Making up a third of the nation’s population, renters are becoming frustrated with the lack of properties embracing rooftop solar systems.
In a new survey conducted by Origin Energy, over two thirds of renters would be willing to pay $5 more per week for a solar property while over half would be willing to pay up to $10 more.Put into perspective, that can amount to over $500 more in rental payments for the homeowner.
Renters are willing to adhere to these added costs as the current state of rising energy bills could have tenants paying thousands of dollars just towards electricity on an annual basis.
According to Origin Energy General Manager of solar, storage and energy solutions, Lyn Bowring the general consensus shows tenants will expect to rent a home in the near future with has solar panels.
In reference to the chart below, Ms Bowring explains this is an untapped market for energy suppliers and consumers, as rental properties have been assessed to have the ability to contribute almost $4 billion to the residential solar market.
Rental properties have the least amount of solar installations in comparison to the other residential markets stated but the greatest amount of possible solar investments across the nation.
Your property value could depreciate without solar
At the current time, homes with solar energy installed stand out in the housing market, but due to the huge uptake of national rooftop solar it may soon become the norm.
As you may have already read in previous blogs ‘10 reasons why solar is the solution for you’ or ‘The future of Australia’s solar industry is looking bright,’solar energy has been taken the Australian energy market by storm. Recording over 3.5 million national solar installations last year, solar experts believe investments in sustainable energy will keep growing in retaliation to rising energy bills.
Energy Matters Wilf Johnston believes that at some point we will reach a tipping point, where tenants will eventually expect solar to be a typical property addition.
Mr Johnston said it may only take a couple of years until it becomes unusual to walk into a rental home without an installed solar system.
He said property owners could risk the possibility of their homes depreciating in value as an underperforming asset, and as a result, have to drop their rental prices to attract more interest.
What’s holding landlords back from solar investments?
Like most things, cost is the prime reason as to why we all refrain from making investments that put us out of our comfort zones. While this is completely understandable, the same questions always arise when looking into solar. Will I get what I pay for? What if it doesn’t work properly? How long will it take until I start making a profit? So, let’s shed some light on these questions.
According to the survey almost three quarters of the individuals who took part expressed the cost was the leading factor restricting them from investing.
With most properties you can expect to have your system repaid in as little as 4 years or in a maximum of 10. In terms of a rental property receiving an added return of up to $10 a week and taking into account rental increases in the market, your system could be paid off even quicker.
After your system has been paid off, all of the added rent you gain will be sheer profit and remain as a highly sought after property due to its energy efficiency.
Not only will it add to rental benefits, but when it comes time to sell up you will expect huge market price increases. Over two thirds of the surveyed participants revealed they would pay $5,000 more for a house with solar energy than a property that is just on the grid, while over half exclaimed they would be willing to pay around $10,000 for a solar home. If you were to have state of the art solar systems installed on your property, you can expect to ask even more than previously stated.
With some property value increasing up to $30,000 by having an effective solar systems, investing in solar not only helps you save but immediately adds value to your home. Source: solarpowerrocks.com.
Claim your tax back with solar energy
If you are one of the few Australians who have invested in a rental property, you will know all the added benefits of tax deduction.
In terms of solar, as it has an effective life element you are able to claim the value your solar energy as an asset through depreciation.
Utilising the diminishing value method, (an asset’s value should decrease in the early years of its effective life) property owners can claim an annual 10 per cent value decline.
As the Australian Taxation Office has deemed the effective life of a solar system to be 20 years, (although leading solar companies offer system warranties of up to 25 years) you can claim back almost two thirds of the price of a solar system if you were to pay it off over the general maximum length of 10 years.
If you have been looking into turning a higher profit on your investment property, the Energy division at AICA can provide the perfect solar system to add value to your home.
As a leading renewable energy provider in Australia, AICA offer 25 years on your rooftop solar as our devoted team of engineers will perfectly tailor a system to suit your energy needs.
To discover more about how solar can benefit your future, contact our friendly team on 1800 242 228.