Will Solar Energy Add Value to Your Investment Property in Hobart?
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Baxton.me
27 January 2018

Will Solar Energy Add Value to Your Investment Property in Hobart?

Australia is buying in to domestic solar energy systems in a big way. But will it add value to your investment property in Hobart? There’s no simple answer, and whether you opt for solar energy will, to a large extent, depend on your individual circumstances.

Solar Energy and Return on Investment

Solar energy can ultimately pay for itself – but only if you’re the person who is responsible for the electricity bill. Since you’re probably renting out your investment property in Hobart until such time as you decide to sell up, you can’t expect to recoup as much as you would if the property was your primary residence because your tenant would ordinarily pay utility bills.

Your tenants may be willing to pay a little more rent in exchange for the savings they gain through reduced energy costs – but if you load the rent to equal that amount, they aren’t going to be interested. From your perspective, that means a longer time before your solar energy system benefits you in any material way.

Maintenance Issues

While grid tied solar energy systems that feed unused energy back to the grid should require very little maintenance, storage batteries are costly and may require more frequent replacement than solar panels. As property owner, you’re responsible for those maintenance costs unless you can reach an agreement with your tenants that stipulates that they’re responsible for any upkeep.

Once again, they’ll be reluctant to take this on unless they’re getting the energy “free.” In other words, you can’t charge them a great deal more than they’d pay for a similar property without solar energy.

If your primary motivation is to reduce emissions and benefit the planet, this might not matter to you, but from a financial standpoint, you probably wouldn’t benefit.

When do You Plan to Sell?

Prospective buyers might or might not be thrilled with the idea of buying a property with solar energy laid on. Some don’t like the look of solar panels, while others will recognize the potential energy cost savings or be eager to pay more so that they can own a “green” home.

Photovoltaic panels do, however, have a limited lifespan. Most providers will tell you that you can expect at least twenty years of service from your solar panels, and some manufacturers offer guarantees. However, if you’re planning to sell up ten to fifteen years after the installation date, your solar system may well be outdated and nearing the end of its useful lifespan. This could prove to be a disincentive for potential home buyers.

Solar Energy on Your Investment Property: The Bottom Line

From a financial perspective, there’s little benefit in installing a solar system on a rental property. Even if you’re planning to sell in a year or two, you won’t be able to add the full value of the system to your property value, and you won’t be able to recover as much of its cost as you would if you had you been living on the property.

However, if you see solar energy as being the “right thing” to do from an environmental perspective and are happy to accept that virtue is its own reward, you should certainly go ahead. As property managers in Hobart, we don’t see tenants insisting on solar energy as yet. Will solar energy add value to your property? To a certain extent, yes, but don’t expect it to be a major money-spinner right now.


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The information contained in this article is based on the authors opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.

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