Solar and the Split Incentive Problem

My friend is a renter in Los Angeles. As I drive to their house, I pass house after house with solar panels, but my friend’s roof is bare.

This is true for most rental properties in Southern California and stems from what we call the split incentive problem. Normally renters pay the utility bills, but don’t have the right, or the longevity to install solar. The rental owners don’t want to install solar, as they don’t get any direct benefit for their tens of thousands of dollars in investment.

This means rental owners miss out on tens of thousands in property improvements while renters miss out on cheaper utility bills.

This is the problem we set out to address at Renual. Using our system, the property owner gets free upgrades, the renter gets a discount on their utility bills, and the new additions are financed. A true win-win-win for all involved!