Originally posted by @Greg H.:
Originally posted by @Logan Boesch:
@Ernest Plasencia I posted this in another thread but here would be our recommendation.
We've installed a ton of these on short and long term rentals. If you plan on doing this on a long term rental I would recommend coming up with a fixed cost for what you want to charge the tenant for electricity and bill it as a separate line item to not price yourself out of the market. (A side note: one thing a lot of landlords don't think about is how hard it can be for a tenant to swallow a $300+ electric bill in the heat of summer when the AC Doesn't turn off. Flattening that out to a fixed payment has gotten great feedback from tenants.) Then you can either transfer the remaining utility bill over to the new tenants so they pay any overage above the fixed cost (easiest) or charge the tenant an overage to compensate for any difference (makes more money but a little more work).
Let me know if you have any other questions or concerns.
Logan Boesch
Freedom Solar Energy
Since you have done this several times, what is the upfront cost for you to do so? Personally, I have never seen a scenario where it works out
I posted this one another thread. If you finance it there is no upfront cost at all.
Here'san example of an Airbnb we just did in Florida with the no money down method:
Upfront cost: $0
Current Avg. Variable electric bill: $245
New FIXED electric payment: $175
Monthly savings: $ 70
Annual increase to NOI: $840
Return on investment: Infinity
Payback Period: None
I love this because It is like the BRRR investing strategy where you do not have any money in the deal and you just get cash flow.
Now here is what it would have looked like if we did that deal for cash:
Upfront cost: $25,750
Tax credit: -$ 6,695
Net cost: =$18,025
Current avg variable electric bill: $245
New electric Bill with solar payment: $12
Monthly savings: $233
Annual increase to NOI: $2,796
Return on investment: 15.5%
Payback Period: 6.5 years
A couple of final notes and factors to consider:
1. If your area is a good area for solar. Personally I’ve done systems all over the country and it’s just a fact that some are much better than others.
2. If your utility provider is solar friendly
3. None of these numbers include rate hikes by the utility company which have been anywhere from 3%-11% per year over the last 10 years depending on your area. At a minimum the rate of inflation in the US for the last 10 years has been about 2%!
4. What rate you are currently paying for electricity
5. What incentives your state has
6. All systems that we (I cannot speak for all other providers) install come with a 25-year warranty on the inverters and panels so as far as maintenance you will be covered for 25 years.
7. Someone above mentioned degradation, yes, the panels do have a slight degradation factor of around 0.5% per year making them still work above 85% efficiency even after the 25-year warranty
