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Benefits of Solar Panels for Rental Properties

December 20, 2023 | Reading Time: 7 minutes

There are many benefits of adding solar panels to your rental properties. If you want to increase the profitability of your investment property or cut your utility expenses, solar may be the answer.

Many investors are choosing to install solar panels due to the ample amount of solar incentives accessible in Massachusetts and Rhode Island. These incentives decrease the initial cost of the solar energy system and kickstart a lifetime of savings with zero-dollar electric bills.

Benefits of Solar Panels for Rental Properties

Adding solar to your rental property is like having a new tenant sign a 25-year lease and paying you every month to live on your roof.

Between federal rebates and state solar incentives, landlords are benefiting from reduced upfront costs when switching to solar. They’re able to save money each month and increases the value of their property. 

Pass On Excess Energy Production To Other Properties Including Your Personal Home

Rental property owners can take advantage of the property’s solar panels as any excess energy production can be sent to another home in the same grid.* This applies to your personal home or business. Landlords can double up on the savings from one solar panel installation, maximizing the value of the initial investment.

Justify Charging More For Monthly Rent

If electricity costs are completely eliminated from rental agreements,  you can choose to roll that expense into rent. Instead of your tenants setting up an account with their local provider and paying another bill each month, they pay a higher rent which covers the cost of the loan on the solar panels. This fixed increase in rent will endup being less than they would have paid in varied electricity bills from month to month. You’ll be saving your renters money and giving them peace of mind during periods of high electric rates.

Increase The Value Of Your Property

Solar panels save you money the day they start producing and once they are paid off, you’ll benefit from essentially free electricity. This increases the value of your property by removing an expense for future owners. On average, homes with solar panels have sold for 9% higher than their asking price, according to Zillow. A system that is completely paid off will increase your cash flow by the thousands.

Decrease Your Property’s Carbon Footprint

Solar panels are one of the most effective was to substantially reduce your carbon footprint. While most green practices require a change in your current lifestyle, solar panels allow homeowners to live a more sustainable life without any change in their day to day routines. With solar panels, a home is cutting its reliance on fossil fuels and powering their home with clean energy from the sun. This switch to renewable energy also comes with federal and state solar incentives that offset the total cost of the solar installation. 

Drawbacks Of Solar Panels For Rental Properties

There are some potential hold-ups for installing solar on your rental property.

Upfront Cost

Pricing of solar installations vary but are a significant financial investment. Depending on your chosen solar plan, you may be required to pay a percentage up front or decide to make monthly payments for a longer period of time. Regardless, your system will be an added expense of owning and operating your rental property.

Meeting Structural Requirements

Many rental properties are older homes which may not meet the structural requirements needed for solar. It is typically recommeded that solar not be installed on roofs greater than ten years old. If the roof is not up to solar standards, it will need to be replaced before the installation can take place.

Electrical Upgrades

Older properties may have outdated electrical panels that don’t have the electrical capacity to support your solar system. They will need to be replaced before installation which will be an added cost to your system.

Taking the First Step

If you are curious about if solar panels make sense for your rental property give us a call at (508) 717-3820 or start your free quote

* There are local limitations that apply to transferring excess power within the same grid. In Massachusetts the two properties must be within the same geographic area. As an example, an Eversource customer living in Dartmouth cannot send power to their Eversource property in Boston. In Rhode Island, you can only send power to other meters on the same property. You cannot send to another property throughout the state unless the same name is on both bills.