To Solar, or Not to Solar Your Rental Properties

Let the Sun Shine In

by Jared Lamp

Summer may be nearly over, but to some escaping the heat is a number one priority.  Doing so, however, instantly zeroes in on one ugly factor: cost.  It’s no mystery that with energy costs in a constant state of flux, it can be difficult to gauge how it may affect property costs across your portfolio.  For this reason alone, many rental owners are looking up at the source of their summer grief: the sun (of course, don’t look up at it for too long).

How Solar Works

Solar energy has exploded in popularity in recent years, and in San Diego where the sun shines without the merest gauzy cloud most days of the year, its potential benefits are vast.  For starters, we have an energy source that is endlessly renewable, as it is safe to assume the sun will not be burning out anytime soon.  Solar Photovoltaic (PV) panels absorb the sun’s rays and produce electricity without clunky machines and without ozone-damaging emissions.  What this means is you now have a way of generating power at the source, and electricity will flow more efficiently.  This can slash costs from mini-apartments to even the largest multi-family dwellings, giving you leverage over facility and tenant costs.  It also adds a positive image to any home or corporate office.  Installing solar tells potential clients that you are taking on a proactive approach to solving our energy crisis and also saving the environment for future generations.

Selling It Back to the Man

Another powerful incentive for producing electricity on site is “Net Metering,” where owners can sell their surplus power back to the electrical utility, totally offsetting their cost of buying power that the sun isn’t giving them.  The average retail price of electricity is made available through the Energy Information Administration (  To get a more approximate snapshot, you should also factor in the system’s electrical output and average daily hours of sunlight.

A Juicy Fixed Rate

The commercial installation process has also become much smoother due to advancements in solar panel design and technology, making them more cost effective.  Electric rates went up in San Diego 35% last year and another 16% so far this year alone.  With solar, the rate is locked in at the time of installation, a rate that is good for at least thirty years.  Thus, solar saves money and is good for shareholders.

We Want You (To Save Dough)

Among all potential benefits provided by solar power, other incentives are available for property owners who want to get the most out of their investment.  Look no further than Uncle Sam where you may receive up to a 30% federal tax credit in addition to state and local incentive programs.  Also, there are state rebates still available which provides a ROI of over 20% and a pay back of three to five years.

The Choice is Yours

Ultimately, only you know if an investment in the solar revolution is the right fit for you.  It doesn’t have to be a question of opting for the biggest, most sophisticated system for its own sake.  What is important is finding the system that works best for you and your operational and financial requirements.

Have you participated in the HERO program? Do you know someone who has? Share your experience or insights with the community.

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