The conversation around solar power for rental properties has always been complex. Tenants hesitate to invest in a home they don’t own, while landlords are reluctant to spend without guaranteed returns. However, there’s a way both parties can benefit.
How Landlords Can Earn More with Solar Power
Installing solar panels increases the value of your property and allows you to charge higher rental rates while lowering your tenant’s electricity costs. This creates a unique opportunity for long-term gains.
You can read our article, Is Solar Power Cheaper than Electricity in South Africa? – to give you some more details and a brief overview on the tax rebates individuals and businesses can claim.
A Smart Negotiation Strategy for Tenants
If you’re a tenant paying R6,500 per month for electricity, negotiating a solar installation can be mutually beneficial. Consider proposing:
- A high-quality solar system that reduces electricity costs by 99%.
- An increase in rent of R2,000–R4,000 per month.
- Immediate savings of R2,500 monthly (x 60 months = R150000)
Investment Breakdown:
- System Cost: R220,000
- Tenant Contribution: R2,000–R4,000 per month
- Payback Period: Less than 5 years
- Total Tenant Savings in 5 Years: R150,000
- Landlord’s Asset Paid Off in 4-5 Years
Tenant win – Landlord win – Eskom’s loss.
Conclusion: How Solar Power Creates a Win-Win Investment
- Landlord: Gains a long-term asset while increasing rental income and property value. Landlords who own property in a registered business may qualify for a tax incentive, and if you own a commercial property, you can sell excess power to the City of Cape Town and solar power to the tenant.
- Tenant: Saves on electricity while benefiting from a consistent, stable power supply.
With rising electricity costs in South Africa and recurring blackouts, solar power is more than just an alternative—it’s the future. Whether you’re a landlord looking to maximise returns or a tenant seeking savings, solar is the ultimate investment in energy efficiency.
