Tenants happy to pay a premium for rental properties with solar energy
A majority of tenants in Australia are willing to pay a premium for rental properties with solar energy to reduce power bills, a new survey shows.
Two-thirds of renters would pay at least $5 more per week for a solar-equipped property, while 55 per cent are willing to pay at least $10 more, according to the Origin Energy study.
Homes with solar energy systems are becoming the new normal, says Origin’s Lyn Bowring. The general manager of solar, storage and energy solutions claims Australia is close to a tipping point, where tenants will expect to find smart energy systems in rental properties.
Break-even point for rental properties with solar energy
Solar and battery storage systems like Tesla Powerwall can reduce electricity bills by up to $2,500 a year, says Bowring.
Landlords may therefore find themselves left behind if they fail to install a solar power system in their property. They may even have to reduce the rent to attract tenants.
Because solar uptake is surging across Australia, it’s easy to forget that renters have so far largely been unable to access solar energy.
Around 3.5 million solar panels were installed across Australia in 2017, according to the Clean Energy Regulator. This increased installed renewable energy capacity by 41 per cent compared to 2016.
However, the outlook for renters is changing , the site points out. This is because the cost of solar panels and home battery storage is falling and renters are keen to slash their power bills.
Like home owners, landlords would be expected to recoup upfront costs within 10 years. Beyond this time however, extra rent would be money in their pockets.
Tax deductible solar energy bonus for landlords
Landlords would subsequently end up with a more valuable property. The survey shows two-thirds of people would pay at least $5,000 more for a house with solar energy. More than half would even pay $10,000 more.
Depreciation is also a big bonus for landlords. Because the purchase of a new solar power system is tax deductible, investors can claim back the annual decline in value.
The Australian Taxation Office measures the effective life of a solar energy system as 20 years. As a result, investors can claim a 10 per cent decline in value every year using the diminishing value method.