Have you considered installing solar panels on your rental property? Solar panels can help tremendously whether you want to save on energy costs, lower your carbon footprint, or increase the value of your property. However, they come with a hefty price tag. So, are solar panels worth it in 2024? Read along as we discuss how they work, how much they cost, and some of the pros and cons.
Contents of This Article:
Contents of This Article: - Are Solar Panels Worth It in 2024?
- How Do Solar Panels Work?
- How Much Do Solar Panels Cost
- Pros and Cons of Solar Power
- What Makes Solar Panels Worth It?
- Should You Add Solar to Your Rental?
Are Solar Panels Worth It in 2024?
As Baltimore property management professionals, we know how important it is for rental owners to increase their return on investment (ROI). But is this possible by installing solar panels?
In many cases, installing solar panels is worth it, especially if you have high or unpredictable energy bills. While they have a larger upfront cost, solar panels help decrease utility bills and increase the value of your property. In turn, you may be able to charge higher monthly rates as you provide convenience for your tenants and their utility bills.
However, investors looking into solar energy should consider several factors before making a decision. So, let’s examine how solar panels work, how much they cost, and some of the pros and cons.
How Do Solar Panels Work?
Solar panels convert sunlight into electricity using photovoltaic (PV) cells. When the sun’s rays hit the solar panel, PV cells absorb the sun’s energy. This creates electrical charges within the cells that move until they create an electrical current–what we use as electricity. This direct current (DC) is converted into alternating current (AC) by an inverter and is used to power homes.
How Much Do Solar Panels Cost?
One of the largest downsides to solar panels is their cost. On average, most solar panel systems cost between $15,000 and $20,000. However, depending on the size of your property and the installation system, it can cost upwards of $25,000 to $30,000. Keep in mind that these prices are before incentives and tax credits are applied.
If you’re considering installing solar panels for your rental property, doing your own research is crucial. Typically, you pay according to the system’s wattage, which is usually around $3 to $5 per watt. However, prices can vary depending on what type of panels you choose, as there are several options.
There are monocrystalline, polycrystalline, or thin-film panels, each ranging in price per material. Monocrystalline panels are more expensive but generally more efficient. Polycrystalline panels are less efficient but more affordable, and thin-film panels are the cheapest option, as they’re the easiest to produce.
Pros and Cons of Solar Power
When deciding whether solar panels are worth it, you should evaluate the pros and cons. For instance, while you can save money in the long run, the initial expense can be quite large. Here are some of the main benefits and drawbacks to consider.
Benefits of Solar Power
- Reduce Your Carbon Footprint- The solar energy generated by your panels helps reduce greenhouse gas emissions and reliance on fossil fuels, contributing to a healthier environment.
- Save on Energy Costs- Solar energy can lower or even eliminate electricity costs, especially if you generate excess power.
- Increase Your Property’s Value- Properties with solar panels generally sell for more and faster than those without.
Reduce Your Carbon Footprint- Drawbacks of Solar Power
- Higher Upfront Costs- Installing solar panels can be a significant investment. However, incentives and financing options can make it more feasible.
- Weather and Dependent- Solar panels are less effective on cloudy days or in regions with less sunlight.
- Requires Space- If you want to install solar panels, you’ll need a large enough roof or a large land area to place them.
What Makes Solar Panels Worth It?
If you’re seriously considering installing solar panels, several factors may determine whether it’s worth it. Here are some of the most important considerations for investors who are looking into solar energy for their rental properties.
Location
The location of your property plays a huge role in how effective your solar panels will be. For instance, if you live in a part of the country with a lot of sunlight exposure, you’ll get more out of your solar investment. However, if you live in cloudier locations, you may not get the best output from your solar panels.
Your Roof
Your RoofIf you plan on installing solar panels on your roof, you’ll want to consider its size, shape, and slope first. After all, the structure of your roof can be one of the largest roadblocks to going solar. For instance, small or steep roofs can make it harder to install solar panels, increasing the cost of labor and equipment.
Tax Incentives
Those who install solar panels can benefit from federal and state tax incentives. Just for installing solar panels, you can receive a 30% federal tax credit. Additionally, while every sate is different, homeowners who install solar panels can save even more with state incentives or rebates.
Energy Consumption
Before you consider installing solar, look at your monthly energy consumption. The average US household uses around 900 kilowatt hours (kWh) of electricity per month. Most solar panels produce around 2 kWh of electricity daily, and most homes install at least 15 panels. As such, the energy they produce should be enough to cover most, if not all, of your home’s energy consumption.
Should You Add Solar to Your Rental?
Are solar panels worth it in 2024? Ultimately, it’s a personal decision based on the nature of your property, how much you can save, and how much you can afford to invest. However, generally, they’re beneficial in terms of overall savings and property value.
If you’re looking to keep your property in top-notch shape, consider the help of property management. Comprehensive teams like Bay Property Management Group can ensure you find the best tenants for your properties and that they stay well-maintained through each tenancy. Contact us today to learn more about our services throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC.
