All Forum Posts by: Andrew Smith

It seems to me that (IF) Solar Panels were such a big bonus, that the State of California (a sunshine state) would not have to pass a law FORCING people to install them on new construction.

It seems to me that (IF) they were such a big plus, that the ALL new builders would self install them without being FORCED to do so. Like they do with Toilets and Front Doors, etc...

No one has to pass a law requiring (FORCING) everyone to invest in real estate (because the value is there, and people know it).

Without number crunching it out, those are just my thoughts on this.

Good Luck with your decision!

Hey Scott,

Just like insulation codes, double glazing, environmental protection codes are "forced" they are for a bigger purpose. California has some of the highest goals for zero carbon footprint in the world so making solar mandatory is a way to accomplish those (though I think there are better ways).

Houses would all be a heck of a lot cheaper if there were no code requirements for anything but not sure we'd love the outcomes.

In spite of it being mandatory it is still highly attractive financially in most cases in California.

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No worries and I sent you a message @Alex Houser

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Originally posted by @Jacob D Adamczak:

@Andrew Smith I am curious to how that works. I know a lot of utilities have time of use electricity charges and its not as simple as multiplying the price per kWh by the quantity used. They would also still have a charge just to be connected to the utility even if you produced 100% of consumption with a net metering setup. With all of that complexity, how would you even know how much to charge the tenant in this scenario

You can charge them what the utility would charge per KWh. There are really inexpensive monitoring systems that will let you know how much your tenants are actually using. You can have an annual review of the monthly rate in that scenario. The other route would be to add $x to the rent and offer "free" power. You would have to stipulate that the tenant would pay any excess from the utility like the "reasonable use" clauses in mobile data usage. That way you're not on the hook if they decided to grow "herbal products" for example - they would pay the utility.

@John Berekoff - in California, unless the property is obscured by trees or the utility bill is under $100/month it truly pretty much makes no sense not to go solar. Full disclosure I am in the solar industry. The numbers are almost always favourable in CA so it would be other reasons like aesthetics or some type of prevention like shading that would make solar non-viable.

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@Charlie MacPherson

That's great info and super to see the SRECs in action! MA is indeed leading the way along with CA.

Fannie Mae explicitly allow the full value of a system to be appraised if owned (or financed) and explicitly disallow the value of a system to be appraised if leased. The other main difference is how the systems are secured. Owned or financed are typically UCC1 on the equipment only whereas leases will add a lien to the home.

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Originally posted by @Alex Houser:

Hey everyone,

Does anyone have any experience installing solar panels on a rental property to offset the cost of electricity?

I currently own a "house-hacked" duplex where my wife and I live on the first floor and the second floor is rented. The issue I'm facing at the moment is that there is no gas to the house - everything is electric, including heat and hot water. There are gas lines in the street, but obviously the cost of upgrading the home to gas is considerable (albeit probably less than installing solar.) By way of reference, I'll share that the 3 bedroom, 1 bath apartment we rent goes for about $2,000 - $2200 market rent, and the electricity bills average between $400 - $500 per month. This cost is considerable, and although my tenants pay for their own utilities, I'm wondering if there would be any benefit to installing solar.

Some questions I'm asking myself (and others) are

Is there any potential revenue creation from installing solar and have tenants pay me instead of the utility company?
Will installing solar truly offset such a significant electricity cost?
Will the ability to offset electricity costs for an all-electric home create a wider tenant pool for future rental?
Is it more financially viable to simply install gas?

Any input or experience you're willing to share would be very helpful and appreciated!

Thanks for reading,

Alex

The short and likely non-helpful answer is "it depends". Location of home, aspect of roof, size of roof, size of system etc., all factor in to whether solar will make sense or not.

Solar can indeed be extremely efficient, but may not make sense for this property. Ownership will almost always be better than leasing again depending on your goals. There are different ways to have tenants pay. New leases can contain language for a fee that you'd charge monthly and they would pay the utility remainder on top of that. Existing tenants can sign a lease addendum to do the same. They'd be interested in that if their overall monthly for power is less.

At the bill size you mention, solar will likely be a good bet depending on the other factors such as roof size and aspect. I can run numbers on your specific property if you'd like and you can see if it makes sense or not.

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Originally posted by @Jacob D Cockerell:

I'm considering installing solar panels on my personal home. According to the seller the panels immediately increase home equity to the cost of the panels and the monthly payment is equal to savings on electricity bills. Not to mention the tax credit of 25%. I was curious has anyone here installed solar panels and are they as good as investment as advertised?

The tax credit is 30% through the end of this year and will diminish from then.

The savings and value add depend on a lot of factors including where the property is located, your usage of power, size of system desired, etc. As @Jason D said, ownership - cash or financed - enables the value add, but leases do not.

If you'd like the numbers run for your property, it's what I do.

Cheers, Andy

1 Vote

Originally posted by @John Berekoff:

So I had this idea the other day and wanted to know what others thought.

If you place solar panels on a property of yours, and pay them off (or buy them outright) so that all of the energy savings coming from them are not going to making lease payments, would you be able to somehow meter the tenants and charge them the market rate for the electricity being used, keeping the difference as profit?

Keep in mind this is assuming that the panels were actually efficiently producing electricity and significantly reducing the cost of power (solar panels are not always that good at reducing costs in some situations, but for this particular theoretical lets assume they are 100% efficient).

Is anybody doing this? Is it even legal? Or is it just some silly thing I thought of while I was bored? lol

What do you guys think?

The short answer is yes you can sell power to your tenants. Most tenants are paying their own power separate to the home lease. In those scenarios you cannot force a tenant to pay for the solar system but you can ask them to sign a lease addendum. Why would they? Well if you can offer a scenario where they are saving 10-20% then it's attractive to them. You can of course put that in the lease for new tenants.
You can charge what the utility would be charging. This means you need a monitoring system which are really inexpensive. The tenant would still be connected to the utility and would then receive 2 bills. One from the utility and one from you. Again their incentive is that you are offering them a discount overall. Your incentive is that others are paying for your home improvement and value add of solar panels. You could review their usage annually to determine the monthly bill amount going forward. When the panels are paid off, that's an even higher income stream.
Another way would be to offer new tenants "free electric" with a higher lease payment. You would need to have a "reasonable use" clause so that they remain on the hook for any excess power that is purchased from the utility.

1 Vote

Originally posted by @Mark Dance:

I am listing a home that has added a expensive Solar Panel system and now the owners want to sell the home. There are no comparables in the market that have a system like this. We want to add the value of the system to the home, but I think the market may not support the price adjustment. Idea how to market the solar panel and how to adjust the value of home? They pay no power bill, but pay a payment on a contract for the solar panels.

Where is the home located?

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Originally posted by @Liz Faircloth:

Hello,

I am looking for any recommendations for Solar brokers/companies that specialize in commercial buildings. We have a 10,000 SF building with a flat roof in Trenton NJ and we are considering solar.

Any help would be super appreciated!
Thanks,

Liz

Hi Liz,

We can help you with that project in NJ - at least to get the numbers put together to see if it makes sense for you. I have reached out to connect with you and happy to get the process started.

All the Best,

Andy

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Originally posted by @Bill F.:

@Andrew Smith

Thanks for posting those links. Did we read the same article? From The Verge piece you posted:

Here is San Onofre's seismic data.

I think applying the national disgrace moniker is hyperbolic to say the least. Trail of Tears, Teapot Dome, the Japanese Internment...ect. Those are national disgraces. This is political maneuvering for power/votes getting in the way of solving a nationwide problem.

I'm by no means advocating an all nuclear solution; as I said in my post above, this is an issue that calls for many different solutions to be tried simultaneously. You have said before, the largest issue with solar is that it does no produce power 2 hours a day. Nuclear solves that problem. I don't see a reason that we can't work to solve the short comings of each generation method while pairing these two and other renewable sources of energy together in order to reduce CO2 emissions.

It seems to me that when the word "Nuclear" is mentioned, people lose sight of the real issue at hand, which is the raising of the mean temperature caused in no small part by increased CO2 levels.

I'd say it's hyperbolic until it actually happens - see caging children at borders. Pontes certainly has an opinion, as do others:

https://sanonofresafety.org/earthquake-and-tsunami-risks/

I respect the thought of the nuclear option for the 2 hour window. I haven't changed opinion that a focus on storage rather than nuclear would lead to a far less impactful solution. Storage solutions in fact already do exist - especially residential, they are just a little too expensive for most consumers right now. Even with no further tech advancement, manufacturing efficiency will bring them mainstream soon regardless. We need to advance that tech for utility scale and solve issues such as requiring cobalt mines for batteries.

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All Forum Posts by: Andrew Smith

Andrew Smith has started 1 posts and replied 169 times.

Post: are solar panels a good investment?

Post: Solar Panels to offset cost of Electric Heat?

Post: Increase ROI with Solar Power?

Post: are solar panels a good investment?

Post: Solar Panels to offset cost of Electric Heat?

Post: are solar panels a good investment?

Post: Increase ROI with Solar Power?

Post: Selling home with Solar

Post: Solar Consultants in NJ for Commercial buildings?

Post: California to make "Solar "mandatory for new Homes!!!!!!