Quote from @Calvin Matthews:
Hi everyone.
I'm an out of state investor with one house in New Braunfels, TX. My vague and miniscule understanding is that electricity is handled differently in Texas than other states. That being said, I've been hearing of people who use Tesla solar/power walls to generate electricity and sell excess electricity back to the grid, thereby generating a sort of passive side income. I've included an example of someone from Texas who posted on Twitter selling excess energy at $5.52 per kWh while buying at $0.11 per kWh. The only thing is these results are from personal residences, not landlords.
Has anyone looked into this for their rentals? There's a discount of $500 for a power wall delivery if buying directly from tesla (probably other stipulations too), plus there's probably federal/state incentives, and of course there's the potential to sell back electricity to the grid at really high rates. I was wanting to install solar before seeing this post just because I didn't want our tenant to be without electricity in wacky weather times. It would be great to get this done for our rental but if someone's already doing this on their rentals and have an idea of what to consider (sharing this with the tenant, with the HOA, etc.) and how to get max cash flow then that'll be great. Thanks.
Hey Calvin, this is a great question! I'll preface that I'm not local to TX, but in my area, solar can help by locking in your electric rate (similar to locking in a mortgage rate) instead of dealing with local utility rates (that on average have gone up 3.9% per year over the past 30 years).
If you get a battery, you can also ensure you or your tenants have power during a blackout (which is happening more and more in certain areas).
There are banks and credit unions offering loan terms as long as up to 25 years, and in certain markets you can enter into a "Power Purchase Agreement" where you simply buy a set amount of energy (generated by solar) at a lower rate than the utility is offering and lock it in for 25 years as well.
If you install solar on a primary or secondary home, you can get a federal income tax CREDIT (not deduction.. a dollar for dollar tax credit) equal to 30% of the cost/investment into solar. Some states like Maryland offer an extra $1000 on top of that.
8 states (including DC) currently have a Solar Renewable Energy Credit market where you can earn passive income by selling the SRECs your system generates back to the utility company to meet local regulations requiring utilities to go green. You earn 1 SREC for every 1000 kWh your system generates and there are SREC brokers to help facilitate the sale, similar to a stock broker. This is who my company generally recommends our clients use: https://www.solsystems.com/services/srecs/#srec-pricing
On top of all that, according to Zillow, homes with solar sell for 4.1% more than homes without solar. In my area, only about 2% of homes have solar. Our utility rates have gone up about 30% in the past year (affecting both homeowners and renters) so both current homeowners as well as renters are interested in locking in their utility rate to protect themselves against inflation. https://www.zillow.com/research/solar-panels-house-sell-more...
Feel free to reach out if you have any further questions about how solar can help save you money and increase the value of your home!
