we can structure a power purchase agreement where a third-party solar developer installs and owns the system, sells power to the tenant at a discount, and the landlord gets roof lease income—typically $15,000 to $25,000 annually with zero capital outlay.”
Wednesday Morning, 10:00 AM
Gio and Choosan sat in their small conference room, whiteboards covered in calculations, preparing their client presentations.
“So we have two clear pitches,” Gio summarized, marking up the board. “For multifamily: we’re selling ‘future-proof your asset while delivering measurable tenant value.’ Investment pays back in under 5 years, creates nearly $1 million in asset appreciation, provides a marketing differentiator, and—this is crucial—positions the property favorably as energy costs rise with all the data center load growth.”
“And for industrial,” Choosan picked up, “we’re positioning three options: landlord-owned with tenant power purchase, tenant-owned with landlord asset appreciation, or third-party PPA with landlord passive income. Every scenario delivers value.”
Gio pulled up a map of their current client properties. “Riverside Commons is 220 units in San Antonio. Perfect multifamily candidate. And the Martinez distribution portfolio—three properties in the Austin-San Antonio corridor, all perfect industrial candidates.”
“I’ll prep the full financial models with sensitivity analysis,” Choosan said. “Vary electricity rates up 15% over ten years, show how the value proposition strengthens. Include tenant retention data from other solar-equipped properties. And build in the competitive angle—as data centers eat up land and power, properties with self-generation become increasingly valuable.”
“I’ll draft the pitch decks,” Gio added, “and schedule the meetings. We lead with the data center land price context—they’re all seeing it, all worried about what it means for operating costs and property values. Then we position solar as the strategic hedge: lock in energy costs, add asset value, attract and retain tenants.”
They both paused, looking at the models one more time.
“This actually works,” Choosan said quietly.
“Yeah,” Gio agreed. “This really works. It’s not just green washing—the numbers legitimately pencil out. Especially in Texas with the sun hours, the electricity rates, and the incentives all lining up.”
“We should probably talk to some solar installers this week,” Choosan suggested. “Get firm quotes on real properties so when we walk into Riverside Commons next week, we can say ‘here’s your actual system cost, your actual production estimates, your actual returns.’”
“Already on it,” Gio said, pulling up her calendar. “I’ve got calls scheduled with three installers Thursday and Friday. By Monday, we’ll have real bids.”
She stood up, gathering her notes. “You know what’s wild? We started this because I accidentally opened an email I meant to dismiss. Now we might actually have something that changes how our clients think about their properties in a market being reshaped by data center exuberance.”
Choosan smiled. “Sometimes the best ideas come from accidents. Now let’s make sure the execution is anything but accidental.”
They spent the rest of the morning refining projections, rehearsing presentations, and preparing for what might become their biggest strategic pitch of the year—turning a threat (rising energy costs and land values from data center proliferation) into an opportunity through solar investment that delivered returns financial, environmental, and strategic.
The numbers were solid. The timing was right. And in a Texas market being transformed by AI infrastructure, properties that could generate their own power were about to become significantly more valuable.
NOTE-1: Land Price Trends
Data centers are driving dramatic land price increases in suburban and rural areas, with land near renewable corridors selling for five to ten times agricultural value and average U.S. data center land prices for larger parcels increasing 23% from 2023 to 2024 . In Texas specifically, land that once sold for agricultural use at forty thousand dollars per acre can suddenly command three hundred thousand dollars or more if it’s data center ready .
The impact is particularly pronounced in Texas markets where mega projects are concentrating:
NOTE-2: The Financial Models
The calculations above use current market data:
IMPORTANT DISCLAIMER: This content is provided for general educational and informational purposes only and should not be construed as financial, insurance, legal, or investment advice. References to specific products, services, or individuals are for illustrative purposes only and do not constitute endorsement or recommendation. Readers should consult with licensed professionals in the appropriate fields before making decisions regarding insurance coverage, investments, taxes or related matters. Individual results will vary based on asset type, characteristics, market conditions, and personal financial situations.