Solar on a rental property creates a split: the landlord pays and the tenant saves on bills. This guide explains how landlords can weigh the return, share the benefit fairly, handle maintenance and talk to tenants about it. On a rental property, the landlord usually pays for solar and the tenant enjoys the lower electricity bills. That split is the main reason many rentals still have no panels. Solar can still make sense for both sides when the landlord treats it as an improvement that attracts and keeps good tenants and supports a market rent, and when access, maintenance and communication are agreed clearly from the start.
Why the benefit lands with the tenant
Solar saves money by replacing electricity that would otherwise be bought from the grid, and the person paying the electricity bill is almost always the tenant. The tenant also receives any feed-in credit, because that credit belongs to the electricity account holder. The landlord owns the equipment, carries the upfront cost and is responsible for repairs. For a landlord, the return is indirect: a property that may appeal to more tenants, a stronger case for rent at the top of the local market, and a feature that adds to the property when it is eventually sold.
How landlords can weigh the return
Start with what a tenant would see. A 6.6 kW system in Sydney typically produces around 24-27 kWh a day on average, grid electricity commonly costs 30-45 c/kWh, and exported power earns only a few cents. A household that is home during the day uses more of that solar directly and saves more. The indicative price for a 6.6 kW system in Sydney is $4,500-$6,500 after STCs, confirmed after a site assessment.
Check the property itself before you commit. A roof that will need replacing within a few years should be dealt with first, because removing and refitting panels adds cost. An old switchboard may need upgrading before solar can be connected. If the rental is a townhouse or villa in a strata scheme, the owners corporation will usually need to approve panels on common property roofs, which adds time to the process.
The tax side is a question for your accountant, not a solar salesperson. Points worth raising:
- How is the system treated for depreciation or as a capital improvement on an investment property?
- How does it interact with the repairs and maintenance costs you already claim?
- If you sell, how does the system affect the property's cost base?
If you would rather not fund the system upfront, our solar finance guide compares paying cash with loan options, and the leasing vs buying comparison explains why ownership usually matters on a property you control.
Ways to share the benefit fairly
| Approach | How it works | Things to consider |
|---|---|---|
| Tenant keeps all savings | Landlord installs solar; tenant pays lower bills | Simplest option; rent is reviewed at the usual time under tenancy rules |
| Installed between tenancies | Solar is added while the property is vacant and reflected in the advertised rent | Clear to new tenants and avoids disputes over mid-lease changes |
| Tenant contributes | A long-term tenant funds part of the system under a written agreement | Needs clear terms on ownership and what happens if the tenant leaves early |
| Landlord sells electricity to the tenant | Landlord bills the tenant for solar power used | Brings energy-selling rules and billing obligations; rarely practical for a single house |
Rent increases and lease changes must follow the residential tenancy laws that apply to the property, so check the current NSW rules before you adjust rent or lease terms.
Access, installation and communication
Installing solar in an occupied rental means working around the tenant. Both the site assessment and installation day need entry to the property, and the landlord or managing agent must give the notice the tenancy laws require. Good practice:
- Tell the tenant early what is planned and why, and that it should lower their bills.
- Agree assessment and installation times with the tenant rather than simply issuing an entry notice.
- Explain that the power will be off for part of installation day.
- Give the tenant a simple guide to the inverter or app, and explain that running appliances in daylight saves the most.
- Offer read-only monitoring access if the tenant wants it, while the landlord or agent keeps the owner account.
If you are the tenant and would like solar, a short written request that explains the benefit to the property, not only to your bills, gives the landlord something concrete to consider. Tenants need the landlord's written consent for any installation and should never arrange electrical or roof work themselves.
Maintenance and faults
Because the landlord owns the system, repairs are generally the landlord's responsibility, in the same way as a hot water system. Put the arrangements in writing:
- Reporting faults: the tenant tells the agent if the inverter shows an error or the app reports no production.
- Monitoring alerts: fault alerts go to the landlord or agent so problems are not missed, particularly between tenancies.
- Cleaning and inspections: arranged by the landlord through a professional; professional panel cleaning is indicatively $150-$300.
- Safety: tenants should never climb onto the roof, operate isolators or attempt repairs.
Our solar maintenance checklist sets out the routine checks worth scheduling each year, and the managing agent can add them to the property's regular inspection routine.
Batteries and other upgrades on rentals
A battery shifts daytime solar into the evening, which suits tenants who are out at work all day. The federal Cheaper Home Batteries Program offers roughly 30% off the installed cost of an eligible battery installed with solar, and its value steps down every 1 January and 1 July, so confirm current eligibility and values on the Clean Energy Regulator's website. A battery is a larger outlay, though, so for most landlords a well-sized solar system is the sensible first step.
Smaller upgrades can also help tenants use more solar at low cost to the landlord: a timer on the electric hot water system so it heats in the middle of the day, or a controller that runs the pool pump in solar hours.
Next steps
Landlords should gather a year of the property's electricity usage if the tenant is willing to share it, check roof space and switchboard condition, and speak with their accountant and managing agent before committing. For a site assessment arranged around your tenant, request a free assessment from Blue Energy Solar. Tenants who want to cut costs in the meantime can use the Retail Electricity Tariff Comparison, listed at $79 in the energy market (an indicative price), to compare offers against their own usage.
Frequently asked questions
Can a tenant install solar panels on a rental property?
Only with the landlord's written permission, and in practice the landlord normally arranges it because the system becomes part of the property. Some tenants and landlords agree on a shared contribution, which should be documented, including who owns the system when the lease ends. Whoever pays, the work must be carried out by an accredited installer and a licensed electrician.
What happens to the solar when the tenant moves out?
The system stays with the property. The outgoing tenant closes their electricity account, including any feed-in arrangement, and the incoming tenant opens their own account and chooses a plan. The landlord or agent should check that the inverter is operating normally at the vacate inspection, confirm the monitoring still reports data and pass basic operating information to the new tenant.
Is solar worth it on a rental property I plan to sell soon?
If you expect to sell within a year or two, you may not recover much through rent before the sale, although recent, well-documented solar can be a selling point for buyers who value lower running costs. Weigh how long you will hold the property, the roof condition and local buyer demand. Keep the installation paperwork and warranty documents ready to hand over to a purchaser.
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