Solar panels: valuable

These days we inspect plenty of properties with retro-fitted solar panels and inverter controls. Since the introduction of government initiatives, (both State Government means-tested and Federal incentives), we’ve witnessed a strong uptake in solar energy adoption.

Just over two million households, or 21 per cent of Australian households have solar panels.

While most solar panel systems don’t enable a household to be completely non-reliant on the grid, the combination of feed-in tariffs and battery storage are enabling us to get closer to a zero electricity cost model.

A prospect asked me the other day about the mainstream buyer appeal for this home in Melbourne’s north. It has, (by any person’s description), some prominent solar panels. It could be argued that the aesthetic appeal of the property is somewhat compromised, but the question remains;

Is the obvious appearance of the solar panels a positive or a negative?

Buyers do place an inherent value on solar panels, there is no doubt. Some buyers specifically seek out homes with panels already installed, while others aspire to an energy-efficient home and plan/provision for the installation of panels.

Being environmentally conscious is likely the dominant driver, but the cost-savings over time can’t be sneezed at.

“Solar panels are currently at an all-time low price, which means there’s no better time to transition to solar than right now. This increased affordability means you may even be able to opt for a better quality system, leading to more savings on your electricity bill. How solar panels save energy depends somewhat on the solar system you choose. 

The upfront cost of a 5 kWh solar panel system sits around $5,000 for 20 panels. You can purchase a battery and store power for later as well, but this can cost $5,000 – $10,000 extra depending on the model you choose.”
– electricityandgas.com.au

It is broadly accepted that it takes a household roughly five years to recoup the initial installation cost of the panels. This will vary based on the incentives available to a household, the feed-in tariff rates, (Victoria has a minimum tariff rate, unlike some other states), and the location of the house and position of the panels.

So will a buyer pay more for a house with solar panels?

In most cases, yes.

” A government study into ACT house prices found an energy rating improvement of one star increases market value by 3 per cent on average.”

– Energy Matters

This is also an exciting concept for investors to consider if they’d like to make a further difference to the planet, look after their tenants and potentially value-add to their property. Not only will a tenant be more likely to shortlist a property with solar, but they’ll be more likely to stay longer and possibly pay the appropriate rental premium for the upgrade.

The expense is considered a capital item and can be depreciated, hence claimed as a tax deduction on the property.

Food for thought….

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#catesundayblog comes a little later this week… we had a wonderful time celebrating last night and again today with our bride. Amy married Kristian yesterday in South Yarra and their wedding was divine. Photos to come.