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Rene Ochoa
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Solar panels rental property

Rene Ochoa
Posted Feb 1 2024, 11:10

Morning, does anybody know how the solar panels work in a rental property, or it's the same as primary residence?

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Chris Seveney
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Chris Seveney
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Replied Feb 1 2024, 11:35
Quote from @Rene Ochoa:

Morning, does anybody know how the solar panels work in a rental property, or it's the same as primary residence?

Are you referring to a single family rental? What do you mean how does it work? It works the same but that does not mean as a renter the landlord could have the property 100% powered with solar and still charge you. Need more info for what you are trying to accomplish with the question.

Long story short is solar on a house is solar on a house. Some people lease their panels others buy.  

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Rene Ochoa
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Rene Ochoa
Replied Feb 1 2024, 19:33

Hi Chris Seveney, I just built a 2 unit in san diego and I was thinking about going solar on those unit's, but I don't know how the billing process works, the tenant pays the bill, or it's better to include it in the rent

thank you 

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Kyle Deutschmann
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Kyle Deutschmann
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Replied Feb 2 2024, 06:15
Quote from @Rene Ochoa:

Morning, does anybody know how the solar panels work in a rental property, or it's the same as primary residence?

As Chris mentioned it works the same, however, the tax credits and incentives may be different for a primary home vs a rental. Is that what you’re asking? 

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Alan F.
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Alan F.
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Replied Feb 2 2024, 10:58
Quote from @Rene Ochoa:

Morning, does anybody know how the solar panels work in a rental property, or it's the same as primary residence?

California is now on NEM 3.0

https://pv-magazine-usa.com/2022/12/15/california-pulls-the-...

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Bill Brandt#3 1031 Exchanges Contributor
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Bill Brandt#3 1031 Exchanges Contributor
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Replied Feb 2 2024, 11:23

If you put solar panels on a rental in California today you’re doing it to feel good about yourself. You’re going to lose money right out the gate. (The property won’t be worth its original value plus what you spent on solar panels, it will be worth some amount less.). Also, if you list the property at the higher rate because you’re including SOME of the electric utilities (because you won’t be able to eliminate 100% of the bill.) you’re going to lose potential tenants that are filtering by rent and/or see similar properties for less, causing longer vacancies. Lastly, either you’re going to discount the electricity you generate with the panels, causing your investment to be a loss. Or you’re going to charge market rates making it worth nothing to the tenants except complications and the fear they are being ripped off. 

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Melody T.
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Melody T.
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Replied Apr 9 2024, 15:30

@Rene Ochoa I work in this space (on a larger scale). Your options on how you can structure this depends on the state and how many doors you have at the multifam. If it's a small operation (less than 50 units) than you can install solar, but it will likely need to be a cash purchase. Smaller systems are hard to find third party financing for. The solar will only be there to offset common areas, however so not sure it would make economic sense to go that route for a small utility offset. If it's over 50 units there are companies that will pay for, install, own and operate the system and will pay you a lease payment. They will then sell the power to the tenants at generally a 10% savings to the tenant. Feel free to reach out if you have additional questions. Happy to hop on a quick call and connect you to the appropriate people. I'm So Cal as well.