Solar Panels for Rental Homes?

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Solar Panels for Rental Homes?

Phil Petite
Investor 路 Memphis, TN 路 Member since 2023 路 87 posts 路 56 votes

Hello, BP Posters! :)

Does anyone install solar panels onto their rental properties? 

My tenants pay for their own utilities, and I own homes in Memphis, TN, but I was wondering if this was a solid strategy for tax benefits and energy conservation or to see if anyone else does this for their rentals. 

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Basit SiddiqiBusiness Member
Accountant 路 New York, NY 路 Member since 2015 路 8k+ posts 路 3k+ votes
2y

I would not add solar panels to a rental property, especially if the tenant is paying for the utilities.

The value of the home will not go up in pro-ration t o the price you paid for the solar panels.

I.E. if you pay $20,000 for solar panels, the value of the home will not go up by atleast $20,000.

best of luck.

[email protected]917-280-8544
Basit Siddiqi CPA4.979 Reviews
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  • Jordan RayBusiness Member
    Real Estate Agent 路 Memphis, TN 路 Member since 2023 路 623 posts 路 322 votes
    2y
    Quote from @Phil Petite:

    Hello, BP Posters! :)

    Does anyone install solar panels onto their rental properties? 

    My tenants pay for their own utilities, and I own homes in Memphis, TN, but I was wondering if this was a solid strategy for tax benefits and energy conservation or to see if anyone else does this for their rentals. 


    I wouldn't waste my money on that personally. It would destroy my return when it wasnt necessary to do that.

    [email protected]662-642-1458
    Jordan Ray - eXp Realty5110 Reviews
    WebsiteView Page
    1Reply
  • Phil Petite
    OP
    Investor 路 Memphis, TN 路 Member since 2023 路 87 posts 路 56 votes
    2y
    Quote from @Jordan Ray:
    Quote from @Phil Petite:

    Hello, BP Posters! :)

    Does anyone install solar panels onto their rental properties? 

    My tenants pay for their own utilities, and I own homes in Memphis, TN, but I was wondering if this was a solid strategy for tax benefits and energy conservation or to see if anyone else does this for their rentals. 


    I wouldn't waste my money on that personally. It would destroy my return when it wasnt necessary to do that.


    I looked into it a bit, and it is expensive, man!!!

    I was wondering if the tax benefits outweighed the upfront cost, but it doesn't appear to be so.

    1Reply
  • Jordan RayBusiness Member
    Real Estate Agent 路 Memphis, TN 路 Member since 2023 路 623 posts 路 322 votes
    2y
    Quote from @Phil Petite:
    Quote from @Jordan Ray:
    Quote from @Phil Petite:

    Hello, BP Posters! :)

    Does anyone install solar panels onto their rental properties? 

    My tenants pay for their own utilities, and I own homes in Memphis, TN, but I was wondering if this was a solid strategy for tax benefits and energy conservation or to see if anyone else does this for their rentals. 


    I wouldn't waste my money on that personally. It would destroy my return when it wasnt necessary to do that.


    I looked into it a bit, and it is expensive, man!!!

    I was wondering if the tax benefits outweighed the upfront cost, but it doesn't appear to be so.


    I definitely would be impressed if you got solar panels though! haha 馃槀

    [email protected]662-642-1458
    Jordan Ray - eXp Realty5110 Reviews
    WebsiteView Page
    1Reply
  • Phil Petite
    OP
    Investor 路 Memphis, TN 路 Member since 2023 路 87 posts 路 56 votes
    2y
    Quote from @Jordan Ray:
    Quote from @Phil Petite:
    Quote from @Jordan Ray:
    Quote from @Phil Petite:

    Hello, BP Posters! :)

    Does anyone install solar panels onto their rental properties? 

    My tenants pay for their own utilities, and I own homes in Memphis, TN, but I was wondering if this was a solid strategy for tax benefits and energy conservation or to see if anyone else does this for their rentals. 


    I wouldn't waste my money on that personally. It would destroy my return when it wasnt necessary to do that.


    I looked into it a bit, and it is expensive, man!!!

    I was wondering if the tax benefits outweighed the upfront cost, but it doesn't appear to be so.


    I definitely would be impressed if you got solar panels though! haha 馃槀


    Hahaha! I'll let you know if I do! 

    1Reply
  • Basit SiddiqiBusiness Member
    Accountant 路 New York, NY 路 Member since 2015 路 8k+ posts 路 3k+ votes
    2y

    I would not add solar panels to a rental property, especially if the tenant is paying for the utilities.

    The value of the home will not go up in pro-ration t o the price you paid for the solar panels.

    I.E. if you pay $20,000 for solar panels, the value of the home will not go up by atleast $20,000.

    best of luck.

    [email protected]917-280-8544
    Basit Siddiqi CPA4.979 Reviews
    View Page
    2Reply
  • Phil Petite
    OP
    Investor 路 Memphis, TN 路 Member since 2023 路 87 posts 路 56 votes
    2y
    Quote from @Basit Siddiqi:

    I would not add solar panels to a rental property, especially if the tenant is paying for the utilities.

    The value of the home will not go up in pro-ration t o the price you paid for the solar panels.

    I.E. if you pay $20,000 for solar panels, the value of the home will not go up by atleast $20,000.

    best of luck.


    Yes, I totally agree, Basit! Thank you for the post!

    After doing some quick research, I realized that this was the case :)
    1Reply
  • Steve Mol
    Member since 2024 路 2 posts 路 2 votes
    2y



    There is an economic case for dong solar on rentals.

    If you make the investment and install solar onto your rental(s), you would need to enter into a "Purchase Power Agreement" (PPA) with your tenants; But only if your state allows it. You can charge up to but not more than what the local power company rate is in your area. In theory, solar power is cheaper that what the local utility charges so you could generate an (small) income off of your solar investment. If you charge some percentage lower than the local power company, your tenants will get a break and be happier. Of course the propertry value should increase in value at some percentage, maybe not 100% but some. Also there are tax credits available which I think are @ 30%, look at the commercial solar incentive for rentals. 

    1Reply
  • Steve Mol
    Member since 2024 路 2 posts 路 2 votes
    2y

    Spelling Correction: "There Is an economic case for "doing" solar on rentals.

    1Reply
  • Phil Petite
    OP
    Investor 路 Memphis, TN 路 Member since 2023 路 87 posts 路 56 votes
    2y
    Quote from @Steve Mol:



    There is an economic case for dong solar on rentals.

    If you make the investment and install solar onto your rental(s), you would need to enter into a "Purchase Power Agreement" (PPA) with your tenants; But only if your state allows it. You can charge up to but not more than what the local power company rate is in your area. In theory, solar power is cheaper that what the local utility charges so you could generate an (small) income off of your solar investment. If you charge some percentage lower than the local power company, your tenants will get a break and be happier. Of course the propertry value should increase in value at some percentage, maybe not 100% but some. Also there are tax credits available which I think are @ 30%, look at the commercial solar incentive for rentals. 


    Great idea and great info, thanks very much for this post, Steve! :)

    0Reply
  • Charles Fayal
    Member since 2021 路 3 posts 路 1 vote
    2y

    The main cost of solar pannels now is install. So if you can figure out how to reduce costs there with your own labor or something similar the case for solar panels gets much better.

    1Reply
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