Solar on a Rental Property: Is It Really a Good Investment?

Living in Las Vegas, solar sounds like it should make perfect sense. We have plenty of sunshine and some very expensive summer electric bills. But when it comes to a rental property, I look at solar very differently.

The biggest issue for me is simple. Who is actually getting the financial benefit?

In most rental properties, the resident pays the electric bill. So if solar lowers that bill, the resident gets the savings. Meanwhile, the owner paid for the system and is responsible for the property it is attached to.

Yes, solar can be a marketing point to a resident who is pinching pennies and wants a low electric bill. That resident will love the idea of solar, especially during a Las Vegas summer. But I have not seen solar consistently generate enough additional rent to make the investment worthwhile for the owner.

There is also the long-term responsibility. Solar adds another system to the property. Equipment can fail, inverters can need replacement, and roof repairs can become more complicated when panels are involved (let’s not forget the pigeon nest problem that happens sometimes).

That is why I do not believe solar is a good investment for most traditional rental properties.

If I am going to spend thousands of dollars improving a rental, I want that money working for the owner. I want it to increase rent, reduce expenses, protect the property, or create a clear return on investment.

With solar, the resident receives the biggest monthly benefit while the owner carries the cost and responsibility.



If it were my rental property, I would put that investment somewhere else.

-Jenni McKenna | Owner/Broker of McKenna Property Management | B.29819