Solar panels can be a great way for property owners to save on electricity bills. But are solar panels right for single-family rental properties? There are, however, other things to factor in with the installation aside from utility costs. Location, property values, initial cost — these are just a few important details that you need to take note of. Also, a decision has to be made between a single rooftop or a community solar system. Another thing, don’t overlook the math. Figure out how long it will take for you to recuperate the cost of the investment.
Cost of Solar
It’s not a surprise that these kinds of solar system panels will cost a significant amount of money. Although spending money can bear great benefits in the future, it would all depend on how you structure your initial cost of the installation. While solar panels and the other required components have gone down in price in recent years, installing an entirely new rooftop solar system will still run into the thousands.
Some solar companies offer financing or payment plans, allowing property owners to divide the cost of the installation over months or even years. Furthermore, in some states, you can qualify for tax deductions that aid in the cost of installation. However, you still need to factor the costs into your cash flows.
Technically, solar panels will work in most places, however, the placement does matter when thinking of solar power. For example, sunny southern states will allow for greater efficiency and higher production rates for solar energy, while in areas with more cloudy days, that rate will likely be reduced. Plus, if your rental house is always shaded by trees, that will interfere in the solar system’s ability to generate high levels of electricity.
Effect on Property Values
Solar panels added to your rental property will add value to your property. But, that’s not all there is to it; you also have to consider the location of your property — that is something that could add value, as well! Solar panels are simply in higher demand in some places, in which case your property values – and your property’s appeal – may increase. But, higher property values may result in higher property taxes, so that’s something you have to think about before you make any decision.
Time to Recoup Costs
Broadly speaking, it takes a rooftop solar system about six to eight years to repay the cost of installation. That includes everything that you save on your electricity bills. Don’t forget that there are other factors to take into account, for example, your property’s location or even how much sun your solar panels get every day. For homes in cloudy areas or with shaded roofs, it could take a long time before you start to see any measurable return on your investment — ten years might even be the minimum.
Solar System Options
If a rooftop solar system is not your thing, there are other options. In some places, property owners can prefer to engage in a community solar program. Community solar offers rental property owners a chance to reduce utility bills while also contributing to clean energy initiatives in their area. Furthermore, the property won’t need the installation of panels or other equipment, which makes the cost of investment lower. While community solar has its benefits, it also has a downside — it’s not available in all areas of the country. So, always check for availability.
The decision to install solar panels on your rental is ultimately up to you since rental properties vary. Don’t worry; with the right information and a solid understanding of your options, you can make that decision with confidence.
If you found this article helpful, imagine what Real Property Management Spokane County could do for you as a property manager! Contact us online or call at 509-462-1042 for more information.
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