Installing solar panels is a significant financial commitment, but one that can be rewarding long term thanks to solar feed-in tariffs and decreased reliance on grid electricity. However, these benefits are usually only passed onto the resident of the property who uses the electricity.
So how then, can landlords make a return on their solar panels if they don’t live at their property? And, is it worth installing solar on a rental property?
In this guide, Canstar Blue looks at what you should consider before installing solar panels on a rental property. From arrangements with tenants, maintenance required and whether or not there are rebates available to landlords.
On this page:
- Can you put solar panels on a rental property?
- What are the benefits of putting solar panels on my investment property?
- Solar panels on a rental property – landlord responsibilities
- Can a tenant install solar panels on a rental property?
- Will I receive a solar feed-in tariff for my investment property?
- Can I get a solar rebate on my rental property?
- Should I put solar panels on my rental property?
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Can you put solar panels on a rental property?
There are no rules currently to say you cannot install solar panels on a rental property. However, your ability to do so will vary depending on whether you are the tenant or the owner of the rental property. If you are renting a property, you may be limited in your access to rooftop solar panel installations, depending on the relationship and tenancy agreement you have with your landlord.
If you own the rental property however, there is nothing preventing you from adding solar panels to your investment. Whether or not you deem it to be a good financial decision though, will be based entirely on your individual circumstances. That’s why it’s best to conduct some research into the potential benefits of solar before making a decision.
What are the benefits of putting solar panels on my investment property?
There are a number of benefits that may come from installing solar panels on a rental property. Some of these include:
- Increase in property value: If you eventually decide to sell your investment property, you may find its value will increase due to the addition of solar panels. However, this will also depend on factors such as property location and buyer interests.
- Property more appealing to renters: Installing solar panels may help to make the dwelling more attractive to renters as they’ll be able to benefit from solar energy during their tenancy. Some renters may even be willing to pay slightly more rent, to help cover the upfront costs of a solar system.
Solar panels on a rental property – landlord responsibilities
As a landlord, you hold a certain level of responsibility for the changes and ongoing maintenance of the house you are leasing. If you decide to install solar panels on your rental property, you’ll also become responsible for the maintenance and servicing of the PV system.
Some of the responsibilities and costs involved with solar include:
- System installation costs (if it is a new system being installed).
- System maintenance costs (including cleaning and servicing).
These responsibilities could be divided between yourself and your tenant as part of the rental agreement. As the landlord, it’s likely that you will have to take responsibility for the majority of system costs. To avoid disputes, any duties required of your tenant should be detailed in the tenancy agreement.
Can a tenant install solar panels on a rental property?
As the property owner, whether or not you allow your renter to install solar panels is up to you. If you allow them to install a solar system, be sure to arrange a written agreement with them first, in order to best decipher what this means for the ownership of the system, once the tenant moves out (e.g. will the tenant remove the system when they move?).
If you are not comfortable with letting your renter install their own solar panels, you may suggest that they look into a portable solar system or sign up to a community solar garden.
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Will I receive a solar feed-in tariff for my investment property?
Solar feed-in tariffs (FiTs) are rates that electricity retailers credit homeowners on their bills for exporting leftover power back into the grid. Typically, a power bill is in the name of the tenant residing at the property, as they are the one consuming energy. If this is the case, you as the landlord will not have direct access to the solar feed-in tariff.
However, owners may wish to make an arrangement with the tenant(s) regarding any credits earned. Below are some potential agreements landlords could make with their tenants. Keep in mind this is a general guide only and it’s best to contact a financial advisor or tax accountant who can best assess your needs.
- Place the electricity account in the tenant’s name, they pay for power usage and receive the credits from the FiT for exporting any unused solar energy.
- Put the landlord’s name on the electricity account, who pays for power usage on behalf of the tenant and then asks the tenant to pay back the full amount, minus any credits earned. In this scenario, landlords can see what was earned from the FiT but doesn’t benefit from any credits.
- Place the electricity account in the landlord’s name, who pays for energy usage on the renter’s behalf and then asks the tenant to pay back the full amount, including what the credits have subsidised. In this scenario, the landlord can absorb the credit for their own use.
- The electricity account is placed in the landlord’s name, who pays for energy usage on the tenant’s behalf, absorbs the credits earned and then includes the electricity costs as part of the rent.
All of the arrangements above should be discussed prior to leasing in order to avoid confusion over the rental agreement. Remember, it’s always best to get in touch with a tax or financial professional to find the best solution for your circumstances.
Solar plans and prices
Below you’ll find a selection of solar deals that are available in New South Wales, Victoria, Queensland and South Australia. These are solar-specific plans that generally offer a higher feed-in tariff than those offered on standard power plans. Just make sure that a high FiT isn’t concealing inflated usage and supply rates though.
Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Ausgrid network in Sydney but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.
Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Citipower network in Melbourne but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.
Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Energex network in Brisbane but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.
Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on SA Power network in Adelaide but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.
Can I get a solar rebate on my rental property?
Yes, you may be eligible for a rebate when installing solar panels on your rental property. The availability of these rebates however, will depend on your location. For more information on solar rebates across Australia, consult Canstar Blue’s solar panel rebate guide.
Should I put solar panels on my rental property?
Installing solar panels on a rental property will depend on your individual circumstances. While there are great long-term benefits involved with solar power, this undertaking can be a large financial commitment that requires some homework. That’s why it’s important to do your research and gather quotes where possible before making a purchase decision.
If you decide that solar is the right move for your rental property, be sure to check out our report below to see which installers Aussies think are the best in business.
Original reporting by Kelseigh Wrigley
Image Source: charnsitr/Shutterstock
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