How solar can be beneficial for your investment.
The Benefits of solar
Landlords have the opportunity to avail tax benefits by asserting solar-related expenses as deductions for their rental properties. As rental properties generate income, these deductions become eligible.
Solar system components, encompassing batteries, are designated as assets with specific useful lifespans as determined by the Australian Taxation Office (ATO). This affords you the opportunity to account for their annual depreciation in value. Over a span of ten to twenty years, this cumulative depreciation becomes a significant financial advantage.
Solar panels add value in the form of increasing the amount of rent that can be charged as tenants will have significantly reduced electricity bills. When the time comes to sell your property, solar systems are also a great value add for potential buyers.
Why Should I add solar to my rental property?
You should add solar to your rental property to increase your investment return. Given installation costs, the financial benefits may not be obvious and people generally assume you must be living on a property to get the benefits of solar. But even as a landlord, solar systems more than make up for these costs over time.
Higher rental value
Rental properties with solar systems are a hot commodity on the rental market. A recent study showed tenants are prepared to pay higher rent for lower power bills and a reduced carbon footprint. This increase in your passive income quickly covers installation costs and provides excellent long-term financial returns.
STC Credits
A small-scale technology certificate (STC) is equal to 1 megawatt hour of renewable electricity either generated or displaced by eligible small-scale renewable energy systems such as solar PV, wind and hydro and solar water heaters and air source heat pumps.
Small-scale renewable energy system owners and registered agents have the option to sell small-scale technology certificates (STCs) through the open market for an uncapped price, or through the STC clearing house at a fixed price of $40 (ex GST). Suppliers offer discounts on the up front installation costs in return for your STC credits, meaning you get all the benefit with no extra work!
If you’d like some more information on how solar can benefit you, get in touch with us.
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