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Renewables for rent: Sustainable investment in the future Solar Victoria Chief Executive Officer Stan Krpan outlines the many benefits of undertaking energyefficiency or solar upgrades for rental properties. Australians love property. Whether it’s making plans to buy, owning our own home, renovating or investing.
Renovation lifestyle shows are a national obsession, but it’s often about much more than aesthetics.
More than 2 million Australians own an investment property according to the Australian Taxation Office – around 20 per cent of all property owners.
Homeowners are increasingly interested in improvements that both increase value and save money, particularly on energy bills, which is why adding insulation and solar panels is so popular. More than 20 per cent of freestanding homes in Victoria – over 500,000 homes – now enjoy the financial and environmental benefits of solar energy.
For many, working hard and saving to secure that second property as an investment has been part of an important financial life plan to help them set themselves up for the future, reduce tax burden, secure additional income from hard earned cash or assets, and hopefully invest in capital growth. As a nation of home improvers and renovators, Australians also make efforts to improve the value of their investment.
Property improvements are often seen as a ‘no-brainer’ for primary places of residence, but investors have been wary of similar upgrades to their investment or rental properties. At times of financial uncertainty, rental providers may question the value of undertaking energyefficiency or solar upgrades for rental properties, because the immediate benefit of lower power bills goes to renters. This perceived ‘split incentive’ can act as a deterrent for investors. But it shouldn’t.
The Victorian Government’s Solar Homes Program has, since its inception in 2018, supported more than 160,000 Victorians to install solar. For many this would never have been possible, or affordable, without the generous incentives on offer and interest-free loans.
The benefits to all – both owneroccupiers and renters – are clear and immediate; lower power bills providing hundreds of dollars in savings, reduced carbon emissions and a more thermally comfortable home. While the benefits for rental providers may not be as immediately obvious, there are many, and investigating in them is worth your time. With the support of the Victorian Government’s Solar Homes program, eligible rental providers can access a $1,400 rebate on a solar PV system and an interest-free loan for four years for an equivalent amount. That reduces the upfront costs of a rooftop solar PV system substantially, by $2,800, with the remainder generally forming a depreciable, tax deductible investment for rental providers.
Energy-efficient ratings and energy saving features are important to all property seekers. 24 | The Estate Agent – NOVEMBER 2021
The REA Insights Energy Efficiency Housing Report released in June this year shows that, in addition to minimum bedroom and bathrooms on offer, many people searching for rental properties
