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? There are, however, other things to factor in with the installation aside from utility costs. While the initial cost is a big detail to remember, don’t forget other important matters like location and property values. Another thing you have to consider is whether you want a single rooftop or a community solar system. And don’t forget to do the math. Make sure you have an approximation of how long it will take to get back the cost of your investment.
Cost of Solar
If you invest in these solar system panels, know that it will cost you lots of money. Although spending money can bear great benefits in the future, it would all depend on how you structure your initial cost of the 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. Not only that, in some states, but you can also qualify for tax deductions which can help pay for the cost of installation. However, you still need to factor the costs into your cash flows.
Although they will work in most places, solar panels need to be placed in strategic areas for efficient 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. Plus, if your rental house is always shaded by trees, that will interfere in the solar system’s ability to generate high levels of electricity.
Effect on Property Values
Installing solar panels on your rental property will affect your property values. 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. 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
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. Don’t forget that there are other factors to take into account, for example, your property’s location or 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
You can choose from other options if a rooftop solar system isn’t what you want. In some places, property owners can decide to join 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. Furthermore, the property won’t need the installation of panels or other equipment, which makes the cost of investment 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.
No rental properties are exactly alike, so the decision to install solar panels on your rental is dependent on you and what you want. Nonetheless, with the right information and a solid understanding of your options, you can make that decision with confidence.
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