Solar panels can be a very good way for property owners to save on electricity bills. But are solar panels right for single-family rental properties? While utility costs are an essential portion of answering this question, there are a few details to seriously think of before going ahead with the installation. The initial cost is a big factor, definitely, but so are things such as the location and property values. You will equally need to choose properly between a single rooftop or a community solar system. Lastly, take note and be sure to do the math. How long will it take for you to recoup the cost of your investment?
Cost of Solar
It could not be denied that there is no getting around the fact that the entire solar system will cost a significant amount of money. However, spending money on this could create quite a lot of great benefits, according to how you structure the initial cost of installation. Even when, admittedly, solar panels and the other required components have gone down in price in recent times, installing an entirely new rooftop solar system will surely still run into the thousands.
Plenty of solar companies offer financing or payment plans, assisting property owners to stretch out the cost of the installation for a few months or even years. And, in many states, you can be approved for a few other tax deductions that will help defray the cost of installation. But still, the costs have to be factored into your cash flows before you keep going.
Location
While solar panels will work well where ever they are installed, it is still an accepted fact that solar power is reasonable in some places more than others. For instance, sunny southern states will permit greater efficiency and higher production rates for solar energy, while, in comparison, in areas with more cloudy days, that rate will likely be reduced. Similarly, if your rental house is shaded by nearby trees most of the day, that certainly will interfere with the solar system’s ability to generate high levels of electricity.
Effect on Property Values
Installing solar panels on your rental property has a strong probability of affecting your property values. Just how much of an effect, however, is subject to a ton of things, for example, the site where your property is located. Solar panels are truly in great demand in many areas, at which point your property values – and your property’s appeal – may increase. But actually, higher property values may result in higher property taxes, so it’s vital to account for that likelihood in your decision-making approach.
Time to Recoup Costs
All in all, 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. Nonetheless, that time frame will fluctuate highly according to your property’s area, how much sun your solar panels receive daily, and so on. For homes in cloudy areas or with shaded roofs, it might take more than ten years before you can 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 conveniently available. In a lot of localities, property owners can opt to participate 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. On top of that, it will not be necessary to install panels or other equipment on the property, which means the cost of investment is significantly lower. The most crucial downside is that community solar may not be attainable in all places, so it’s imperative to ensure availability first.
No two rental properties are the same, and so conclusively, the final choice to install solar panels on your rental (or not) is one that you will need to make for yourself. However, with good and reliable information as well as a solid understanding of your options, you can make that decision with confidence.
If you found this article helpful, imagine what Real Property Management Champion could do for you as a Wilmington property manager! Contact us online or call at 910-782-4488 for more relevant information.
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