Low-interest loans don't encourage landlords to install solar

This year's Fderal budget allocated $1 billion for low-interest loans to homeowners for energy efficiency upgrades, installing solar panels and to  replace gas appliances with electric.

But research from scientists at the Australian National University suggests low-interest loans don't encourage landlords to install solar on rental homes.  They argue, other measures are needed to make sure renters benefit from solar technology.

They argue property investors don’t want to pay for solar technology because they don't directly reap the benefits. However, "landlords routinely make other improvements to investment properties, such as kitchen upgrades, even though they’re not using the kitchen."

Bjorn Sturmberg, Lee White, Marla Hammerle Battery Storage & Grid Integration Program, Australian National University

The upfront cost is the second reason landlords  baulk at installing solar.  They also believe renters aren't willing to pay higher rent for properties with solar.

But when offered a choice of hypothetical policy options, two-thirds of landlords studied by the ANU researchers, preferred upfront payment of solar systems rather than an interest-free loan. Which suggests loans aren't the key tipping point for the majority of landlords.

The research also examined barriers for apartment landlords when it comes to energy efficiency upgrades and installing solar panels.  They found many worried about issues such as body corporate approval, and physical and legal barriers.

This suggests policies are needed to increase the energy efficiency of different types of rental housing stock. The researchers recommend the real estate industry, particularly property managers who have relationships with both landlords and tenants, should be targeted.

Incentives could be provided to investors and property managers who make a home less reliant on gas over time. The energy-efficiency performance of a home should also be made available to renters, including the amount of energy generated by solar panels, and the money they save.

The researchers also argue tax breaks for property investing, such as negative gearing, should be conditional on rental properties meeting minimum energy efficiency standards.

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