Solar panels can be an appropriate scheme for property owners to save on electricity bills. But are solar panels right for single-family rental properties? While utility costs are a crucial element of answering this question, there are different matters to take into serious consideration before going ahead with the installation. The initial cost is a big factor, absolutely, but so are things like location and property values. You will furthermore need to make a choice between a single rooftop or a community solar system. Finally, remember to seriously do the math. How fast will it take to recoup the cost of your investment?
Cost of Solar
Unquestionably, there is no getting around the fact that every solar system will cost a significant amount of money. But the truth is, splurging that money could generate various great benefits before you know it, depending on how you structure the initial cost of installation. Despite the fact that solar panels and the other required components have lessened in price recently, installing an entirely new rooftop solar system will still run into the thousands.
Countless solar companies offer financing or payment plans, helping property owners to spread the cost of the installation over several months or even years. And, in a lot of states, you can be permitted for some other tax deductions that will help defray the cost of installation. But indeed, the costs must still be factored into your cash flows before going ahead.
Location
While solar panels will definitely work well just about everywhere, it is still absolutely true that solar power sounds more reasonable in particular places than others. As for example, sunny southern states will enable greater efficiency and higher production rates for solar energy, while in parts with more cloudy days, that rate will likely be reduced. Likewise, if your rental house is shaded by nearby trees most of the day, that will clearly interfere in the solar system’s ability to generate high levels of electricity.
Effect on Property Values
Having solar panels in your rental property will more than likely affect your property values. Just how much of an effect, however, rests on the whole bunch of stuff, particularly the place of your property. Solar panels are unmistakably in increased demand in many areas, which suggests your property values – and your property’s appeal – may increase. Even so, higher property values may result in higher property taxes, so it’s salient to account for that opportunity in your decision-making process.
Time to Recoup Costs
Usually, it takes a rooftop solar system about six to eight years to pay for the cost of installation. That includes the savings on your electricity bill. But in reality, that amount of time will vary depending on your property’s area, how much sun your solar panels obtain per day, and so on. For homes in cloudy areas or with shaded roofs, it might take more than ten years before you begin to finally see any measurable return on your investment.
Solar System Options
If the idea of a rooftop solar system isn’t appealing, there are other options easily accessible. In quite a lot of locations, property owners can decide to join 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. Likewise, you don’t have to install panels or other equipment on the property, which means the cost of investment is significantly lower. The dominating downside is that community solar may not be available in all places, so it’s critical to see to its availability beforehand.
No two rental properties are truly the same, and so when everything is said and done, the final decision to install solar panels on your rental (or not) is one that you will need to make for yourself. But fortunately, with excellent 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 Cairn could do for you as a property manager! Contact us online or call at 434-215-3028 for more worthwhile information.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
