Of course, solar for a rental property makes sense! There are a wide range of benefits to adding solar panels to any home. And that’s whether you live there or rent it out to tenants. Solar delivers a supply of clean, abundant solar energy to your rental property. It’s also a great step in lowering the carbon footprint of the property.

Regardless of what your reasons are for making the change to solar, it’s good to know that solar is an investment that could have you reaping rewards for years to come.

In this blog, we’ll cover the following benefits of adding solar to your rental property:

  • An increase in rental property value
  • Taking advantage of the solar tax credit
  • Lower utility bills for renters
  • Power outage protection

So, without further delay, let’s get into it! Here’s some information about why solar panels are an amazing addition to your rental property.

How does solar work for a rental property?

Before understanding if solar makes sense for a rental property, it makes sense for you to understand how solar works.

Solar works for a rental property much like how it does for any home. Once you’ve installed solar panels, they do the work of taking sunlight and turning it into reliable electricity.

Here are the basics:

  • Every solar panel has a network of solar cells. Photons from the sun make contact with solar cells.
  • The photons stir up the electrons inside of the solar cells. This causes the electrons to flow through an electrical current.
  • This movement generates electricity for your rental property.

If you want a more in-depth look at how solar panels work, check out our blog.

Still wondering, “Does solar for a rental property make sense?” Now that we’ve taken a look at how solar panels work, let’s check out some of the perks of adding solar.

Why adding solar to a rental property just makes sense

Whether it’s logical sense or dollars and cents, adding solar to a rental property has huge benefits for renters and homeowners alike. Let’s take a look at why adding solar for a rental property just makes sense.

solar for rental property

Do solar panels increase your rental property value?

Yes, solar panels can increase rental property value. As the owner of the rental property, we’re guessing that you’ll want to do what you can to make the best financial decision.

A rental property is intended to be a way for you to maximize profit and keep your initial investment as low as possible. That’s why you  might be interested to know that solar could increase rental property value.

The whole purpose of having a rental property is to reap the financial benefits. If there comes a time when you want to sell the property, a solar upgrade adds significant value to your investment.

Depending on the location, the amount of access to sunlight, and other factors, it’s possible for homes with solar to sell for 4.1% more than comparable homes without solar energy.

According to a study done by the Department of Energy and Berkeley Laboratory, buyers are willing to pay an extra $12,000 to $15,000 for a home with just an average sized solar array.

Moreover, if your rental property is in one of these top 10 states outlined by CNBC, you might have access to the highest solar premiums.

For more information on how adding solar can increase rental property value, check out our blog for the scoop.

solar for rental property

Using the solar credit for your rental property

Another thing you might want to consider when answering, “Does solar for a rental property make sense?” is the cost. Making the decision to install solar panels is an investment, like any other upgrade you’d make to a rental property.

It’s important to note that you won’t miss out on potential  solar savings  just because this isn’t your primary residence. Many people want to know if you can use the solar tax credit for a rental property.

According to TurboTax, you can use the federal solar tax credit if you live in the rental property for part of the year. However, you’ll have to reduce the credit to reflect the time you don’t live there.

Another option is to claim it under section 48 of the tax code. For qualifying rental properties, the business investment tax credit (ITC) can be used to offset the cost of adding solar panels.

Lower utility bills attract more renters

Does solar for a rental property make sense? It does if you consider the environmentally conscious and budget-minded interests of potential tenants.

Recently, a study conducted by the American Council for an Energy-Efficient Economy (ACEEE) found that “renters are more likely to choose energy-efficient homes when energy information labels are included in rental listings.”

Solar has the potential to lower utility bills through net metering programs and other factors, like time-of-use billing. Having an idea of what they might be paying helps potential renters decide if they want to choose a rental.

By adding solar to a rental property, you could be making your listing a smart choice for potential tenants.

solar for rental property

Power outage protection for tenants

Nothing ruins a good time like a power outage. Whether it’s a rental property or a vacation home, a power outage can really hurt your morale.

Over the past two decades, power outages in the U.S. have nearly doubled. Regardless of whether you blame our aging, greenhouse gas-emitting power infrastructure or blame extreme weather conditions brought on by pollution, the problem still exists. We go in-depth about the rise of power outages in this informative blog.

Adding solar panels to a rental property could do big things for your tenants. A solar system complete with a solar battery helps keep your rental property powered through an outage. And potential renters see the value in a property that benefits their well-being.

Does solar for a rental property make sense?

Yes, solar for a rental property makes sense! Solar offers many benefits to you, as the property owner, and your prospective tenants. It’s possible to lower the utility bills of your renters, do your part in helping the environment, and get yourself a nice monetary return on your investment with solar.

Explore all the ways solar on a rental property can be beneficial with a Solar Energy Specialist today!


ADT Solar does not provide tax advice. Be sure to speak with your tax consultant if you have questions about your personal situation.

Disclaimer: This webpage provides an overview and does not constitute professional tax advice or other professional financial guidance. It should not be used as the only source of information when making purchasing decisions, investment decisions, or tax decisions, or when executing other binding agreements.