Are you an Australian property owner leasing a space? Are you wondering how much it is worth to install solar panels? In one word: very. Not only are these systems claimable at EOFY, but they can reduce your costs in the long term.
The Money Aspect of Solar Panels for Renters
By installing solar panels in your rental property, you make a financially sound decision. Solar energy systems are classified as capital expenditures, and expenses incurred under this category can be used to claim tax deductions spread over several years. Besides, landlords can be eligible for rebates from electricity exports back to the grid, further reducing the initial installation costs.
How Solar Energy Works on a Rental Property
Rooftop solar power systems can export excess electricity to the grid, therefore gaining credits on electricity bills. Solar rebates are provided to the person whose name is on the electricity bill, so this can be somewhat complex in a renting arrangement. Here are three potential arrangements:
- Tenant Pays the Bill: The electric bill is put in the tenant's name, and they pay their bill just like usual, except now they will be paying the discounted amount.
- Owner Pays the Bill: The owner holds on to the bill in their name, pays the bill, and then bills the tenant for it after receiving the rebate. This option allows the owner to:
- Deduct the savings from what the tenant owes.
- Deduct a portion of the discount.
- Maintain the savings to offset the costs of installing the system.
- Owner Includes Energy Costs in Rent: Owner retains bill in owner's name, pays the bill in full, receives any rebate, then includes the cost in the weekly rent of the property.
More importantly, if the account is kept in the name of the landlord, then they cannot charge more to the tenant than what the energy supplier has billed. Tenants are under no obligation to pass on savings from the landlord.
Can Tenants Install Solar Panels
In most circumstances, installing solar panels on a rental property is not cost-effective to tenants, as the system belongs to the landlord, who will have control over it—limiting any means to recover investment costs. However, there are still some pathways through which tenants can access renewable energy:
- Negotiation with the Landlord: The tenants can make a proposal regarding the installation of solar panels in return for a slight increase in rent by the landlord. Over time, energy saving would pay off the investment incurred.
- New Developments: Most of the newly developed apartment complexes and townhouses already have solar panels on their roof, and all the said advantages apply to their tenants. For their part, public housing developments also start to install solar systems in exchange for minor rent increases.
Getting the Most out of Solar Energy for Rental Properties
Research before installing solar and obtain quotations from recognized installers. A resource like SolarQuotes can be a handy place to get independent reviews and compare recognized brands and installers in Australia.
For a tenant interested in solar energy, the tenant could always talk with their landlord about the proper arrangements that can be put in place. The Residential Tenancies Authority in your state or territory can guide you and help with the legalities of such an arrangement.
- SolarQuotes: Get a Free Solar or Battery Quote.
- Energy Made Easy: Compare energy plans to find the best deal for your situation.