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? Despite having an important role, utility costs aren’t all that you should focus on, as there are other factors involved in the installation. 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? And don’t forget to do the math. How much time is it going to take to regain the cost of your investment?
Cost of Solar
Should this be something that you consider, take note that solar system panels will cost money — lots of it! Great benefits wait for those who know how to wisely spend and structure their initial cost of 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. Also, in some states, you can qualify for tax deductions that mitigate the cost of installation. But, don’t overlook factoring in your costs into your cash flows before you make any decision.
It makes sense to place solar panels in designated spots and not in random corners of the property so that they can produce solar power effectively. 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. And, if your rental house is frequently shaded by trees, that will interfere in the solar system’s ability to generate high levels of electricity.
Effect on Property Values
Your rental property will gain some value once you install solar panels. 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. Nonetheless, higher property values may result in higher property taxes, so you need to take this into account before any decision you make.
Time to Recoup Costs
Most of the time, it takes a rooftop solar system about six to eight years to reclaim the cost of installation. That already covers the savings it generates on your electricity bills. Of course, there are also other factors to consider; for instance, your property’s location, and even how much sun your solar panels get every day. For homes in cloudy areas or with shaded roofs, ten years might not even be enough to see any measurable return on your investment.
Solar System Options
If you don’t want to go for a rooftop solar system, don’t worry, because there are other options to choose from. 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. Also, it will not be necessary to install panels or other equipment on the property so the cost of investment will be 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. Nonetheless, with the right information and a solid understanding of your options, you can make that decision with confidence.
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