Many homeowners install solar panels on their primary residences to reduce electricity bills. But what about investment properties? Is installing solar panels worth it when you’re not living in the home yourself? Let’s explore the potential benefits and considerations.

Benefits of solar panels on an investment property

While you may not directly benefit from the energy savings as the property owner, installing solar panels on an investment property can be a smart move. Here’s why:

1. Increased property value:
   Homes with solar panels are in high demand. If you decide to sell your investment property in the future, having solar already installed can significantly boost its market appeal. Many buyers are drawn to the idea of a home with an existing solar system since it spares them the hassle and upfront expense of installation.
2. More appealing to renters:
   Solar panels can make your property more attractive to potential tenants. Lower electricity bills are a huge perk, especially as energy costs continue to rise. For long-term renters, the promise of reduced utility expenses can be a deciding factor.
3. Higher rental income potential:
   Tenants who recognise the value of lower energy bills may be willing to pay slightly higher rent to offset the cost of the solar system. Over time, this can help cover your installation expenses while still saving tenants money overall.

Who is responsible for the solar panels?

It’s essential to remember that as the landlord, the responsibility for installing and maintaining the solar system falls on you. Tenants are not expected to handle the upkeep of the panels. Regular maintenance and ensuring the system runs efficiently will be your duty as the property owner.

What about the solar feed-in tariff?

Solar feed-in tariffs (FITs) are payments made to solar panel owners for the excess electricity their systems generate and export to the grid. However, on an investment property, whether or not you benefit from FITs depends on who pays the electricity bills:

• When the tenant pays the electricity bills:
  If your tenants are responsible for the electricity bills, they’ll directly benefit from the lower energy costs and any feed-in tariff credits. In this scenario, you won’t have access to these financial incentives.
• When you pay the electricity bills:
  If you’ve structured the lease so that you, as the landlord, pay the electricity bills, you can benefit from both the energy savings and the feed-in tariffs. This arrangement is less common but could be worth considering for specific rental agreements.

Installing solar panels on an investment property is a long-term investment that can enhance the property’s value, make it more appealing to tenants, and potentially allow for higher rental income. For the most part, it’s usually a good idea. However, it’s important to weigh the upfront costs, ongoing maintenance responsibilities, and your specific leasing arrangement to determine if solar is the right fit for your investment strategy.

Your Solar & Electrical Experts

Established in 2020, Tropical Solar and Electrical Services is a locally owned and operated company servicing homes and businesses throughout Mackay and surrounding areas including Moranbah, Sarina, Proserpine and Rockhampton. Whether it’s power on the roof or within the property, we’ll ensure it’s running as it should. Get in touch with our electrical experts today for a free quote. We’re available 24/7 for your convenience.