Installing a solar system on a rental property can provide several advantages for property owners. For example, solar PV systems can raise a property's value, while rental buildings can benefit from solar feed-in tariffs by lowering their renters' electricity costs.
Real estate owners should consider the long-term benefits that a solar system might offer, such as rising property values and tenant attraction.
It is crucial to engage with a qualified local supplier or installer to discover the best renewable energy equipment, including solar panels and batteries, and to guarantee the system is of good quality.
Should I install solar on my investment property?
I am sure every property owner can agree that making money back on our property or making a higher profit on an investment property is one of the goals. Solar systems can help with this mission. Solar systems can benefit you in many ways, whether by increasing your home’s value or allowing you to access the solar feed-in tariff on an investment property. The below information outlines how property owners can gain long-term returns from installing a solar system on their investment property.
Increasing your property value
When selling a property, most owners scramble to clean the house or make minor adjustments to make the property seem more appealing to try and squeeze every last dollar out of its value.
Instead of this last-minute rush, installing solar on your investment property is a much better idea. With over 3 million properties already having solar panels in Australia, more and more people realise the many benefits they provide – especially regarding saving money.
A recent survey revealed two-thirds of people looking for a property prefer the property to have a quality solar system already. This means if you do not have a solar system, you reduce the appeal of your property.
Momentum Energy estimates a property’s value increases by about $6,000 per kilowatt of a solar energy system. Therefore, if you have a 6kW solar system, your return on your property could increase by over $30,000.
This amount can even increase further with the addition of a solar battery. So, if you are interested in your long-term returns increasing through your property value and do not have a solar system already, maybe look into it.
Install solar on your investment property and receive the solar feed-in tariff
Solar feed-in tariffs are payments made by your electricity retailer for the excess electricity your solar system generates, which is fed back into the grid. If you have an investment property you rent out, your tenants usually have the electricity account in their name.
This would mean you, the owner, do not get access to the tariff. However, you will make your home much more appealing to tenants and potentially contact a little more rent because you have a decent-sized solar system.
Anyone with an investment property knows that when tenants move out, that’s when one needs to invest in the premises via minor repairs, a repaint, or an upgrade. So it is in the landlord’s interest to have long-term tenants – who stay for 3, 5, or even 10 years.
If a solar system and lower tenant electricity bills can achieve this, everyone wins. But remember this golden rule – only quality solar will stand the test of time. Cheap solar systems do not benefit the environment and also have a lot of issues after only a few years.