Do you have a Solar system on your investment Property?

[russellpeter]

Hi Guys

I have been in talks with a couple of solar companies of late about solar systems on investment properties.

and wanted your thoughts.

Do you have one installed on your investment property and if yes why?

we have picked up a number of properties over the past couple of months that have just been purchased with a system already installed and i have been working on the best way for the Investment owner to get a return on there investment

Currently the new tenants just get a cheaper power bill and the owner increases the rent a little if at all.

But currently from what I have read if you were to outlay for a system on an investment property the returns you get on your money it would be better putting it into a bank.

anyone know of a better way to get a return on this?

I have a couple of ideas that i am waiting on feedback on from experts but thought I would see whats currently happening

Thanks for any help.

 

[DistinctPM]

We manage a number of properties with solar systems installed. Generally the account sent out by the provider shows electricity consumption charges separately and then off-sets this with the power generated (rebate per kWh).

Our owners keep the account connected in their name and invoice the tenants for the consumption charge the same way they do for water consumption. This way the owner gets the benefit/income from the solar system and not the tenants.

The local electricity provider also recommended to keep the service in the original owner/installers name as once there was a name change on the account the price per kilowatt hour paid by the service provided to the owner was reduced as a lot of the additional incentives offered at the time of installation only apply to the original owner/installer.

Hope this is useful.

Cheers

 

[newbietoinvstng]

We manage a number of properties with solar systems installed. Generally the account sent out by the provider shows electricity consumption charges separately and then off-sets this with the power generated (rebate per kWh).

Our owners keep the account connected in their name and invoice the tenants for the consumption charge the same way they do for water consumption. This way the owner gets the benefit/income from the solar system and not the tenants.

The local electricity provider also recommended to keep the service in the original owner/installers name as once there was a name change on the account the price per kilowatt hour paid by the service provided to the owner was reduced as a lot of the additional incentives offered at the time of installation only apply to the original owner/installer.

Hope this is useful.

Cheers

It sounds risky. Unless the property already had the solar power system when you bought it, it's a big outlay + regular service and maintenance. The return would totally dependent on how your tenant uses it (i.e. if tenant uses an aircon all day during sun hours then you have no return). Besides, there is the risk of your tenant getting behind and leaving you with a big power bill to pay on top of rent, water, repairs and all other expenses. I believe LL insurance won't cover that bill either. On the top of all that the income produced is likely to be taxable.

IMO too many cons for such a small profit if any.

 

[DaveM]

I bought a particle accelerator and tried to create a solar system in my IP, but just ended up with a black hole. Terri Scheer did not cover singularities with an infinite mass as an insured event.

 

[jaspn]

I bought a particle accelerator and tried to create a solar system in my IP, but just ended up with a black hole. Terri Scheer did not cover singularities with an infinite mass as an insured event.

Should have spoken to Brian Cox

 

[newbietoinvstng]

I bought a particle accelerator and tried to create a solar system in my IP, but just ended up with a black hole. Terri Scheer did not cover singularities with an infinite mass as an insured event.

And now we're all doomed to be sucked into your infinite mass hole!

 

[Mr Damage]

Yes, I have five 1.5kW systems on five separate properties. The tenant gets the feed in tariff. My benefit is having the property having an extra feature, that is desirable to tenants. I have little tenant turnover, and figure that the govt has given me a couple of thousands dollars improvement for free! I depreciate the systems over 25 years. Make sure the inverter has a warranty no less than 5 years. Some of the prices I have seen advertised these days are very affordable - best trying to have a system that has the metering cost included as this saves you chasing it up.

 

[Kieran01]

Hi guys,

I work for a major solar retailer, we have been working with a Brisbane real estate agent who specialises in rentals. We have just developed an Australian first which allows owners to install solar on their IP with the same or better returns than installing on an owner occupier premises. We will start rolling this out to QLD shortly.

The simple version of the concept: Utility Meter goes in owners name and is paid by owner. Private (utility grade) meter is installed after/load side of a PV (solar) system. Meter reader reads meter and sends a prepared invoice to your PM who forwards it to tenant and payment makes it's way to owner. You have the double kicker of a Feed in Tariff paid to owner and tenant paying grid rates (or slightly discounted if you chose) for your power. Solar PV works out to around 6-8ckWh produced, you will be getting paid grid rates of 26c per kWh. The difference (profit) between what you are paying out and what you are collecting varies on the system size you chose but usually falls between $1-4 per day

Happy to chat to anyone in SEQ who would like to know more just PM me.

Regards Kieran

 

[wylie]

Private (utility grade) meter is installed after/load side of a PV (solar) system. Meter reader reads meter and sends a prepared invoice to your PM who forwards it to tenant and payment makes it's way to owner.

I'm assuming the meter reader reads the "official" meter? Are you saying there is a second meter as well. If so, why is there any need for a separate meter?

You have the double kicker of a Feed in Tariff paid to owner and tenant paying grid rates (or slightly discounted if you chose) for your power. Solar PV works out to around 6-8ckWh produced, you will be getting paid grid rates of 26c per kWh. The difference (profit) between what you are paying out and what you are collecting varies on the system size you chose but usually falls between $1-4 per day

I thought the payment to solar holders who sign up now is about 8 cents per kWh We signed up for our PPOR on a higher rate, but that all changed last year, didn't it?

 

[newbietoinvstng]

Hi guys,

I work for a major solar retailer, we have been working with a Brisbane real estate agent who specialises in rentals. We have just developed an Australian first which allows owners to install solar on their IP with the same or better returns than installing on an owner occupier premises. We will start rolling this out to QLD shortly.

The simple version of the concept: Utility Meter goes in owners name and is paid by owner. Private (utility grade) meter is installed after/load side of a PV (solar) system. Meter reader reads meter and sends a prepared invoice to your PM who forwards it to tenant and payment makes it's way to owner. You have the double kicker of a Feed in Tariff paid to owner and tenant paying grid rates (or slightly discounted if you chose) for your power. Solar PV works out to around 6-8ckWh produced, you will be getting paid grid rates of 26c per kWh. The difference (profit) between what you are paying out and what you are collecting varies on the system size you chose but usually falls between $1-4 per day

Happy to chat to anyone in SEQ who would like to know more just PM me.

Regards Kieran

It definitely sounds interesting, but I don't think it would be legal. Even if it's legal now, I question if it will be for long after it becomes popular amongst LLs.

 

[Kieran01]

Hi again,

To answer your questions;

Metering - Yes it requires a secondary meter, the meter we use is approved by the National Measurements Institute the governing body for meter approvals and this model is regularly used all utilities.

Feed in Tariff (QLD)- Yes it is currently 8c with retailers adding up to another 8c. However, when the tenant purchases the power before the grid (all daytime usage) then the rate you will receive is market rate or around 26cents

Legalities - I have ticked it off with all relevant State and Federal bodies (although this does fall under State). Their response has been more than encouraging and I don't see that changing as there is no valid reason against it.

Kieran

 

[russellpeter]

hi Guys

I have spoken to kieran and sat with him he other day to look at the numbers.

we are in the process of of working with a couple of my clients who already have solar to put this to the test and will post feedback once i see it working

couple of weeks until installed then 3 months when my owner gets his first return on the investment.

but as they already has the system in place the costs to get this running is under $1000 and will add $25+ pw to his rent. it makes the numbers look really good.

what would be the % return on a new system?

 

[Kieran01]

Thanks Russell, the new systems return varies between 9-14% depending on a few factors.

 

[russellpeter]

Thanks Russell, the new systems return varies between 9-14% depending on a few factors.

so $10K will equal $25pw ish

not bad + deprecation and the added value to the property better returns than most improvements you can do for that money on a property. will be interesting to see how it pans out.