Installing Solar Systems In Vacation Rental Properties
Is Installing Solar Systems In Vacation Rental Properties Worth It?
Residential solar systems have become increasingly popular, as they offer many benefits to property owners. But is the true cost of solar panels worth it? According to a report on Forbes, the average cost of solar panels is $16,000, ranging between $3,500 and $35,000 based on model and size. If you own vacation homes with all the features of a profitable rental property, you can be sure of attracting tenants and earning passive income every month. However, you can accumulate more profits if you keep property costs down.
Considering solar systems reduce energy costs, adding several solar panels can be ideal for cutting costs and boosting returns. But before investing in solar, you need to evaluate your options and determine if it’s worthwhile. Keep reading to understand if installing solar systems in vacation rental properties is worth it.
Solar Systems Boost Property Value
Today’s tourists are more cautious of their carbon footprint. For this reason, they are more than willing to pay high rates to leverage energy-efficient features in rental properties. This means if your rental property is powered by solar, you can charge more for rent. Charging a higher rent helps you recover the cost of buying solar system, installation, and maintenance. Your tenants also benefit from staying in a solar powered home because they don’t have to worry about paying high electricity bills. If you choose to sell your property, the solar system will increase the sale value and attract potential buyers.
Provide Tax Credit
Installing solar systems in rental homes allows you to enjoy numerous incentives, including solar investment tax credit. This means if you have a solar system, you can claim a tax credit on your IRS returns. It’s important to understand there is no specific amount set for solar tax credit offered by the federal government. Instead, it’s a percentage of the amount you invested in your photovoltaic solar systems.
So, how do you claim tax credits for residential solar systems? According to EcoWatch, there are several requirements you must meet to be eligible for solar tax credits. Some criteria for receiving tax credit on solar include having a functional solar system installed between the start of 2006 and the end of 2021 and owning the photovoltaic solar system regardless of whether you bought it with cash or loan. You should also have the solar installed in your primary or investment property.
Solar Panels Are Low Maintenance
As a landlord, your primary goal is to keep property costs low to ensure you gain high profits, and the beauty of installing solar systems in your rentals is low maintenance costs. That’s because solar systems don’t have moving parts that require repairs and replacements regularly. Note that solar systems can last for 25 years while functioning effectively. The only thing you need to replace after fifteen years is the inverter.
Installing photovoltaic solar systems in your rental property, especially vacation homes, is a smart way to increase your income. Typically, having solar panels helps reduce energy consumption, meaning you pay less for utility bills. You also get to receive tax credits and rebates from the federal government for owning solar. Not to mention, solar panels are low maintenance as they rarely breakdown.
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