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. 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 more thing; do the math ahead of time. And lastly, a good thought to ponder on would be the amount of time it would take to get back the cost of your investment.
Cost of Solar
It’s not a surprise that these kinds of solar system panels will cost a significant amount of money. Even though spending might seem tight at first, if you structure your initial cost of installation wisely, great benefits will follow. 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. But, don’t overlook factoring in your costs into your cash flows before you make any decision.
Location
It makes sense to place solar panels in designated spots and not in random corners of the property so that they can produce solar power effectively. 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
Solar panels added to your rental property will definitely add value to your property. 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
Most of the time, it takes a rooftop solar system about six to eight years to reclaim the cost of installation. This is inclusive of what you can save on your electricity bill. 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
But, if what you’re looking for isn’t a rooftop solar system, you can always opt for other choices. In some places, property owners can make the decision 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. 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. Armed 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 Longhorn could do for you as a property manager! Contact us online or call at 512-580-3099 for more information.
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