Solar Homes program expanded to support renters and landlords

Rising electricity prices coupled with the falling cost of renewable energy sources has seen over 2 million Australian households taking advantage of rooftop solar. This is great for those lucky enough to afford their own home, but what about the 30% of Australians who rent?

Unless you’ve managed to find an elusive rental property with panels installed or have an accommodating landlord who agrees to your solar request, the dream of decreasing your electricity cost while reducing greenhouse gas emissions has been just that, a dream.

Let’s face it, landlords are unlikely to fork out the cost to install solar panels without receiving the benefits of cheaper electricity, unless they’re doing it for environmental reasons. And most tenants aren’t interested in spending money to improve someone else’s property – especially if they can’t guarantee that they’ll live there long enough to recoup the cost.

To solve this problem, referred to as “split incentive”, the Victorian Government has expanded the Solar Homes program giving households who rent access to the benefits of solar. But it’s not just renters who’ll reap the rewards, landlords also win thanks to cheaper solar panels, capital improvements, and the ability to attract top tenants with strong demand for buildings with renewable energy.

The program in detail.

Phase two of the Solar Homes program, launching 1 July 2019, provides $82 million over 10 years to support 50,000 Victorian households who rent, to install solar panels. This equates to savings of $890 on electricity bills every year for the typical Victorian renting household.

So how exactly does it work?

Firstly, tenants and landlords will need to agree to share the costs of installation – a cost that is subsidised by government through a rebate and no-interest loan. Renters will make a 25% contribution that is spread out over four years through a small levy on rent (fees that will be offset by lower electricity costs), the landlord will cover 50%, and the government will cover the other half.

For a $4,000 panel, for example, the government will pay half, the landlord will invest $1,000 over time, and the renter will contribute a monthly levy through their rent, totalling $250 per year for four years.

Owners corporations, or body corporates, can also access a rebate and interest-free loan if they can demonstrate that the benefits of installing solar panels will be passed on to tenants.

This initiative is welcomed by key industry players including Tenants Victoria and Renew who believe this program will deliver significant benefits for both tenants and landlords.

Why not add a battery?

The Solar Homes program is also providing $40 million to help 10,000 Victorian homeowners, including landlords, install solar batteries to make the most of their panels by storing electricity for use later on.

This equates to a 50% rebate up to a maximum value of $4,839, which is based on the price of a typical 11 kWh home battery system.

This investment will not only increase the value of the property but also attract savvy tenants with electricity bills cut by around $650 a year using a standard 11 kWh home battery.

Next steps

Visit the Solar Victoria website to find out more about the Solar Homes program for renters, and solar battery rebates.