Solar Panel Use for Tax Advantages/Cash Flow on Rentals

[Jonah Kolsrud]

Hey BP members, I was doing some research on tax advantages to switching solar in South Carolina for rental properties. From what I can see there is both a state tax credit (25% of the total system cost up to $35,000) and federal tax credit (30% with no cap), but am curious what other investors experience has been with having these installed on rental properties. It seems like it could be a viable strategy on to increase cashflow by having renters pay you vs. your local energy provider (i.e. you charge a flat rate per month to renters that covers your financing cost on the panels + a set amount for you to pocket).

Thanks in advance for everyone's thoughts/experiences! Happy Thanksgiving!

[Brian Mason]

I plan on utilizing this strategy on my rentals however I may be biased as I own a sales company that generates leads and appointments for solar companies. Not all roofs and utility companies are created equal and you'll definitely want to to check with the HOA to see if they allow. Look in the neighborhood too and see if other homes have solar. The current tax credits for 2020 are 26% for federal (22% if installed in 2021) and 25% for SC meaning about half system cost paid for by government through dollar for dollar tax credits. PM me, I'd be happy to do a quick analysis of the property for solar and give some indication whether or it's worth pursuing a quote.