Over the last 30 years, there has been a massive growth in residential solar installation, averaging 33 percent annually in the last decade alone. Solar is a great way to cut utility costs while adding value to your property and helping the environment.
But is installing solar panels on your rental properties a good idea? The short answer is yes, but there are several factors to consider.
The information below lays out the advantages of switching to solar on your rental units. Keep reading to find out how it can add value to your property, attract tenets, and save you money.
Offsets to Utility Bills
On average, Floridians see 237 sunny days every year. While you cannot control when the sun is shining, solar energy is a safe bet in our state. Also, innovations in solar technology make energy production more efficient, even on cloudy days.
Since most rental properties require tenants to cover utility costs, low energy usage can be a huge incentive for prospective renters. In a competitive market, it can set your property apart. The lure of low monthly utility costs makes your rental unit more attractive.
This may allow you to set your rent on the higher end of the average for your area. That translates to more money in your pocket that would otherwise go to utility costs. And, if you pay your tenant's electric bills, then solar can greatly reduce your maintenance cost bottom line.
First, if you install solar on your rental property, you will be eligible for the Residential Clean Energy Credit. This is a federal tax deduction of 30 percent of the solar panel installation cost.
There also are state tax incentives. One is that solar panels are exempt from Florida's 6 percent sales tax.
The state also has a net metering program. This allows utility customers who generate excess solar energy to sell them as Renewable Energy Credits." These are applied to their utility bills.
Florida also has an abatement program for value added by residential solar to a property. It exempts homeowners from 100 percent of property taxes associated with the increase in property value.
Finally, some solar installation companies offer special incentives for commercial and rental properties. These are often geared toward achieving certain financial objectives. Research available programs in your area to make the most of your investment.
Increase the Value of Your Property
Another good reason for installing solar panels on your rental property is that it has a good return on investment. Quality solar panels can last 25 to 30 years or more. So, you can expect to recoup much of what you put into the system, should you sell your property.
Helping the Environment
A final incentive to consider solar for your rental property is that it is good for the environment. Shifting away from energy produced by fossil fuels reduces carbon emissions. This is good for the planet and may help attract environmentally-conscious renters.
Installing Solar Panels on a Rental Property
Now that you understand the basics of installing solar panels on your rental property, you can decide if it is right for you. If you have further questions about residential solar, a reputable property management company might assist.
At Gulf Coast Property Management, we assist property owners and investors throughout Manatee and Sarasota counties by providing professional leasing and comprehensive management services. Over the last 20 years, we have developed the expertise necessary to help you maximize rental revenue.
Reach out to us today to learn more about our services.