Do solar panels increase housing rents in Australia?

Abstract

Greater uptake of solar panels on rental housing would have implications for housing affordability and would reduce greenhouse gas emissions. The influence of energy investments on housing values has been widely studied, with past research often finding a positive relationship. However, there is missing knowledge for the specific relationship between solar panels and housing rents. This study finds that Australian renters with solar panels pay approximately A$19 more in weekly housing rents than non-solar renters. The results suggest that landlords have been able to benefit from investments in solar panels through higher rent, with a payback period of around 5 years. The study provides context for policymakers across the world considering subsidies for solar panels on rental housing. The findings are robust across multiple methods including entropy balancing and are based on two large Australian household surveys.

Supplemental data for this article is available online at https://doi.org/10.1080/02673037.2021.2004094 .

Keywords:

• Solar
• housing rents
• landlord
• asset
• entropy balancing

Acknowledgements

We thank the editor and reviewers for advice that improved the paper. There is no specific funding to declare.

Disclosure statement

There are no conflicts of interest to declare.

Data availability statement

The Stata code is available for inclusion as Supplemental material. The data can be accessed by authorized users following application to the Australian Bureau of Statistics.

Additional information

Notes on contributors

Rohan Best

Rohan Best is a Senior Lecturer at the Macquarie Business School, Macquarie University. His work focuses on energy economics, including the effects of housing tenure on social and economic outcomes.

Ryan Esplin

Ryan Esplin is an economist at the Australian Energy Market Commission (AEMC). Views in this paper do not necessarily reflect views of the AEMC.

Mara Hammerle

Mara Hammerle is a PhD scholar at the Australian National University.

Rabindra Nepal

Rabindra Nepal is a Senior Lecturer at the University of Wollongong.

Zac Reynolds

Zac Reynolds is a PhD scholar at Macquarie University.