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 vital attribute of answering this question, there are quite a few things to really consider before going ahead with the installation. The initial cost is a big factor, obviously, but so are things such as location and property values. You will further have to carefully choose a single rooftop or a community solar system. In the end, bear in mind to do the math. How fast will it take to recoup the cost of your investment?
Cost of Solar
Undeniably, there is no getting around the fact that solar systems will cost a significant amount of money. But it’s also true that shelling out that money could bring about numerous great benefits over time, depending on how you structure the initial cost of installation. Even while solar panels and the other required components have declined in price in the past years, installing an entirely new rooftop solar system will actually still run into the thousands.
A lot of solar companies offer financing or payment plans, leading property owners to allow the cost of the installation for several months or even years. And, in various states, you can be considered for any tax deductions that will help defray the cost of installation. But despite that, the costs must still be factored into your cash flows before doing anything else.
While solar panels will be effective practically anywhere, it is still the truth that solar power is more reasonable in some places than others. As an example, sunny southern states will make for greater efficiency and higher production rates for solar energy, compared to areas with more cloudy days, that rate will likely be reduced. Furthermore, if your rental house is shaded by nearby trees most of the day, that surely will interfere in the solar system’s ability to generate high levels of electricity.
Effect on Property Values
Placing solar panels on your rental property will probably affect your property values. Just how much of an effect, however, is conditional on many things, namely the extent of your property. Solar panels are more and more in demand in quite a lot of locations, in which instance your property values – and your property’s appeal – may increase. Nevertheless, higher property values may result in higher property taxes, so it’s imperative to account for that potentiality in your decision-making process.
Time to Recoup Costs
Generally, 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. But as a matter of fact, that time will actually vary greatly depending on your property’s area, how much sun your solar panels retain day by day, and so on. For homes in cloudy areas or with shaded roofs, it might take more than ten years before you finally start getting back any measurable return on your investment.
Solar System Options
If the idea of a rooftop solar system isn’t appealing, there are other options within reach. In several locations, property owners can be 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. Additionally, you don’t really have to install panels or other equipment on the property, which means the cost of investment is significantly lower. The most serious downside is that community solar may not be accessible in all locations, so it’s significant to check and secure availability first.
No two rental properties are the same indeed, and so in the long run, the discretion to install solar panels on your rental (or not) is one that you will need to make for yourself. Though with comprehensive information and a solid understanding of your options, you can make that decision with confidence.
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