What About Putting Solar On The Rental? Helps Everybody Out

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In Australia, it is common practise for middle-income professionals to buy rental properties and use the tax advantages generated to offset Australia’s high income tax. As a teacher, I was paying roughly 30% of my income in tax. So I bought a little house. The tax offset and the rent helped to pay the expenses, but not all of them. Buying it in the right place meant that after a time, I would make some capital gains, sell it, and then pay Capital Gains Tax — this is the Australian way.

I thought I was on a winner when I put solar panels on my roof. So, I thought, why not put panels on the rental. It was a townhouse, so it had to be approved by the body corporate. They okayed it and we went ahead. Two years later, when I sold the property, I was most disappointed that it did not enhance the price of the property. Prospective buyers said it didn’t make a difference to what they were willing to pay. 

On a larger scale, many businesses are run from rented premises. They haven’t got the right to put a structure on the roof, and the owner has no incentive. The renter gets the benefit of the low-cost solar and there is no money flowing to the owner of the premises.

A new study states: “The results reveal that putting more solar on ‘hardship homes’ — defined for this study as low-income rental properties — promises to slash annual grid-based electricity consumption by 40%, lower greenhouse gas emissions by 1.6 tCO2e per household annually, and cut energy bills by $2908 per low-income household over 15 years.”

That sounds great – but who is going to pay for it?

The report suggests a “potential ‘shared value’ model that could stimulate greater investment in PV for properties without government intervention. This model involves a third party (in this case we use a NFP) that could deploy solar PV on hardship households and divide the economic benefits between resident and the landlord (in the case of renters).”

So, we either need to create a nonprofit organisation or use an existing one (perhaps a local council) that would own the behind-the-meter systems and rent the roof space from landlords. Complicated but doable. Landlords would increase their return and tenants would get cheaper electricity during the day. 

Watch this space.

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David Waterworth

David Waterworth is a retired teacher who divides his time between looking after his grandchildren and trying to make sure they have a planet to live on. He is long on Tesla [NASDAQ:TSLA].

David Waterworth has 738 posts and counting. See all posts by David Waterworth