Landlords and solar - does it pay to buy solar for rent properties?
Categories: Solar Energy
In today's solar climate it is often asked if it makes sense to buy solar. Investors want to calculate the rate of return for their purchase, and homeowners want to save money. Everybody wants to do the green thing, reducing fracking, use of coal, and natural gas, and get out from under a monopoly power company, firing up some good healthy competition.
One landlord in Fort Myers Florida has found a successful model for implementing solar. Jansi suggests that she has 17 properties, and as she is able to re-negotiate leases, it's as simple as this. She buys solar for the home, and adds the payment to the rent. Since the solar payment is less than the electric bill, the renter is happy paying the solar bill!
The equity is added to the home, thereby the renter buys the system for the home, and adds to the equity. The value of equity added is based on the cost of energy in the market. So in San Diego, addinig a 10kw solar system could add $140,000 in value to the home, while the same system in Fort Myers Florida could add $40,000 in value to the home, since the cost of energy is 3x more in California. That said, both systems cost about $40,000 or less, with a $12,000 federal tax rebate. So spending $28,000 up front adds $40,000 to $140,000 in equity for the home. The landlord comes out shining like gold with an investment that is unsurpassed by any other home improvement, and it's all paid for by the renter.
There are just a few situations that make this possibility less appealing, such as solar installed on a mobile home that has too little equity to realize the gains, but even with just the energy produced, not counting the equity, an average system will pay for itself in 4-11 years depending how financed, and the cost of energy where installed!
Watch as one man figures out how the investment principle works with his installation (equity gain not considered):