16 June 2023

ANU study examines why renters aren't getting the benefits of solar

| James Day
Join the conversation

Co-authors Dr Lee White and Dr Bjorn Sturmberg (research leader in the Battery Storage and Grid Integration Program) say tenants have been largely excluded from the household sustainable energy transition. Photo: Giorgio Trovato.

A new study has revealed Australians are missing out on the benefits of the solar panel boom because property investors believe tenants won’t pay higher rent if they are installed.

Australian National University (ANU) researchers surveyed 931 property investors across the country and found several barriers holding land owners back from installing rooftop solar photovoltaic (PV) systems for their rental tenants.

Dr Lee V White and her colleague Dr. Bjorn Sturmberg are co-authors of the study and work within the school of regulation and global governance.

According to Dr White, the findings “run contrary to previous studies showing Australian tenants are willing to pay for more liveable homes and solar”.

READ MORE Sustainability scheme given $50 million boost to spark more environmentally friendly renovations

Ms Danielle Gavin, a Department Manager with Civium Property Management, said based on her experience with tenants this was true. But property owners weren’t willing to put solar on land that was already an investment.

“However, if you have an owner living in the property and they put solar on for their own benefit but have to move out; the property is one, renting quickly, and two, achieving higher rents for it,” Ms Gavin said.

Lee White portrait

Research fellow of the Zero-Carbon Energy for the Asia-Pacific Grand Challenge, Dr Lee White. Photo: ANU.

Dr White said this lack of understanding among property investors, as well as renters, was due to the poor access of information that clearly showed the benefits.

“Electricity from solar systems will vary depending on system size, the direction it’s facing, the tilt on the roof, and other things that may be challenging for a renter to see from the ground,” Dr White said.

“Solar systems typically come with monitoring systems that can track their actual output over the course of a day; and homeowners who install solar systems benefit from this, in being able to time their electricity use and understand their savings.

“Making some of this visible in rental ads and property manager discussions could help with individual home choices.”

Ms Gavin agreed but said not everyone understood data or graphs.

READ ALSO Historic Civic laneways upgraded from the ‘bottom up’ and open for business

The study recommended state and territory governments follow Queensland’s example in creating a publicly accessible data set that was regularly updated with the latest information on solar system performance.

This data set shows tenants in solar-installed rentals how much they gain in financial (dollar) terms, rather than more abstract rating systems such as energy efficiency stars.

The study also found the majority of property investors preferred to pay costs up front, rather than use interest-free loans or government subsidies.

Ms Gavin believed this finding reflected investors’ negativity towards paying overheads.

“I haven’t spoken to any owner regarding solar specifically, but with regards to other schemes such as insulation, they [investors] think: ‘it’s only going to cost me five or six grand, I’m just going to pay it outright and use it as a tax deduction.'”

She said rising costs were the most pressing issue ACT owners currently faced, and the best incentive the government could provide would be to lower land taxes.

Join the conversation

All Comments
  • All Comments
  • Website Comments
Incidental Tourist2:04 pm 20 Jun 23

We already have 2050 net zero target, so extra lease requirement is irrelevant long term anyway. Also owner occupiers should be in the mix and not lag behind tenants if there is an earlier deadline for residential dwellings. But even today everybody both tenants and owner-occupiers alike can choose “Green option” when paying their energy bills fully offsetting their own carbon footprint. The extra green charge is minimal comparing to solar panels capital investment. And perhaps this is better alternative as it uses an economy of scale beyond individual roof top solar panels which have well known limitations.

I actually had solar panels installed on my rental properties in South Austraia and Western Australia some years ago, purely for the benefit of my tenants and no, I did not raise the rent when I did.

On a recent visit to my property in South Australia, I asked my current tenant ther what they thought of the solar. Like most people, she had no idea that by using appliances when the sun shines, she uses solar energy, rather than drawing from the grid and consequently she didn’t think it was particularly beneficial.

From my perspective as a landlord, my properties did not rent out quicker after solar installation, nor was the provision of solar appreciated or brought in a higher rent.

I did not have solar installed at my rental properties to gain a benefit, but purely to contribute towards reducing reliance on fossil fuels.

Having said that, I do believe that every new building approval – be that freestanding houses, unit blocks, office and commercial buildings should require the installation of solar panels.

You wait, this will become mandatory soon, we should have a wish list too for landlords for rents to fill in , coloured walls. , new kitchen , appliances which specific ratings etc etc , what a joke

GrumpyGrandpa5:45 pm 19 Jun 23

If someone put panels on their owner-occupied, potentially they save money, with tax implications.
If they put panels on an investment property any increase in rent is shared with the ATO.

Installation of panels on an Investment property is a capital improvement. It’s not repairs and maintenance that can be claimed immediately. The cost of the panels would need to be depreciated over their life expectancy of 20 years.

Put simply, the University study should have been “Why would landlords put solar panels on their investment properties?”

Can the new ceiling insulation that is required to be put in rental properties (mandated by the ACT Govt) be claimed as a tax deduction? The ACT Govt said it could be, but I’m not sure the ATO would agree…

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.