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? Although utility costs are significantly important in this discussion, the installation entails other details, too. While the initial cost is a big detail to remember, don’t forget other important matters like location and property values. And, would you prefer a single rooftop? Or a community solar system? Finally, do the math. Figure out how long it will take for you to recuperate the cost of the investment.
Cost of Solar
There is no sugar coating it: solar systems will cost you a lot of money. Depending on how you structure your initial cost of installation, the result could potentially bear great benefits for you in the future. 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. Nonetheless, always factor the costs into your cash flows before committing.
Ideally, solar panels need to be installed in strategic places for them to produce good and sufficient 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. Moreover, if your rental house is almost always shaded by trees, that will interfere in the solar system’s ability to generate high levels of electricity.
Effect on Property Values
If you want to add value to your rental property, having solar panels will do that for you. However, another detail that might add to your property’s value is the location of your property. Solar panels are simply in higher demand in some places, in which case your property values – and your property’s appeal – may increase. Regardless, higher property values may result in higher property taxes; hence, proceed with great thought and care when making a 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 already covers the savings it generates on your electricity bills. Other variables to consider, though, when looking at that time frame include your property’s location, and how much sun your solar panels get every day. For homes in cloudy areas or with shaded roofs, ten years is a minimum before you can notice any measurable return on your investment.
Solar System Options
There are other options available, in case you don’t find the rooftop solar system attractive. In some places, property owners can decide to take part 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. Besides, installing panels or other equipment on the property won’t be necessary, so the cost of investment is significantly lower. Always check for the availability of community solar, because they’re not readily available in all areas. That’s the biggest downside to it.
Every rental property is different. Installing solar panels on your rental is a decision that should be made by you– making sure it aligns with the vision you have for your property. However, with the right information and a solid understanding of your options, you can make that decision with confidence.
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