Solar Power - What's in it for Landlords?

23-Dec-2013

As we enter the new age for energy on our planet, it is surprising to note that recent changes to the residential tenancy legislation, in several states, don't reflect what is happening in reality for landlords and tenants.

Of particular interest are solar panels.

The argument to install solar panels as the source of a property's energy is a good one, in fact there's not really a debate for the efficiency. There is, however, uncertainty over who pays 'going forward'- when property is tenanted.

Supporting the argument for property owners to install solar panels is the current increased government rebate for energy credits supplied to the grid from the property. The rate of return is currently at a premium with expectations it will reduce again. With this incentive expiring shortly, many landlords have taken the opportunity to 'solar up' their investment properties now. 

With the huge cost of actually buying and installing solar panels, the ability to turn energy credits into cash for landlords is attractive.

So far so good.

The difficulty for landlords however comes in several forms.

1. The current government incentive requires that the electricity is connected to the person's name who is to receive the increased rebate. 

Therefore the landlord. Can a tenant be charged for electricity when the account is not in their name?

2. A landlord's credits on a solar energy invoice are considered income and therefore tax deductible. 

Accordingly, should the reduced amount be passed on to the tenant?