I'm assisting an investor who wants to put solar panels on all of her rental properties and her own home. Right now, she's at four single families total, but she plans to acquire more.
We are currently discussing strategies. I am thinking that instead of paying full cost for parts and instillation on each home, she buy a bulk of panels wholesale and pay to have them installed as she buys (this also helps her take full advantage of the tax credit).
Does anyone have any experience buying/installing/using solar panels for their properties? Anything you wish you knew before you did it?
@Shannon McKenna I looked into this a little bit a few years back, but the costs were too prohibitive. Now that panel costs have come down and tax incentives have increased, there may be serious opportunity here.
I'd be very interested in hearing what you learn, particularly since we're in the same town!
Hi @Shannon McKenna I'm in the solar industry and would be open to sharing any knowledge I can that might help. My plan is also to build a portfolio of smart homes for rent that will include solar. There are ways to take advantage of the tax credits without having to buy in bulk and there are most certainly considerations that need to be made when it comes to their installation.
Feel free to message me and I'll give you and/or the investor my mobile #. Not sure if we have a solution that will meet the needs specified but I'll be able at least to provide some worthwhile information. Just about every home and location has differences so I'd need some basic information on the properties and current electrical usage to start.
@Mitch Messer Absolutely! I will send you the write up that I sent my lovely mentor, and keep you posted as we review different options.
@Andrew Smith You offer to help is so appreciated!
I'm not sure how the solar market is out your way, but I spent a good 4 months calling around and trying to get quotes from contractors who were solar certified to install a system for me. My plan was to purchase the system myself from a wholesale solar company and have them put the panels up, permits and all. What I came to find is that every single contractor either doesn't want to do it, or wants to charge you more for the install than you can get from a typical solar company for both parts AND labor. Ridiculous. I even found a guy on BP that said he would install it for me, got plans ready, nearly ordered the system and he backed out saying he wasn't interested in the job anymore.
It's not cheap to get someone to design the system, pull permits and install. What I found was that if you negotiate with the big companies, they will often drop their price very low. For example, I was having a huge system installed on one of my rentals because the college kids run up the bill in the summer to $1,000 per month and about $350 in the normal useage months. I could purchase the system online for about $15,000 shipped. The quotes I was getting for the installation with me providing materials was $40K or more (yes, I had more than 3 quotes). I ended up getting a slightly larger system installed for $28,300 all in and didn't have to lift a finger to handle it. Their original quote was closer to $40k (I think $38k if I remember correctly). Shop their price, have the big companies compete and keep going until they give up. That's when you come back and take the deal : ) I now have solar on 75% of my rentals and it saves me A TON.
I forgot to mention the financing side of it: I was originally going to pay cash for the system and the install, but they found a local credit union that financed it for me 100% at 5.5% for 20 years. I'm paying $198 per month so now my total bill goes to about $250 all in saving at least $100 in the off-months and well over $400 per month in the hot months. It's a no-brainer...
@P.J. Bremner Yeah, I had a similar experience trying to get a hold of a couple of quotes. It seems like most contractors in Georgia are interested in doing commercial or large land only installations. However, after many calls, I have found two companies in Georgia that will do it.
I initially thought buying the panels in bulk and then having them installed would be the way to go as well. However, when I look at the numbers, it seems that there is not much mark up on the product, the companies make their money in the installation.
$40k IS STEEP. Was this quote for one property or multiple? The first quote we received for single family residential was $11k before the tax credit. It's great to know that comparison shopping is a negotiation tactic that worked for you.
We planned on paying cash as well to be free and clear, but I like the idea of financing and having the renters foot the bill. I'll bring that up with my mentor and see what she thinks!
The $40k was for one property as I already have solar on the other ones that needed it. I don't know construction costs out your way, but $11k seems decent if they are handling the permits, drawings and installation.
As for the financing side, I would check with local banks to see if they will lend on the project. It's a pretty safe loan to make because the cost of the system is nearly always covered by the energy savings, if not more (assuming the proper math was done during the design phase).
I was initially going to use this company for the bulk purchase of the systems: https://www.wholesalesolar.com/solar-panels
It makes no financial scenes to install solar as opposed to buying properties with separately metered utilities. If tenants are paying utilities, as they all should, solar is a total waste of money. Invest in separately meter income properties rather than a band aid solar solution.
Additionally roofs need to be replaced fairly regularly, every 15-20 years, making roof installed solar a bad investment unless you have a steel roof.
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This is VERY location specific. My systems were $60k-$70k each for my home and office, but it ended up being reduced by 75% due to federal credits, state credits, and the tax deductibility of the systems. My $65k system ended up being maybe $16k. I did pay up front and will receive the savings as a reduction in my income tax liability.
@P.J. Bremner Thanks for the help. I think for the first property, since it is her primary residence, she's just going to pay cash outright, but for the other properties we have a couple of great banks that love our business, so it will be a great option!
@Thomas S. Utility bills are already covered by the tenants. My investor bought extremely well, and there are no wounds in the financials of the properties, ergo, solar is not a "band-aid" solution.
The motivation for solar is a personal project bringing aid and awareness to sustainable living practices. Of course, we are exploring all options to discover how to go about this in a financially advantageous way, however, we believe that there are some business practices that have bigger purposes than just making money.
@Chase Gochnauer 75% wow! That's amazing. Man, Iowa knows what's up! In Georgia, there are not state tax credits. However, we do plan to take full advantage of the federal credit.
@P.J. Bremner thanks for your information, after reading it, I am getting ready to do something on my rentals
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