With all the talk about solar power incentives for homeowners, many renters feel left out. From 1 July 2019 onward that will change as the Victorian government is making the $2,225 rebate available for rental properties, allowing renters to also benefit from lower energy bills. In this article we explain everything you need to know.
What’s the government offering
The incentive on offer for landlords and renters is the same $2,225 rebate as being offered to owner-occupied homes, as are the interest free loans.
The difference is in the beneficiary of the savings the solar power system generates. In owner-occupied homes, it’s the owner of the property that receives the savings. Under the “solar for rental properties” scheme, those savings go to the tenant.
Who is paying for the solar power system under the “solar for rental properties” scheme
There will be two streams available from 1 July onwards. Regardless of the stream the tenant and landlord decide to go with, the tenant will have to be the beneficiary of the electricity savings.
In this situation, the landlord pays for the full system minus the rebate.
This stream will not become available on 1 July 2019, but will become available later in the year. In this situation, part of the solar power system (minus the rebate) will be paid for through the interest-free loan.
In this situation it’s possible for the tenant to contribute to the cost of the installed solar power system.
What’s the benefit for renters
The average electricity bill in Australia is about $1,700 per year. The Victorian government expects rental properties to be able to save up to $890 on that number when they get solar power installed.
And with electricity prices expected to continue keep going up, the savings will only continue to grow with it.
What’s the benefit for landlords
The landlord will be responsible for most, if not all of the upfront cost of the solar power system, yet won’t receive any of the savings generated by the solar power system. On the face of it, you’d be forgiven for thinking that that might make the “solar for rental properties” scheme seem pretty unappealing.
But between solar power system being a great tax deductible, value-add to the property and making a property much easier to rent out. There are some significant benefits for landlords, and many are jumping on the opportunity being given by the Victorian government.
What’s the process for the “solar for rental properties” rebate
The requirements for the “solar for rental properties” rebate are similar to those for owner-occupied properties:
- The tenants of the property have a combined household Taxable Income of less than $180,000 per annum
- The rental property is valued at under $3,000,000
- Does not already have a solar panel system installed on their property
- Has no previous participation in the Solar Homes program.
In addition to these requirements, both the tenant and the landlord are required to sign a Solar Homes rental lease agreement which can be found here.
It is possible for a landlord to apply for both a rebate for a solar power system on their own, owner-occupied property and their rental property.
In addition to the eligibility criteria for the property and applicants, there are also several requirements regarding choosing a retailer, product and installer. These are:
- a Clean Energy Council Australia (CEC) approved product
- a CEC accredited installer that can provide a statement that they have had no significant contravention history, or prosecutions registered with WorkSafe Victoria.
- And new for 1 July 2019: a CEC approved solar retailer
If you would like to know more about the Clean Energy Council Australia, we’ve written an article about them here.
(RELATED: Make sure you don’t fall victim to a dodgy solar power retailer and read our article on “How to avoid dodgy solar power retailers” here.)
After an overwhelming demand for the solar power rebate for homeowners back when it was first announced caused long delays in application processing times, the Victorian government will be limiting the amount of rebates that are available each month. For landlord and renters, there will be 166 rebates available each month. For homeowners 3,333 rebates will be available.
Once those are exhausted, homeowners and renters wil have wait until the next month to apply.
Other rebates available
Several other solar rebates are also becoming available to Victorians in the new financial year:
- Solar power rebate for homeowners (more details available here)
- Solar Hot Water rebate
- Solar battery rebate (more details available here)
- Interest free solar power loans (more details available here)
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