Installers Series #4: Tax Incentives, Regulations and Legal Framework

Itai Peri
January 24, 2024
5 min read

In this final article of our series on solar installations on rental properties, we delve into an often overlooked aspect: tax incentives and regulations. Building upon our exploration of the potential of the rental properties solar market, current monetization methods and leveraging consumption-based billing, and why installers should enter this market, we now turn our attention to the regulatory landscape. Understanding tax incentives and regulations is crucial for solar installers and landlords alike, as it can significantly impact the feasibility and profitability of solar projects on rental properties.

Tax Incentives and Benefits for Solar Installations on Rental Properties

Solar installations on rental properties can qualify for the Investment Tax Credit (ITC), a federal tax incentive that offers a 30% tax credit on the cost of solar energy systems. This tax credit can significantly reduce the upfront costs of solar installations for landlords, making solar investments more financially appealing. Additional state-level or local incentives may be available, and should be checked for individually.

Additionally, landlords can leverage other federal tax benefits to further enhance the economic attractiveness of solar installations. The Modified Accelerated Cost Recovery System (MACRS) allows landlords to depreciate the cost of solar installations over several years, reducing taxable income and increasing cash flow.

Understanding the Legal Framework

Consumption-based solar billing requires a robust legal framework to ensure compliance with regulations and protect the interests of both landlords and tenants. At the heart of this framework are Power Purchase Agreements (PPAs), which outline the terms and conditions of the solar energy transaction between the landlord and the tenant.

PPAs come in two main types: fixed-price and consumption-based. In fixed-price PPAs, tenants pay a predetermined monthly fee for access to solar energy, regardless of their actual energy consumption. Conversely, consumption-based PPAs allow tenants to pay for the solar energy they consume, providing a fair and transparent billing method that aligns costs with usage.

However, it's important to note that in some states, only fixed-price PPAs are available, which do not allow for consumption-based billing. In such cases, tenants pay a predetermined monthly fee for access to solar energy, regardless of their actual energy consumption.

Navigating the legal landscape surrounding PPAs requires careful consideration of state regulations and local ordinances. Solar installers play a crucial role in guiding and educating landlords about this process. As part of its platform, Wand Solar offers a streamlined way to facilitate the PPA between the landlord and the tenant.

Navigating the Legal Framework

While navigating the legal framework and ensuring compliance can be complex, Wand Solar is here to simplify the process for solar installers and landlords alike. Our platform offers comprehensive solutions tailored to the specific needs of landlords and solar professionals.

From guiding landlords through the intricacies of PPAs to ensuring regulatory compliance and facilitating seamless billing practices, Wand Solar provides the tools and support needed to implement consumption-based billing effectively. With our user-friendly platform, solar installers can confidently offer innovative solutions to landlords, unlocking new opportunities in the rental properties solar market.

Navigating Regulatory Challenges

While consumption-based billing offers numerous benefits, navigating regulatory challenges is essential to ensure compliance and mitigate risks. One significant challenge is adhering to utility rates, particularly in jurisdictions where landlords are prohibited from charging more than the utility rate for solar energy.

This challenge becomes even more pronounced in Time-of-Use (ToU) tariff scenarios, where utility rates vary based on the time of day. Implementing consumption-based billing under ToU tariffs requires careful planning and monitoring to ensure that tenants are billed accurately and fairly.

At Wand Solar, we handle all of the utility rate tracking, even when ToU tariffs are used, ensuring peace of mind for the landlord and a 100% accurate solar bill at the end of each period.


Consumption-based solar billing represents a paradigm shift in the rental properties solar market, offering a fair and transparent approach to monetizing solar installations. By understanding the legal framework and addressing regulatory challenges, solar installers can unlock new opportunities and empower landlords to embrace solar energy with confidence.

Consumption-based solar billing platforms like Wand Solar can greatly mitigate the added complexity introduced by the required legal framework, making the process quick and seamless for installers, landlords and tenants alike.

Itai Peri
Co-Founder & CTO