The cost of solar installations is tumbling while electricity prices continue to rise. Taking action on climate change now makes financial sense and this is why nearly 1.5 million Australian households have chosen to get solar.
The landlord / tenant relationship does not prevent both parties benefiting from installing solar.
The easiest way for a landlord to go solar is via an agreed-upon increase in rent with the tenant, facilitated by an independent broker.
Landlord funds the system. This can be depreciated over time, increases the property value and gives them a return on their investment)
Tenant pays for system directly through their rent. The small rent increase is more than compensated as it will save even more on the tenant’s power bills.
Steps to calculation
Determine the average weekly benefit to the tenant from the solar system ($/week).
• Use the calculator and power bills. (Reduce by 25% to allow for error, degradation and load profiles adjustments to ensure the tenant is saving more than their rent increase.)
Determine the average weekly cost for the system.
• Capital cost divided by the number of weeks in the repayment period (7-10 years is suggested)
Do the numbers and advise
• This makes good financial sense if: Weekly benefit (reduced by 25%) > Weekly cost And makes a great contribution to action on climate change!! Everyone can be part of the solution,
Landlord tenant agreement signed
• Landlord buys the system, tenant pays more rent. Landlord maintains system performance.
• Even if the tenant moves out, the new tenant will be happy to pay the higher rent for the same reason the old tenant did – they benefit financially.
Example: A landlord installs a 3kW solar PV system
Step 1: This provides about $14.50 a week in benefit to the tenant, which if reduced by 25% is about $11/week
Step 2: The weekly cost over 10 years is about $7.50. The landlord may be paying interest on the cost of the system, so the real cost could be higher.
Step 3: Weekly benefit ($11) is greater than the weekly cost ($7.50)
Step 4: Landlord and tenant agree on a $10/week increase in rent. Both parties are financially benefiting and empowered by taking climate action. It is that easy!