Installers Series #1: The Rental Properties Solar Market - Opportunities and Challenges

Itai Peri
January 10, 2024
5 min read


With the rapid growth of the solar energy industry, there's been a significant focus on residential installations. However, one market segment that remains largely untapped is rental properties. In this blog post, we'll explore the opportunities and challenges presented by the rental properties solar market and discuss how solar installers can capitalize on this emerging opportunity.

Understanding the Market

The rental properties market represents a vast and largely untapped opportunity for solar installers. In the United States alone, there are currently approximately 14.2 million single-family rental residential properties. Despite the potential, the penetration of solar in rental properties remains significantly lower than the general residential market, with estimates suggesting it is well below 1%. This stands in stark difference compared to the 4% of the general residential market, underscoring the immense opportunity for growth within the rental properties segment.

It's worth noting that while some rental properties were intentionally equipped with solar panels, many of them are owner-occupied-turned-rental properties, which had solar installed at the time the landlord was living at the residency.

Why don’t more rentals have solar installed?

Let's dive into things from the landlords' side. While the idea of adding solar energy to rental properties sounds great, there are some real challenges that have kept it from taking off.

Getting solar on rental properties can provide several benefits to landlords such as increased income (e.g through increased rent prices); attracting tenants who care about the environment, which could mean fewer vacancies and more stable rental income over time; and increased property value in case of a sale.

Despite the potential benefits, several challenges have hindered widespread adoption of solar energy on rental properties. One significant hurdle is what's known as the split incentive problem. This arises because landlords typically bear the upfront costs of installing solar panels, while tenants enjoy the direct benefits in the form of reduced energy bills. As a result, landlords may be hesitant to invest in solar energy, fearing they won't see a sufficient return on their investment. Moreover, this dilemma poses a risk to financing institutions, which may be reluctant to provide loans for solar systems on rental properties due to uncertainties surrounding the return on investment.

Additionally, there's the risk that increasing rent prices to cover the cost of solar panels could deter potential tenants, leading to prolonged vacancies and financial losses. Imagine a tenant who’s looking for a rental home for up to 1600$, and misses on Zillow the lovely home at 1700$ which includes free solar energy. Balancing the desire to enhance the property with the need to remain competitive in the rental market poses a considerable challenge for landlords considering solar installations.

Financial Opportunity for Installers

Solar installers have a prime opportunity to address landlords' unique challenges and take the lead. With millions of rental properties awaiting solar installations, understanding and overcoming these hurdles is key. Utilizing the right innovative platforms tailored for landlords' needs, installers can unlock the potential of this untapped market.

By focusing on specific concerns like financing, the split incentive problem and the risk of increased rent prices, installers can become trusted partners. Offering tailored solutions and comprehensive support empowers landlords to embrace solar energy without financial or logistical worries.

Solar installers play a crucial role in educating landlords about these options and guiding them through the process.


The rental properties solar market offers a significant yet largely untapped opportunity for solar installers. Despite challenges like the split incentive problem and financing uncertainties, there are clear benefits for landlords in embracing solar energy. Solar installers that will take the lead in addressing these challenges and guiding landlords through the adoption process, can benefit greatly and take the lead in the market.

In the upcoming article, we'll delve into the intricacies of current monetization methods for solar installations on rental properties. From examining their drawbacks and challenges to presenting a new and innovative approach called consumption-based solar billing, we'll explore how this method can alleviate problems in the market and unlock its full potential. Stay tuned to discover a groundbreaking solution that benefits both installers and landlords in the rental properties solar market.

Itai Peri
Co-Founder & CTO