Solar panels for a rental

17 Replies

I'm currently considering putting on solar panels for my duplex in Cleveland Ohio for $150 a month. The solar panels would cover the cost of both units and if there is any excess energy I can sell it back to the grid, at a minimal gain. Where I think this will add value is I can increase the rent of both of my units by $100 to $150 each. I would be able to cover all utilities for both units. 

with the tax incentives and energy rebates I could potentially save an additional $3,000 a year, not to include anything I sell back to the grid.

it is also estimated that I will raise my property value by $4,000 by adding the system.

has anyone else done this with their rentals? Or had any experience?

Click on the magnifying glass in upper right. Been asked 100’s of times. 

Pretty sure you won’t qualify for any tax breaks if you’re not living there. 

You think you can charge $100-$150/mo for electricity in Cleveland? For 1/2 of a duplex? I don’t pay $100/mo for a 2500sf house with a pool and electric car in vegas. 

If you don’t buy the solar panels outright it defiantly won’t add any value to your property. If you’re making payments it will actually lower the value of the property as it will make the property harder for buyers to qualify. Click on that magnifying glass again and type in I can’t sell my property because of solar lien/loan. 

So the reason rental price was based off of other two bedroom one baths duplexes in the area that also offered utilities paid. That was where I was coming up with that number.

I would have a problem buying them out right, I just don't see the point in paying for something 100% upfront when I can get someone else to pay it off for me. As I do plan to hold on to this property for the long haul. Understanding that things could definitely change in the future.

I will definitely look at other threads on the forums to see what is being said.

Sounds good. Utilities included is a new idea to me outside of rent by the room. 

Be sure to let me know if I’m wrong about not qualifying for a tax break because it’s a rental. I’d love to be wrong btu I don’t think I am. 

Yeah I did not think about having to live in the property to get the tax benefit. I just assumed seeing how the property was being used for the solar initiative I would be automatically allowed. As I am still in the research phase I will have to find out more about that and we'll definitely let you know.

As far as the all-inclusive goes for utilities I have seen it mostly for apartments one or two bedrooms. I figured that I could apply the same concept as I have just purchased the property and will be installing energy efficient appliances and HVAC As I need to be replaced anyways.

again just being in the scheming phase I will have to let you know how it all pans out.

Yes I agree. After doing a little research you do have to reside in the residence to get any tax benefit. I find this to be counterproductive to the green initiative. I like the idea of having a greenhouse but not if it's going to bring no value.

I had a house before and it had $30,000 worth solar panels and nobody was willing pay $30,000 more for my property. It almost appeared that nobody cared that I had solar panels that came with the property. I’d be surprised if I really got more than $10k added value for the solar panels that came with the property. In all reality I’m not sure I got any more value , because the buyers just could not wrap their head around the fact that they were there and would save money. Of course if you were going to keep your property long-term this might not be a good example.

In the event that you have to sell your rental property, it can be said or argue that solar panels will lift the property value. However, there is very little research to prove this. I wouldn't want to install solar panels in my rentals for various reasons. 

1. costly

2. maintenance

All the best!

Originally posted by @Aigo Pyles :

In the event that you have to sell your rental property, it can be said or argue that solar panels will lift the property value. However, there is very little research to prove this. I wouldn't want to install solar panels in my rentals for various reasons. 

1. costly

2. maintenance

All the best!

 I do not see solar panels adding anything to the resale value....

Also it's Cleveland. Do we even get enough sun for these to work?

@Kenny Hardcastle I did some research into solar for my personal residence in CA. It didn’t make sense financially. In CA PGE is your only option for electric. During the day when you generate solar you get paid at tier 1 price. When you get home in the evening and it is dark you pay tier 3 pricing. At the end of the year you get a true up charge. Talking to people who had solar they were paying $3-4k in fees due to price spread. That was close to my annual electric bill.

For me that same capital would be better spent upgrading my current properties to raise rents or simply buying more properties. I don’t like the paid utilities price model for rentals. People tend to abuse the service using more than they would if they paid for it themselves. We are doing a duplex renovation and I spent more just to fully divide utilities.

@Kenny Hardcastle

Solar panels alone will not offset your electricity costs. Most home electricity is consumed in the evening when your panels are either not producing or producing at a degraded efficiency.

To fully offset your electricity cost you will need batteries as well. A battery system for a small family plus electric car was going to cost us between $30-40k on top of the solar panels when we considered it in 2019 (Southern California).

Even if you installed a battery system, I'd be

impressed if you had enough southerly-oriented roof space on a duplex in Ohio to cover the needs of two families. Check your region's solar irradiance rating here:

With solar plus batteries your probably looking between $45-65k to purchase the system outright depending on your roof angle, size, capacity need, etc. Electricty costs from the grid are not high enough to justify this cost over the standard 25yr solar panel life span (not sure about battery lifespan, which is likely shorter).

With solar panels alone, the amount of bill offset likely will not justify purchasing the system outright (at least not in Ohio). Even with tax incentives/credits, solar panels only make sense if you value the contribution you're making to society enough to justify the poor return on investment.

@Kenny Hardcastle

Two more points I meant to add:

-The cons for the lein/loan option on panels are well articulated in the previous comments.

-Be wary of the added property value advertised by those selling the panels to you. Consult with local RE agents for a more realistic perspective.

Krystle thank you for all the good points and information. Based off what everyone has pointed out, the ROI is not worth it.

I tried to be green to help the planet, but it just doesn't make sense to do it. 

You will not need batteries to offset your solar cost. The above information is incorrect.

Look up net metering.  We are grid tied. Our rental has 16 solar panels and the bills are negative in summer and positive in winter. We have no batteries.

We sized the system to be zero cost annually. There are plenty of threads here that explain how this works.

@Tanya F. Fair points, this definitely depends on the power company's policy on surplus generation. SDG&E would purchase surplus power at a reduced rate and credit that towards your purchase of power in the evening when prices were highest.

Prices are highest in the evening ??? Our TOU metering has highest prices from 1PM-6PM. Second highest rate is from 10AM-1PM and 6PM-9PM. Between 9PM and 10AM it's 4 cents/KWh.