Many homeowners have been investing in solar panels for good reasons. Solar energy is an efficient way to reduce your electric bill and carbon footprint. However, other homeowners rarely install solar panels on the roof of their investment property.
Additionally, some investment property owners might not be aware of solar systems' benefits to their rental properties. Then again, it makes sense because the renters pay electricity bills, not the landlords.
This doesn't make it any better, but as an investment property owner, there are benefits that you can also receive by investing in solar panels, and we'll list 5 of the most important ones:
One of the most important reasons you should install solar panels in your rental properties is that they help reduce your carbon footprint. If you ever wanted to help the environment, this is your time to shine! Producing electricity requires fossil fuel consumption, and as a result, greenhouse gases get added to the atmosphere.
Suppose you want to know more about carbon emission reductions. In that case, the Environmental Protection Agency offers a formula that you can use to calculate how different green practices lead to carbon emissions reductions.
If your rental properties have access to efficient power options such as solar, you're helping to reduce your carbon footprint. It feels good knowing you have done your part for the environment, right?
Reducing carbon footprint is not appealing only to the landlord but also tenants as well. By installing solar panels to your rental property, you're also increasing its chances of attracting potential renters. And obviously, getting a low monthly electricity bill definitely sets your property apart from the competitors.
Similarly, if you already have tenants in your rental property, adding solar panels will most likely make them extend their stay due to the benefits of solar energy. Not only that, but this will also help increase your earnings by reducing the costs of high renter turnover and vacancies.
As a rental property homeowner, you want your property to stand out from the competition and increase its value. Opting for solar panels can benefit you in the short term, making your property extremely attractive to potential buyers. Additionally, this also makes your home more marketable and allows you to set a higher price as well.
Going solar equals tax incentives. Initially, the federal government provides a 26% investment tax credit that you can subtract after your tax declaration. The good thing is that you can enjoy this benefit whether you've bought your solar system in cash or using a loan.
Not to mention that the average cost to install solar panels is around $25,000 and $30,000. For example, if your installation costs around $15,000, the tax incentives can save you up to $3,900 on taxes. There are also solar rebates which also help save you money. One example is the New York State Rebates Program, which refunds you around $1,750 for every kilowatt-hour. In the end, you will save a lot on upfront costs, plus avoid property and sales taxes.
If you install a high-quality solar system, you can get a warranty of up to 25 years. That said, adding solar panel to your investment property helps you claim a yearly 10% decline. For example, if you invested $8,000 in a new solar system, you can claim $800 in the first year, and in ten years, the deductions would round up to more than $6,000.