Solar panels can be a good means for property owners to save on electricity bills. But are solar panels right for single-family rental properties? While utility costs are a substantial detail and part of answering this question, there are some elements to think about before going ahead with the installation. The initial cost is a big factor, certainly, but so are things such as location and property values. You will also have to pick between a single rooftop or a community solar system. In the long run, keep in mind to do the math. How much longer will it take to recoup the cost of your investment?
Cost of Solar
There is no denying that some solar systems will cost a significant amount of money. Nevertheless, paying that money could result in a lot of great benefits, later on, depending on how you structure the initial cost of installation. Although solar panels and the other required components have come down in price over the years, installing an entirely new rooftop solar system will still run into the thousands.
Numerous solar companies offer financing or payment plans, enabling property owners to cut the cost of the installation over several months or even years. And, in countless states, you can be eligible for various tax deductions that will help defray the cost of installation. Moreover, the costs may be factored into your cash flows before moving forward.
While solar panels will actually work almost everywhere, it is still correct that solar power makes a great deal more sense in a lot of places than others. By way of example, sunny southern states will enable greater efficiency and higher production rates for solar energy, but in locations with more cloudy days, that rate will likely be reduced. And also, if your rental house is shaded by nearby trees most of the day, that will interfere in the solar system’s ability to generate high levels of electricity.
Effect on Property Values
Putting solar panels on your rental property will more than likely affect your property values. Just how much of an impact, however, is dependent on a lot of things, especially the location of your property. Solar panels are just in greater demand in certain areas, in which event your property values – and your property’s appeal – may increase. Although, higher property values may result in higher property taxes, so it’s essential to account for that probability 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. Even so, that duration of time will differ exceedingly based on your property’s location, how much sun your solar panels have daily, and so on. For homes in cloudy areas or with shaded roofs, it might take more than ten years before you begin perceiving any measurable return on your investment.
Solar System Options
If the idea of a rooftop solar system isn’t appealing, there are other options accessible for you. In many parts, property owners can select to take part 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. Besides, there’s no need for you to install panels or other equipment on the property, which means the cost of investment is significantly lower. The greatest downside is that community solar may not be within reach in all locations, so it’s good to be certain and check availability.
No two rental properties are similar, and so in the end, the choice to install solar panels on your rental (or not) is one that you will need to make for yourself. Nevertheless, with the correct information and a solid understanding of your options, you can make that decision with confidence.
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