Solar Panels for Renters: How it Works
Solar power seems available to anyone who wants it, but is there a way for renters to install solar panels and enjoy the benefits of green energy and reduced costs?
Several options are available for renters to enjoy solar power by installing panels. They can be a part of a community solar project, use portable solar panels, or ask their landlords to install solar panels. The cost for these options varies depending on the size of the system.
This article looks at how solar panel installation for renters works and who pays for them. Also, it looks at solar rebates for installations and how feed-in tariffs work for renters, among other important details.
Can you get solar panels while renting a house?
Getting solar panels is possible while renting a house, but you must discuss the installation with your landlord. Not every property owner is comfortable with these installations, usually due to how it affects or damages the property. It is different if the house already has solar panels; you do not have to discuss it with the landlord except for how using the system will work.
However, there are several ways to get solar power on your rented property, whether or not you directly install solar panels.
1. Discuss with your landlord
Speaking with your landlord about getting solar panels on your rented property is one way to harness the benefits of solar power. It may look like an impossible option, especially if you do not have a cordial relationship with your landlord or lease on a short-term basis. It also may not be feasible if your landlord is not readily available.
But if you have direct access to your landlord and have a good relationship with them, consider discussing a solar power installation on the property. You increase your chances of getting approved if you lease the property on a long-term basis.
It helps if you already have beneficial information on what the landlord stands to gain from the transaction and how you will financially contribute to the installation.
If you can explain to your landlord how the solar feed-in tariff can reduce the cost of running electricity, it may help to convince them to install a system. Also, agree to a small rent increment if your landlord agrees to a solar system installation. That is if they bear the cost of the entire project.
2. Join a solar community project
A solar community project or solar garden is another way to access solar power as a renter. A solar garden or project is a number of solar panels centrally located and connected to the main grid. It is usually a collective effort, and each renter pays a specific amount to buy a plot within the garden. Then, they can enjoy the benefits, financial and otherwise, from the generated energy from their plot.
A vital factor to note is that you will not always receive direct solar energy to your house as a renter if you are part of a solar garden. Instead, you contribute to solar energy generation for the main grid. However, you will receive credits for your contributions that may help reduce your electricity bills.
3. Use a portable solar panel system
Portable solar panels are an excellent option for renters if none of the above works. It also applies if purchasing and installing a large system is cost-intensive. These panels allow for enough energy generation that can carry a few essentials in a home and can be moved from one location to another.
That is why campers and travelers find them useful. However, although these can fit on your balcony or another part of your rented property without causing an obstruction, you may still want to check with your landlord for permissions and regulations regarding usage on the property.
Who pays for the solar panels?
Your landlord can pay for the solar panels, especially if they already cover part or all of your utilities as part of the agreement. That is why it is necessary to present a viable avenue from which they can earn and cover the expenses of purchasing and installing the panels.
Consider offering to purchase the solar system instead of putting the burden of purchase on the landlord. It may make your landlord more willing to let you install it on their property.
However, you must consider whether or not you want to take the system with you when you leave or sell it to your landlord. You must discuss this aspect with your landlord before purchasing the system.
Would my rent increase?
That depends on the agreement between you and your landlord. Some landlords may slightly increase your rent to offset the upfront cost of the purchase and installation, while others may ask you to contribute to the project's entire cost.
A rent increase may be cost-effective in the long run because you can use the savings from your electricity bills to offset the addition to your rent. However, if that is the case, you must discuss the percentage of the entire cost you are paying for so that you can effectively calculate when you cover your end.
How would the feed-in tariff work for renters?
If you rent a property and the electricity bills come in your name, you are liable to benefit from feed-in tariffs. That means you receive credit for the excess energy you contribute to the grid. The amount you receive depends on the electricity provider, but it is usually a few cents for each kilowatt hour produced.
A renter can get a discount on their electricity bills or credits for energy fed into the grid. However, they must ensure the electricity bills come in their name, making them eligible to receive electricity credits as if they own the property.
Is there a solar rebate for renters or landlords?
There is a solar rebate of about $2,225 for every property owner who installs solar systems on their property, provided they live on said property. In other words, you become eligible for the rebate if you own a property and live on it.
Now, there are incentives for landlords and renters. The same amount now applies to property owners renting out their property. Also, they are eligible for interest-free loans to purchase solar power systems. However, the difference lies in the beneficiary. For properties occupied by the owners, the solar system savings go to the owners, while in rented properties, the savings go to the renters.
So, where is the benefit for landlords? The property becomes more attractive to renters and buyers and adds more value to it on the market. Besides, a solar power system installed on your property is an excellent tax-deductible venture.
Solar rebates for landlords/renters by state
Landlord solar rebate in Victoria
Over 500 homes already benefit from the Solar Homes programs, and more are on the way. Landlords who have installed solar photovoltaic systems on their properties are eligible to apply for a rebate and a loan equivalent to $1,850. This amount lowers the upfront cost of a solar system by a significant amount.
Landlord solar rebate in New South Wales
The government of NSW stipulates that landlords become eligible for a solar rebate if their property has a solar power system and it is installed only by a licensed installer. However, if you are eligible as a landlord, you can get a solar rebate of up to 30% of the overall cost of the solar panels and can save more than $5,000.
Solar rebate for renters in Queensland
A solar for rentals trial ran a couple of years ago in Queensland as a way to encourage renters and landlords to team up and install solar power systems. This trial applied only to landlords and renters in Gladstone, Bundaberg, and Townsville, and about 1000 landlords were involved in it.
Rebates of up to $3,500 were offered to landlords, although this number changed with the size of the system. However, if a landlord and renters teamed up to install a system, they can agree to share the rebates and savings as they come.
Assistance for renters and landlords in ACT
ACT, or Australia Capital Territory, had a rental assistance scheme that ran for a while, where it offered financial assistance of up to $1,000 to eligible occupants or tenants with difficulty paying occupancy or tenancy fees.
These were grants, so beneficiaries did not have to pay them back. However, the allocated funds have been used up, and there is no current assistance running in the ACT.
Is solar on a rental property tax deductible?
Solar systems are typically classified as plant and equipment items under Division 40. Consequently, they are depreciable so that you can claim a deduction from your property depreciation tax. You must determine whether or not you qualify for this claim from the appropriate authorities.