Solar panels can be an excellent way for property owners to save on electricity bills. But are solar panels right for single-family rental properties? While utility costs are a necessary aspect of answering this question, there are certain components to look at before going ahead with the installation. The initial cost is a big factor, surely, but so are things such as location and property values. You will additionally need to choose between a single rooftop or a community solar system. In the final analysis, remember to do the math. How much time will it take to recoup the cost of your investment?
Cost of Solar
It is undeniable that there is no getting around the fact that every solar system will cost a significant amount of money. Even so, spending that money for this could lead to great benefits down the line, conditional on how you structure the initial cost of installation. Though solar panels and the other required components have gotten down in price over the past few years, installing an entirely new rooftop solar system will definitely still run into the thousands.
Various solar companies offer financing or payment plans, helping property owners to split the cost of the installation for many months or even years. And, in numerous states, you can be entitled to several tax deductions that will help defray the cost of installation. Additionally, the costs need to be factored into your cash flows before progressing.
Location
While solar panels will actually work wherever it is still a fact that solar power is more logical in some places than others. Take one example, sunny southern states will enable greater efficiency and higher production rates for solar energy, but in comparison, those areas with more cloudy days, that rate will likely be reduced. In addition, if your rental house is shaded by nearby trees most of the day, that will surely interfere in the solar system’s ability to generate high levels of electricity.
Effect on Property Values
Adding solar panels to your rental property will, in all probability, affect your property values. Just how much of an outcome, however, is determined by so many things, as an example the scope of your property. Solar panels are precisely in much higher demand in several places, at which point your property values – and your property’s appeal – may increase. Even though higher property values may result in higher property taxes, so it’s crucial to account for that contingency in your decision-making process.
Time to Recoup Costs
Normally, it takes a rooftop solar system for about six to eight years to pay for the cost of installation. That includes the savings on your electricity bill. That span of time will not be always the same depending on your property’s place, how much sun your solar panels obtain all day long, and so on. For homes in cloudy areas or with shaded roofs, it might take more than ten years before you can observe any measurable return on your investment.
Solar System Options
If the idea of a rooftop solar system isn’t appealing, there are other options at hand. In certain locations, property owners can decide to become involved 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. Moreover, it’s not necessary to install panels or other equipment on the property, which means the cost of investment is significantly lower. The utmost downside is that community solar may not be easily accessible in all parts, so it’s vital to check for availability first.
No two rental properties are the same, and so lastly, the choice to install solar panels on your rental (or not) is one that you will need to make for yourself. Moreover, with the appropriate information and a solid understanding of your options, you can make that decision with confidence.
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