Solar panel installation for landlords

A quick guide

Rental income doesn’t just come down to the monthly rent. Running costs, tenant demand, and long-term property value all shape a property's profitability.

Solar panels are starting to play a role in that wider definition of profitability. They can affect both how much a property costs to run and how it’s perceived by prospective tenants.

With that said, this guide looks at where solar panels can make all the difference and what landlords should consider before installing a system.

Can solar panels boost rental income?

Yes, solar panels can help landlords increase net rental income. But, as we just hinted at, the return usually comes through a mix of:

• Savings
• Increased tenant appeal
• Long-term property value

Not least, a solar panel system can help landlords:

• Reduce electricity costs on bill-inclusive rentals
• Make properties more attractive to energy-conscious tenants
• Support EPC improvement plans
• Earn money through export payments
• Strengthen the value of the property over time
• Limit exposure to future energy price rises
• Reduce void periods

Let's take a look at some of the above in more detail:

1. Lower electricity costs on bill-inclusive rentals

Bill-inclusive rentals can be profitable, but they also leave landlords exposed to rising energy costs. The more electricity tenants use, the more it eats into your margin. This is especially true for HMOs, student lets, and short-term rentals, where usage tends to stay high throughout the day.

Solar panels help shift that dynamic. They generate electricity during daylight hours, which means the property relies less on energy bought from the grid. As people use more of that solar energy on-site, they start to lower their electricity costs.

For landlords covering the bills, that reduction feeds directly into monthly profit.

2. Charge higher rent by offering lower running costs

Many tenants look beyond the headline rent and consider the total monthly cost of living in a property.

That’s where running costs start to matter. Solar panels can lower electricity bills, which changes the overall cost. When a home is cheaper to run, tenants may be more open to a slightly higher rent. Lower energy bills can help offset that difference.

This can make the property easier to market, particularly when the advantage is clearly communicated. Listings should highlight:

• The solar panels already installed
• Lower reliance on grid electricity
• Improved energy performance
• Potential savings on bills

The bottom line: Lower running costs can make a slightly higher rent feel justified.

3. Reduce void periods

Empty weeks can take a significant bite out of a landlord’s annual return, so reducing void periods directly impacts profitability.

How quickly a property lets often comes down to how it compares with similar homes in the area. When rent and location are similar, tenants tend to look at running costs.

That’s where solar panels can make a difference. A property that is cheaper to live in is more likely to stand out.

4. Improve appeal to long-term tenants

Keeping tenants for longer has a direct impact on rental income. Every time a tenant moves out, there are additional costs, such as:

• Cleaning
• Repairs
• Agent fees
• Time spent finding a new tenant

On top of that, there may be a gap with no rental income.

Lower running costs can help reduce that turnover. When a property is more affordable to live in, tenants have a stronger reason to stay.

5. Support EPC improvement plans

Most privately rented homes in England and Wales need to meet minimum energy efficiency standards. If a property has an EPC rating of F or G, landlords usually need to improve it before they can continue letting it.

Solar panels can help improve a property’s energy profile. Although the exact impact on an EPC rating depends on the:

• Building
• Existing rating
• Heating system
• Insulation
• Roof suitability
• System size

For landlords, the key point is that solar panels work best as part of a wider approach. When combined with upgrades like insulation, efficient heating, smart controls, or battery storage, they can help improve energy performance and support the long-term lettability of the property.

6. Earn export payments through the Smart Export Guarantee

Solar panels can also provide an additional income stream through exported electricity.

Under the Smart Export Guarantee (SEG), some energy suppliers pay for excess electricity sent back to the grid, as long as the system meets certain requirements.

In practice, this means landlords may be able to earn money from electricity that isn’t used on site.

It’s worth noting that SEG payments aren't automatic. Landlords need to sign up to a participating tariff, and eligibility will depend on the system and scheme requirements.

Solar panels for HMOs: Why the numbers can work well

As we've already hinted at, HMOs are often one of the strongest use cases for landlord solar panels.

That's because HMOs usually have higher electricity demand than single-let homes. Shared kitchens, bathrooms, appliances, lighting, washing machines, tumble dryers, Wi-Fi, and multiple tenant devices can all increase usage.

If the landlord pays the electricity bill, solar panels can reduce one of the property's highest ongoing costs.

Solar panels can help HMO landlords:

• Reduce grid electricity use during daylight hours
• Protect profit margins on bill-inclusive rents
• Promote the property as greener and cheaper to run
• Improve appeal in competitive rental markets
• Support longer-term portfolio planning

Battery storage can also be worth considering for HMOs. This allows unused solar electricity generated during the day to be stored and used later in the evening when tenants return.

What about the cost of solar panels?

Solar panels require upfront investment, so it’s important to understand the likely return before making a decision.

Costs can vary, but the Energy Saving Trust estimates that a typical home solar panel system is around £6,100. The final price will depend on factors such as system size, roof access, equipment, and the type of property.

The return will also vary from one property to another. It depends on how much electricity is used, how the property is let, and how the system is set up. Landlords should think about:

• Current electricity costs
• Tenant usage patterns
• Bill-inclusive rent arrangements
• Available roof space
• System size
• Battery storage options
• Export payments
• EPC goals
• Long-term plans for the property

There are also tax considerations. Until 31 March 2027, some residential energy-saving installations qualify for 0% VAT. After that, the rate is expected to return to 5%.

Do landlords need tenant permission for solar panels?

In most cases, landlords are responsible for making improvements to the property. Even so, keeping tenants informed is a sensible step when planning a solar installation.

It’s good practice to explain:

• What work will take place
• How long it's likely to take
• Any access requirements
• How the system may affect electricity use
• Any changes to billing arrangements
• Who will receive any export payments

Clear communication helps avoid confusion, particularly in occupied properties.

It’s also worth reviewing tenancy agreements and metering arrangements at this stage. This matters most where tenants pay bills directly or where export payments are linked to the named electricity account holder.

How SGS Energy helps landlords boost rental income with solar panels

As we've seen throughout this blog post, solar panels can improve a rental property's performance. However, the outcome depends on how well the system fits the property. Factors like energy usage, tenancy type, and long-term plans all influence the return.

That’s where a tailored approach makes a difference. A system designed to align with how a property is used is more likely to deliver consistent savings.

SGS Energy works with landlords, HMO owners, developers, and property investors across Kent and the surrounding areas to do exactly that.

Get in touch with SGS Energy to see how solar panels for landlords could support your rental income.

FAQs

Can landlords install solar panels on rental properties?

Yes, landlords can install solar panels on the rental properties they own. However, this is subject to the right property checks, permissions, grid requirements, and tenancy considerations. Listed buildings, flats, and properties in conservation areas may need extra checks before installation.

Do solar panels increase rental income?

Solar panels can help increase net rental income by reducing electricity costs, supporting a rent premium, attracting tenants, reducing void periods, and creating export income through the Smart Export Guarantee.

Are solar panels worth it for HMO landlords?

Solar panels can be particularly useful for HMO landlords because HMOs often have higher electricity usage. If bills are included in the rent, solar panels can reduce the landlord’s monthly costs, improving margins.

Can tenants benefit from solar panels?

Yes, tenants may benefit from lower electricity bills. However, this depends on the billing setup and how much solar electricity they use.

Can landlords sell excess solar electricity?

Landlords may receive export payments through the Smart Export Guarantee. But that's providing that the system and account setup meet the relevant criteria.

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