Did you know that the rental market makes up a third of the Australian property market? Solar Analytics has recently developed a new Solar for Rentals product, making the installation of solar onto rental properties simple, fair and transparent, encouraging more property owners to invest in rooftop solar and helping more renters save money on their energy bills.
The rental market makes up 31% of the Australian property market and has been generating interest in the solar industry for some time. However, due to a lack of custom solutions for solar retailers, property owners and tenants have been excluded from enjoying the benefits of solar. Our new product arms retailers with a suite of tools to guide them through the process, allowing solar to finally penetrate the rental market.
Solar Analytics recently acquired SunTenants Pty Ltd, a Sydney-based start-up that has developed a calculator which helps property managers and tenants to negotiate the split incentive of solar by calculating a fair rental increase for the tenant. Combining this calculator with the advanced monitoring and reporting capabilities of Solar Analytics, we have created a solution which not only guarantees savings for the tenant and extra income for the property owner, but also clearly demonstrates these savings and income to the relevant parties.
How does it work?
As a first step, the Solar for Rentals calculator helps the tenant and property owner negotiate a fair rental increase (e.g. $17/week). The property owner then pays for solar to be installed on the roof and the tenant signs a new lease including the small rental increase. Immediately following installation, the solar begins generating savings for the tenant and income for the property owner. For a 5kW system, an average tenant may save $1304 a year on their energy bill and pay $884 in extra rent. This leads to an overall yearly saving of $420. The property owner may pay $5910 to install the solar but will make back $17680 in extra rent over 20 years. Solar Analytics provides a customised Dashboard, and fault notifications to keep the system working and the solar production transparent to all parties.
Features of the product
Solar for Rentals has a number of features, designed to make the process of installing solar on a rental property as simple and transparent as possible for all parties:
- Solar for Rentals solar savings calculator (www.suntenants.com). Further details can be found on the technical details page.
- Solar Analytics Dashboard access for the tenant. This provides the tenant with visibility of the solar production, their energy usage and savings in real time, allowing them to use the solar energy to power their appliances.
- Solar Analytics Dashboard access for the property owner. The owner has visibility over the solar production, allowing them to see that the solar systme is working as expected. To protect the tenant's privacy, no energy consumption data is visible to the owner.
- Performance alerts for the owner and installer.
- End of tenancy reports for the owner and property manager to demonstrate real solar savings to prospective tenants.
- Custom data export (all file formats available) generated to fulfil any reporting requirements of current Solar for Rentals schemes in Qld and Vic and any future schemes.
- Solar for Rentals document suite to make available to the property manager. Documents include a lease surrender and re-grant letter and additional terms for the new lease. Further details on the SunTenants section for property managers.
Hardware and subscription costs
The Solar for Rentals product has an annual subscription of $100, paid by the property owner. Solar for Rentals uses the standard KR-63 Solar Analytics monitoring device with 4G data, meaning no dependence on Wi-Fi at the property.
Benefits for the property owner
- Additional rental income ($14/week for 4kW system, $34/week for 10kW) – Solar ROI of approximately 13%
- Increase in value of the investment property
- Increase in attractiveness of the property for tenants, leading to satisfied tenants and increased tenancy durations
- Tax deductions for depreciation of the system – 10% of the value of the solar system every year (for up to 20 years)
- Income even when the property is empty. Solar income from export credits will continue regardless of tenancy, equivalent to the weekly rental increase calculated by the solar savings calculator
Benefits for the tenant
- Savings on energy bills – a typical household could save $1043 every year with a 4kW system.
- Increased awareness and visibility of energy usage through the Solar Analytics Dashboard
- Reduced carbon footprint
Benefits for the property manager
- Differentiated properties with sought-after features
- Greater owner retention
- Increase in letting fee based on percentage of rental increase
Benefits for the solar retailer
- New, large solar market with very few systems already installed
- Potential to develop relationships with property managers, who manage the installation and maintenance of the solar system, creating one point of contact for multiple sites
Contact Dr. Lisa Beeren (email@example.com), the Solar Analytics Program Manager, for more information or to find out how your solar retailer company can enter the rental property market.