August 6, 2020 • Commercial and residential landlord Toby Tousley tells us about making energy efficiency upgrades to his rental properties in Keene.
Toby Tousley is a landlord with commercial and residential properties in Keene. In this conversation, Toby shares how and why he’s made energy efficiency upgrades to his properties.
Can you tell me how many properties you manage in Keene and whether they're commercial or residential?
Sure. I've got 30 properties, about 150 residential units and maybe 60 commercial units.
Can you describe for me what the energy setup is for you and your tenants? So do they pay their energy bills, do you pay them, how does that work?
I pay energy bills in a lot of my buildings, so in terms of heat, I heat all but one of my buildings right now. I negotiate with suppliers for heat, for everything, commercial and residential, all except for one building. And then I take care of electricity for a fair amount.
Could you tell me more about why you have that setup or w hat's the reason for that? Because I've heard of some examples where the tenants are paying for their energy bills.
I can negotiate better prices for fuel to pass on savings to my tenants, and it’s less maintenance for me. When you have a building that has 10 units, it's expensive to set up electricity to have 10 individual electrical panels. If I pay electricity for the tenants, then I'm helping them save money ultimately, is what it is. It just seems to work. So it's not true every location. If they have a two-family, that's not as accurate.
Thanks for that. I understand that you've made some energy efficiency upgrades to some of your properties. Can you describe what you've done?
Sure. Light bulbs are the easiest thing to do. In the commercial buildings, we switched from the long fluorescent tubes to LEDs, which are reasonably affordable, too. It always comes down to expense, and if you’re not getting a return on your investment, it never makes sense. But spending money on expensive light fixtures can be cost prohibitive, but there are ways to retrofit existing lighting systems. We do that often. The cost of light fixtures in residential has come down significantly over the last eight and 10 years, and so we're replacing those with new LEDs all the time. In particular, when you’re talking a hallway where the light stays on 24/7 hours a day, it's so much cheaper and easier. The bolts last longer, that’s cheaper electricity, and it's just an easy fix. So that’s an obvious choice that anybody can do is screw an LED light bulb in.
Some of the other things we've done is efficiencies on fuel burning. One of the things they always recommend with heating appliances is to make sure they're serviced every year so that you get more efficiency, but then the next real step is getting off oil dependent dependency. We just can't flip that switch that easy, so it’s burn that as efficiently as possible. And one of the ways that I've done that is to switch to propane. We don't have natural gas in our area, but we do have propane, and it's readily available and that burns very clean compared to older technologies.
In addition to that, I did install a 140 kilovolt solar array on my building on Emerald Street where it’s 365 solar panels on the roof. That’s working out pretty good as a net metering option for solar electricity generation. It's an expense, but there's some programs to help with a deal on that, and the City of Keene has recently waived the tax requirements for any of those projects.
And to that end, I was curious to ask you if there were any programs or incentives that helped you make some of these changes. You just mentioned one, so could you tell me more about that?
The big one is the federal government, which up until this year was a 30% tax credit. It’s only as good if you can offset your taxes with it. You may not necessarily get it that year, it may take a couple years to get it, but it’s there and it’s available. However, they’re reducing that program. I think it’s a 25 percent credit now, and it eventually goes down to zero. But there's some incentives for the State of New Hampshire that come and go based on funding. I know I got a grant of $3,000. It's a lottery system and you throw your hat in the ring. I just happened to get selected, which was a huge boost.
Just follow up that, I'm just curious to hear your perspective on what you think would be helpful for landlords who are interested in making energy efficiency upgrades. What do you think works well?
You know, I think it depends on how the landlord’s set up. For instance, I've got some buildings that have a number of apartments in each, so I pay the electricity. It’s really obvious for me to do solar on those buildings. If you're set up as a landlord and you’ve got 10 individual meters where your tenants are paying that, the incentive for the landlord isn't there to do that. They would end up getting savings for their tenants. Which all sounds great, but what incentive is there for a landlord to do that if the tenant gets the free electricity, you know? So I don't know how you get around those stumbling blocks.
Right. I think that's a really big question. How can renters be able to access technologies like solar when they're not the folks responsible paying for the solar installation? But you're saying that solar would be kind of an obvious fit for the properties that you have where you’re paying for the energy. Is that right?
That's correct. For that solar field I have on Emerald Street, it's a mix of businesses and they're mostly offices, and I pay for the whole building. It was a relatively easy thing to do. I'm paying for the bill anyway, and it's just one big meter. And I can net meter through that because I can track it. As I said, if my businesses paid those bills and they had twenty or thirty meters there, it’s not as easy.
You’ve referred to this already, but can you tell me more about what you've seen can be challenges for landlords when it comes to making energy efficiency upgrades? What are some barriers to making this happen?
I think probably the biggest thing comes back to funding. If the landlord just is struggling, there's no funding for it. This can happen to the homeowner, too. if you're barely making ends meet, you don't have money to invest, you know, five or six thousand dollars in a new heating appliance. I think that's probably the biggest stumbling block is just access to liquidity.
When you're thinking about your properties and energy efficiency, can you describe your motivations or your thought process when you're deciding when to make upgrades and in what situations that makes sense for you as a landlord? I’d like to hear more about that.
I've been a business person for 40 years. So a lot of the motivation comes from the bottom line, which is tough to say when you're looking for cleaning up the world, but that's really what happens in the business mind is saving money. So long before the City had their incentive to go green, I've been on board as to having efficiency just to save money and make things work better. And so that is a lot of the motivation for me is what makes sense monetarily to keep from having to charge more money to my clients and to save my bottom line.