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? Yes, utility costs are very important when considering installation, but they aren’t all that matters — there are other key details that you should look into prior to making a decision. Aside from the initial cost, you also have to think of location and property values. Another thing you have to consider is whether you want a single rooftop or a community solar system. One very important thing you need to remember: calculate the math ahead of time. Ask yourself how long it will take to recover the cost of your investment.
Cost of Solar
Truth be told, a solar system will most certainly cost you a lot of money. However, spending a lot of money now could lead to great benefits later on, especially when you structure the initial cost of installation wisely. 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. Additionally, in some states, you can qualify for tax deductions that can help cover the cost of installation. Despite that, it’s still wise to factor in the costs of your cash flows.
Location
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. Furthermore, if your rental house is shaded by trees most of the day, 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 definitely do that for you. Also, among other things that need to be considered, your property’s location adds value to it. Solar panels are simply in higher demand in some places, in which case your property values – and your property’s appeal – may increase. Be that as it may, higher property values may result in higher property taxes. Thus, take note of this and factor this into any decision that you might make.
Time to Recoup Costs
Typically, it takes a rooftop solar system about six to eight years to get back the cost of installation. This is inclusive of what you can save on your electricity bill. 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, it could take more than ten years before you start to see 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 select a community solar program they want to join. Community solar offers rental property owners a chance to reduce utility bills while also contributing to clean energy initiatives in their area. Additionally, panels or other equipment on the property are already pre-installed, making the cost of investment lower. Community solar, however, isn’t found in all areas. That’s the downside to it. When you do find one, best to immediately check availability.
No rental properties are exactly alike, so the decision to install solar panels on your rental is dependent on you and what you want. That’s why, 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 Dade could do for you as a property manager! Contact us online or call at 305-501-1511 for more information.
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