Solar On A Rental: Have I Lost My Mind? Or Found The Key?
August 5th, 2010 categories: EnergyWise Education, Home Performance, Investors, Regulators and Regulations, SOLAR
Some of my investor friends say I’ve finally lost it, gone completely overboard with this green energy thing … and my wife thinks they may be right.
This week I installed a Photovoltaic Solar System on one of my renovation houses. The fact that it was on a rental is where my friends thought I took leave of my senses.
But I’m liking the idea more and more as the results are unfolding. It looks like the ultimate Win, Win, Win, Win, Win. You see, I had made a classic Investor mistake: I had mis-judged the neighborhood and over built for what the neighborhood would appraise for. I wanted a sale price of $160,000 for the completely renovated 1200 square footer with energy efficient everything in Fresno CA. The appraiser said $153,000, so I could absorb the $7,000 hit or change strategies and play a different game.
1. Refinance and get all or most of my money back so I can continue in the Energy Wise Investment game.
2. Advertise for the highest rent in the neighborhood. (This is easy when you’ve mastered the Wow! factor.)
3. Add Solar to bring the Electric Bill close to Zero. (This wont take much, because you’ve built a tight building envelope and a great HVAC system)
4. Tenants will be happy with the rent when they know the utility bill is going to come down more than enough to compensate for it. (Educating the tenant cannot be left to chance)
5. You enjoy a strong positive cash flow. And the tax credit and the rebate.
6. Your tenant is happy and paying less monthly than if you hadn’t added Solar.
7. You know you’re doing the right thing for the planet and the community
8. And to come full circle: —The low-ball appraisal becomes irrelevant.
That’s a lot to like and I’ll be putting Solar on more and more rental homes.
In the first 3 1/2 days the system has generated 100 kilowatt hours. Here in Central California with our 5 tier billing system (PG&E) that means somewhere between $11 and $48. Not bad for the 2.81 KW system in 3 1/2 days. For more details see last Tuesday’s webinar slides in Planetsavers University right here on GreenEarthEquities.com. Next Tuesday, I’ll interview Terry Shelton, the Solar Contractor on the Tuesday Webinar. We’ll talk more about the counterintuitive case where It makes sense for Investors to put Solar on their rentals!!! If you haven’t already, fill out a comment form and we’ll send you an invite with details on each Tuesday’s Webinar.
BTW For some incisive thoughts on our housing stock and Home Star, see Arthur Beekin’s thought provoking piece in the Healdsburg Tribune. Whether Home Star passes or not, Energy Wise Renovators hold a powerful key to fixing our inadequate housing stock and saving our Planet, One House At A Time … Especially when their renovations are tight and efficient and then they go to Near Net Zero with a small PV system! Stay tuned…..
This is so totally awesome. I might need to speak to your wife and remind her that you indeed haven’t lost it, but are instead the “future.” Keep up the good work.