Solar on a rental?

[thorbjorn88]

I currently live in a duplex and rent the other side. I will be moving out in about a year and renting out both sides. I'm considering installing solar panels. Based off some analysis from a local company I'd need an 8.5kw system to get a net zero electric bill based on past usage. Tesla's no down solar loan for this system is about $83 a month (that's for a 8.1kw system so I'd need like two more panels). The average combined electric bill for the units is $185, $115 for the larger unit and $70 for the smaller. If I charged my tenants a fixed electric fee or increased the rent and included electric by $100 and $60 respectively I'd be giving my tenants a 15% discount on electric, using a renewable resource, and netting around $70 a month. Am I missing a draw back? What are some down sides I might be missing? Oh yeah, we live in Arizona so it's sunny all the time and electric is the biggest utility bill.

[bacchi]

The major drawback of including electricity in the rent is if/when your tenants use more electricity than you would've ever guessed. I tracked w/d use for my tenants one month. They -- a couple -- used the washer 40 times over a 2 week period.

There are 2 meters, right? So you'd need 2 different systems?

Personally, I'd install the panels, increase rent by $100, advertise that it's all solar, and let them cover the electricity, if any.

[thorbjorn88]

There is actually just one meter so just one system. It is technically a house with a guest house but duplex is fewer letters to type. So I have a sub meter I use to split the bill with the current tenant. Another benefit of including electric is that I wouldn't have to check the sub meter to split electric between the units when I don't live there.

[theoverlook]

You would be shocked at how many seemingly reasonable people go completely wild when a utility is free to them. A good friend of mine had free electricity at his office so he kept his a/c at something like 55 degrees, 24 hours a day, whether or not he was there. I've had acquaintances say that tenants started running pay laundries out of their house when they had free water. Any unmetered utility that the tenant has control over the consumption is going to be a potential nightmare. So any offer should include an "up to $x" or "up to Xkwh" limitation.

[thorbjorn88]

That's a good point. I did the estimates based on my last tenant who kept it so cold I had to wear a sweater there in the summer using a 30+ year old AC. We got a new AC for that unit so that should bring it down. But I'll definitely do the up to Xkwh clause. 

Would you charge a fixed electric fee or just add it to the price or rent? Will people do the math if I include it in the rent?

[bacchi]

Would you charge a fixed electric fee or just add it to the price or rent? Will people do the math if I include it in the rent?

Definitely keep it separate in the ad, whatever you do: "Rent is $1000/month + $100 for electricity." People do quick looks and will see $1100, even if the next sentence is "Rent includes electricity, gas heat, water, sewer, wifi, and trash." I learned that lesson.