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? Even though utility costs are pertinent to the question, it must also be understood that there are other things to consider for the installation. While it is a significant factor, the initial cost is just one of many factors. Others include location and property values. Also, a decision has to be made between a single rooftop or a community solar system. Another thing, don’t overlook the math. 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. 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 which help settle the cost of installation. Despite that, it’s still wise to factor in the costs of your cash flows.
While solar panels will work anywhere you place them, other placements make more sense in maximizing 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
Your rental property will gain some value once you install solar panels. There are other ways, however, to add value to your property; one of which is the location. Don’t forget to consider that when making any plans. 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 it’s vital for you to take this into account before any decision you make.
Time to Recoup Costs
Usually, it takes a rooftop solar system for about six to eight years to recover the cost of installation. That includes everything that you save 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, it could take more than ten years before you start 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 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. Moreover, panels or other equipment won’t need to be installed anymore on the property, making the cost of investment significantly lower. Although, there is a downside — community solar is not offered in all areas. So, when you do find one, best to immediately check availability.
The decision to install solar panels on your rental is ultimately up to you since rental properties vary. Don’t worry; with the right information and a solid understanding of your options, you can make that decision with confidence.
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