Australia has one of the highest rooftop solar adoption rates in the world. Yet a huge part of the housing market has barely participated in that transition: rental homes.
For years, the problem has been simple. Landlords pay for the solar system, but tenants are the ones who benefit from lower electricity bills. That mismatch has slowed solar uptake across rental properties, leaving many tenants exposed to rising energy costs.
Queensland’s (QLD) new solar rebate for rental homes is an attempt to change that. By helping landlords cover part of the upfront cost of installing solar, the scheme aims to unlock a part of the market that rooftop solar has largely missed.
QLD has around 1.8 million rental households, many of them facing the same rising electricity prices as homeowners but without access to rooftop solar. That makes rental housing one of the largest untapped opportunities in Australia’s clean energy transition.
If policies like this gain traction, the next wave of solar installations may not come from owner-occupied homes. It could come from investment properties.
What is QLD’s Solar for Renters scheme?
The QLD government has introduced a new incentive designed to encourage solar installations on rental properties.
Under the program, eligible landlords can receive a rebate of up to $3,500 when installing rooftop solar on a rental home. The goal is to reduce the upfront cost barrier that has historically discouraged many property owners from adding solar to investment properties.
Funding for the scheme is expected to support solar installations on thousands of rental homes across the state, helping tenants gain access to lower electricity costs while expanding solar adoption beyond owner-occupied housing.
To qualify, the property must meet several conditions:
- The home must be located in QLD
- The home must already be rented or available for rent
- The home must not have an existing solar system
The rebate is generally limited to properties renting below a certain weekly threshold, which is intended to prioritise homes in the mainstream rental market.
Landlords can apply for the rebate on multiple rental properties, although limits apply to the number of claims per owner. For tenants, the benefit is indirect but potentially meaningful. While the landlord owns the solar system, households living in the property may be able to use solar electricity during the day, helping reduce their reliance on grid power.
Why renters have historically missed out on solar
Rooftop solar adoption in Australia has largely been concentrated among homeowners. Rental properties have remained one of the biggest gaps in the solar market.
The reason comes down to what energy economists call the “split incentive” problem. In most cases, the landlord pays for the solar installation. The tenant, however, is the one who benefits from lower electricity bills. That mismatch has traditionally made solar a difficult investment decision for many landlords.
Even when property owners support renewable energy, the financial return is not always obvious. Unlike owner-occupiers, landlords do not directly experience the electricity savings generated by the system. As a result, many rental homes still operate without solar despite strong solar uptake in owner-occupied housing.
Policies like QLD’s new rebate are designed to reduce that barrier. By lowering the upfront cost of installation, the scheme attempts to make solar a more practical upgrade for investment properties. If similar programs expand across other states, rental housing could become one of the next major areas of growth for rooftop solar.
Does installing solar make financial sense for landlords?
The key question really here is whether installing solar on a rental property is financially worthwhile.
A typical 6.6 kW rooftop solar system in QLD often costs around $6,000 to $8,000, depending on equipment quality and installation conditions. With the new rebate covering up to $3,500, the remaining upfront cost for landlords could drop to roughly $2,500 to $4,500. While tenants benefit directly from the electricity savings, landlords may still see indirect financial advantages.
Solar can make a property more attractive to prospective tenants, particularly as energy costs continue to rise. Homes with lower expected power bills may stand out in competitive rental markets.
Some landlords may also see value in future-proofing their properties. Energy efficiency features are becoming more important in housing standards, and solar is increasingly viewed as a normal part of modern homes rather than a niche upgrade.
As for investment properties held over the long term, solar may also contribute to property value and market appeal, especially as buyers and tenants become more conscious of energy costs. In this sense, the new rebate may shift solar from being a purely environmental upgrade to a practical investment consideration for landlords.
Why rental housing could become the next solar growth market
As the solar market matures, the next area of potential growth is increasingly clear: rental housing. Programs like QLD’s solar rebate for rental properties are designed to fill the gap in many rental properties today that still do not have solar systems. By lowering the upfront cost for landlords, these incentives attempt to unlock solar adoption in homes where installation decisions are typically more complex.
If policies like this prove effective, they could encourage similar initiatives in other states. Over time, that could expand solar access to a much larger share of households while helping accelerate the transition toward distributed renewable energy.
For tenants, the impact could be lower daytime electricity costs. For the broader energy market, rental housing may represent one of the next major opportunities for rooftop solar growth in the country.
What this could mean for the future of solar
QLD’s solar rebate for rental properties is a relatively small program in the context of AU’s overall solar market. Yet it addresses one of the longest-standing gaps in rooftop solar adoption.
For years, renters have largely been excluded from the benefits of rooftop solar, even as installation rates surged among homeowners. Incentives aimed at landlords could begin to change that dynamic by making solar a more practical upgrade for investment properties.
Whether the scheme leads to widespread adoption will depend on how many landlords take advantage of the rebate and how the rental market responds. If uptake is strong, similar programs could appear in other states.
What is clear is that rental housing represents a large, largely untapped part of AU’s solar potential. Bringing those homes into the rooftop solar transition could play an important role in the next phase of clean energy growth.
Energy Matters has been in the solar industry since 2005 and has helped over 40,000 Australian households in their journey to energy independence.
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