Solar power can help your rental stand out and reduce vacancy, but it rarely adds a large weekly rent premium on its own. Most tenants choose a home based on location, size, and suitability first, then view solar as a nice extra when comparing similar options.
In our work with landlords and investors across Auckland, Wellington, and Hawke’s Bay, we see solar perform best as a rent faster and keep tenants longer feature, not a straightforward add $2,000 per year to the rent feature.
Key takeaway: Solar usually improves vacancy and retention more than it lifts weekly rent.
It is also important to be clear on who pays what. Tenancy Services’ general position is that if costs are a result of living in the home, the tenant pays them, and if utilities are shared between different tenancies, the landlord must pay.
For more information, refer to Tenancy Services (MBIE) - Utilities and other payments.
Why Tenants Rarely Search For Solar First
Most tenants do not start their search by filtering for solar. They start with the fundamentals:
- Location and commute
- School zones and local amenities
- Number of bedrooms and living spaces
- Parking, storage, and outdoor areas
- Pet suitability and overall condition
A family might prioritise a three or four bedroom home in a strong school zone. Professionals often focus on proximity to the CBD fringe, public transport, cafes, and entertainment. Solar generally comes into play later, when a tenant is choosing between two similar options.
That is why solar is rarely a primary driver of rent, but it can influence the final decision.
What this Means for Landlords and Investors
If you are investing in solar, or you already have it from living in the home previously, the best way to think about it is this.
Solar supports faster leasing
If a tenant is comparing similar homes, solar can be the tie breaker. That can mean fewer days on market, fewer open homes, and a smoother leasing campaign.
For landlords, the dollars are often realised through reduced vacancy rather than higher weekly rent. This matters because vacancy directly impacts rental yield.
Solar can improve tenant retention
Once a tenant experiences lower power bills, they are more likely to factor that benefit in when considering whether to renew or move. It becomes part of the overall comfort and cost profile of the home, even if it was not the reason they rented it.
Expect modest rent impact, not a direct payback line
A real scenario we see is an owner expecting a premium because solar might save a tenant around $2,000 per year, which is about $38 per week.
The logic feels simple, but the market rarely works that way. If a tenant paid an extra $2,000 per year in rent, the savings are effectively cancelled out. Tenants still have a budget ceiling, and they still compare the home to other options in the same location and bedroom bracket.
In practice, the uplift is usually modest, sometimes around $10 to $20 per week when the home is otherwise well presented and correctly priced for the suburb. That is $520 to $1,040 per year, not $2,000.
A quick reality check table
| What owners often expect | What we more commonly see |
| “Solar saves $2,000 per year, so rent should rise by $2,000 per year.” | Rent may rise modestly, often $10 to $20 per week if the home is already strong. |
| “Tenants will actively search for solar homes.” | Tenants usually search by location and bedrooms first, solar becomes a nice extra. |
| “Payback comes through weekly rent.” | Payback is more likely through fewer vacant days and better retention. |
How Solar Credits and Power Bills Work in a Rental
This is the part that often causes confusion, especially when owners are moving overseas and turning their own home into a rental.
Who normally pays the power bill?
In most standard residential tenancies, electricity is a tenant paid cost because it results from living in the home.
Landlords can agree to include some services in the rent, but if you do, it needs to be clearly documented so there is no dispute later.
Can a landlord keep the power account in their name to collect solar export credits?
Some owners ask whether they can keep the electricity account in their own name, receive the solar export buy back credits, and then charge the tenant for the portion of power used.
The challenge is that it introduces complexity and risk, because:
- You are effectively mixing a tenant controlled, usage based service with a landlord billing arrangement.
- If anything is unclear, disagreements tend to land on what is fair and what is measurable.
- If there are shared services across different tenancies and usage cannot be clearly allocated, the landlord is responsible for shared utilities.
For most single tenancy homes, the cleanest setup is still:
- Tenant holds the electricity account.
- Tenant benefits from using solar generation during the day.
- Export credits, if any, flow through the tenant’s plan and meter arrangement.
If you are considering anything more complex (for example, electricity included in the rent, multiple dwellings, or shared meters), it is worth getting proper advice and documenting the arrangement carefully.
What are buy back rates really worth?
Buy back rates are what electricity retailers pay for excess solar exported to the network, usually measured in cents per kWh, and they vary by retailer and plan.
At the time of writing, we were seeing buy back rates around 12c per kWh.
For many households, the biggest value still comes from using solar power in the home during the day, because the retail electricity rate you avoid paying is often higher than the buy back rate you receive.
Check out EECA research on the value of residential solar PV and storage in New Zealand.
What We Typically See in Practice
Owners overestimate rent premium and underestimate presentation
Solar does not compensate for a tired home, poor heating, or deferred maintenance. If a property is average in presentation, solar will not turn it into a top quartile rental.
The homes that benefit most are:
- Well maintained and healthy home compliant
- Clean, warm, and well ventilated
- Priced in line with comparable rental
- Solar then becomes an extra, not a cover up.
Solar is often installed for owner occupier reasons
Many landlords add solar when they live in the property. That is a valid personal decision, but the rental market lens is different. Tenants do not always value the same features in the same way owners do.
The right expectation is:
- Solar is unlikely to be the number one reason a tenant rents.
- Solar is very unlikely to justify a large rent increase by itself.
- Solar can reduce vacancy and support renewals.
Confusion around credits, metering, and charging tenants
We regularly see owners asking to keep bills in their name and on charge tenants. This often becomes messy fast.
The simplest approach for most standard rentals is to keep utilities straightforward and keep the agreement clean, with the tenant responsible for electricity usage as a living cost.
Practical Tips if Your Rental Has Solar
- Advertise it clearly, but do not build the whole listing around it - Mention solar panels and lower daytime power costs alongside the core drivers like location, layout, heating, and parking.
- Use comparable evidence first, then treat solar as a small adjustment - Set rent from true comparables, then consider whether solar supports a modest premium.
- Make it easy for tenants to understand - Leave simple instructions about the inverter, what normal operation looks like, and who to call if there is a fault.
- Maintain and insure it properly - Solar is a fixed building asset, so it is worth making sure your insurer has it noted on the policy. That is mainly about disclosure and reinstatement cost, if panels, wiring, or the inverter are damaged in a storm, impact event, or an electrical fault. A quick check can help avoid surprises if you ever need to claim.
- Avoid complicated billing structures unless you truly need them - If the goal is long term performance and fewer disputes, a low friction tenancy setup usually wins.
Conclusion
Solar power can be a genuine advantage in a rental, but it is usually a secondary decision factor for tenants. The real value tends to show up through faster leasing and better retention, rather than a large weekly rent premium.
If you want to position a solar property correctly, focus on strong presentation, accurate pricing, and a simple tenancy setup where responsibilities are clear.
