There are plenty of reasons to go solar. With solar, you can drastically reduce your electricity bills, increase the value of your property, and support your local economy, all while reducing your impact on the environment. These benefits aren’t restricted to homeowners living in single-family homes or condominiums – you can enjoy all of the benefits of solar even if you own a multi-family building.
How landlords can enjoy the benefits of solar
Going solar is a smart decision for your wallet and can be a valuable asset for your tenants, too. Whether you are an onsite landlord (living on your property and renting one or more units to tenants) or an offsite landlord (renting out all of your building’s units to tenants), there’s a solar option for you.
As an onsite landlord, the first decision to make is whether you want your solar PV system to provide electricity exclusively to your unit, or whether you want to provide electricity for one (or more) of your rental units.
If you decide to install a solar energy system exclusively for your unit, you simply connect the system to your unit’s electric meter and enjoy the benefits of reducing your electricity bill and your environmental footprint. If you decide to provide solar electricity for your rental units, your solar benefits will depend on the electric metering and rental agreements for your building.
If the tenant pays their own electric bill: If the tenants living in your units pay their own electric bill each month, the addition of solar power can help them reduce costs. Since your tenants’ electricity bills will be reduced or even eliminated, a solar PV system can be a way to justify higher monthly rent.
If tenant electric bills are included in rent: If you pay your tenants’ electric bills each month and this service is included in the rent, installing solar can reduce your monthly operating costs. Solar panels produce electricity for 25+ years, so installing them can also provide a nice return on investment for your property. Even if you go solar with a lease, you will see savings from day one.
A solar-powered building is also a great marketing tool when it comes to renting out your unit: solar appeals to a growing segment of residents that care about the environment, and installing a solar energy system can help you attract tenants.
Landlords living offsite have similar options to those above where solar is powering all or some of the rental units. Solar can be a great way to attract tenants who care about the environmental or clean air benefits of solar power, and this “feature” of the unit can justify higher rents, adding to the financial benefits for the landlord.
Know your solar financing options
There are plenty of financing options available to help you go solar. Whether you decide to buy your solar PV system or lease it from a third-party owner, solar can provide significant financial benefits with no money down.
Buying a solar energy system
Purchasing a solar energy system is your best option if your primary concerns are long-term financial benefits and flexibility. However, to buy a system, you will need to make an upfront investment or get access to capital through a lender.
By purchasing a solar energy system, you gain access to state and federal tax incentives that help to reduce your upfront costs. When you own your system, you may also qualify for SRECs, an additional stream of income that can increase returns on your investment. Owning a solar system can also add to the value of your property.
If the property is owned by a corporate entity, you may also be able to recover some costs through depreciation. (Consult your tax advisor if you have any questions about how this might work.) However, some of these benefits are expiring soon – now is the best time to go solar if you want to take full advantage of incentives.
There are plenty of solar loan options available to help finance your solar PV system purchase with little to no money down, while still delivering the financial benefits associated with ownership. See how much you might save with a solar energy system for your property using the solar calculator.
Leasing a solar energy system
Leasing a solar PV system is a great low-risk opportunity to reduce your electricity costs. While the financial benefits of a solar lease might be lower than if you owned the system, solar leases have no upfront expenses and do not require you to take out a loan.
Leasing arrangements also offer energy production guarantees and maintenance services, offering peace of mind that the system will always produce energy without incurring any unexpected costs. However, systems owned by a third party are not included in property value assessments, so they have little to no impact on the value of your property.
If neither of these options is viable for you, you and/or your tenants may consider community solar power, either by finding an existing project or by working with the community to create a new community solar installation.
Further resources for solar champions
To provide detailed guidance on solar power for multi-family properties and condominiums, the Massachusetts Department of Energy Resources developed A Solar Guide for Condominium Owners and Associations in Massachusetts in 2015. While this guide is intended for Massachusetts residents, it offers useful advice for landlords and multifamily building owners across the country. If you’re a solar champion ready to start considering solar for your building, this guide will provide you with comprehensive information for every step of the process.