Do you have a rental property? If so, you’ve probably been wondering if solar panels are worth the investment. The short answer is yes! Installing a solar PV system is worth the investment as they boost property value, reduces energy bills, and puts you ahead of other rental properties.
Solar panels are now becoming a necessity for many homeowners, especially since electricity rates have increased. Your investment property will stand out from the crowd, putting you in a better financial position than other rental properties.
You can win financially when you put panels on your property. You can claim tax deductions on the purchase of solar power – as it is a capital expenditure and can be claimed over many years. The landlord can also claim the RECs for exporting power back to the grid to help pay off the system. These RECs will see a reduction in the cost of the system that is applied at the point of sale by your installer.
How does solar power on rental property work?
Electricity bills change when using rooftop PV systems, with electricity being charged, renewable energy exported back to the grid, and feed-in tariff credit paid back to the party with their name on the bill. This can make things a little bit complicated, and both the landlord and the tenant will need to reach a mutual agreement.
Three scenarios can take place:
- The tenant’s name is on the electricity bill, and they pay it as per usual, receiving the credit.
- The owner can keep the bill in their name, pay it and receive the credit, then pass the charges to the tenant. The owner can either take the savings off the amount owed by the resident, take off part of the savings, or keep the savings to themselves (to pay off the installation of the system).
- The property owner keeps the bill in their name, pays the total amount, keeps the rebate, and then adds the cost of electricity to the rent owed each week.
If the owner elects to keep the bill in their name, they cannot charge the tenant any more than the amount charged by the provider. They have no obligation to pass savings onto the resident.
What is Solar PV Rebate
A solar PV rebate can reduce the installation cost of a solar power system. If you want to go solar, make sure to do thorough research on available rebate programs through your state government to see if you qualify. In addition to a possible rebate, the Australian Federal government provides an incentive to install solar via the Small-scale Renewable Energy Scheme (SRES). This scheme will see your solar PV system allocated a specific number of Small-scale Technology Certificates (STCs). These STCs each have a monetary value. The total value of the STCs allocated to your system will be deducted from the cost of the solar PV system you install.
These rebates can reduce installation costs, making them an affordable and an excellent option for landlords and homeowners.
How to apply for a solar PV rebate
To apply for a solar rebate, first, you must find out if you’re eligible. You will need to meet specific income requirements and have a decent credit score. If you meet these requirements, you can then move forward with the application process.
You will have to provide basic information about yourself and your property. Proof of purchase for your solar panel system must also be included in the application. The rebate processing time may take up to four to six weeks. However, the amount of time for you to receive the rebate may depend on the state you live in.
You can finally offset the costs of your solar power system once your solar PV rebate is ready. If you want to learn more about solar PV rebates, you can reach out to your state’s solar PV program administrator or read through our handy guide here.
Can tenants install panels on their rental property?
In most cases, this is not a financially viable option. When you move out, the solar system will still belong to the owner, and you’ll likely be out of pocket. However, that doesn’t mean you’re out of options when it comes to accessing renewable energy.
There is always the opportunity to come to an arrangement with the owner. A new system will be an investment, allow them to charge more rent, and it will pay itself off in time.
For those that live in units or townhouses, shop around. Many new complexes are being constructed with panels included, with the benefits passed onto the tenants. Many public housing complexes include solar as well, in exchange for a slight rent increase.
3 Solar Panel Installation Benefits for Your Investment Property
If you’re searching for ways to make your investment property more profitable, then consider installing solar panels. Having a solar panel system will provide you with benefits, including a reduction in energy costs and a boost in property value. Read on to find out more:
Increased Property Value
Installing solar panels on rental property can increase its property value. Solar panels are an attractive amenity for homebuyers. It has been reported that having a solar power system can increase your home’s value up to $15,000. A solar panel system is indeed appealing to potential renters or buyers. It can give you a decent return on investment if you decide to sell.
Decreased Energy Costs
With solar panels, you can produce your own electricity, thus saving you a lot of money on the power bill. Furthermore, you can sell any excess electricity to the energy retailer, further reducing the cost of your electricity bill.
Positive Impact on the Environment
Solar energy is a renewable source, and when you invest in it to power your property, you’re helping the environment by decreasing your carbon footprint. Solar energy can also offset other environmental impacts like air pollution and water consumption.
If you have any further questions, contact your residential tenancy authority in your state or territory to ask about your options.
Call us today on 1800 EMATTERS and get a quick quote. You can also email our friendly team for expert, obligation-free advice.
Our professional solar installers in Melbourne will assess and determine your energy needs. We customise a solar panel system in Melbourne to fit the roof size of your property, ensuring you receive the most suitable solar panel system for your Melbourne home, meeting to property’s energy requirements.
