Solar panels can add thousands of dollars to the sale price of your home, like updated kitchens and baths. Two recent studies found that selling a house with solar panels could net around $15,000 more than similar homes without solar.
Homebuyers, in general, view the panels as upgrades. In their minds, there are long-term fiscal and environmental reasons to pay more for solar.
But it doesn’t take much of a search to find out that not all setups are the same or attractive to buyers.
In the following article, we’ll discuss the dos and don’ts of selling a house with financed panels or owned panels and how you can benefit.
Solar Basics
The technology behind home solar power generation has gotten cheaper, more productive, and popular in the last dozen years. As a result, it’s no longer an oddity to find homes in your area with panels on their roofs.
If you’re wondering how these systems work, it’s relatively simple. First, photons from the sun strike the photovoltaic cells of the panel and free electrons. These electron particles become alternating current (AC) which is then converted by an inverter to power suitable to your home, direct current (DC).
Once converted by the inverter, often as part of each individual panel, the power flows to a battery and a meter. This meter connects your home to the bigger power grid, and the battery is there to help store some of the excess energy for when the sun goes down.
When you generate more power than you use, your meter actually runs backward as the energy flows into the power grid. This is called net metering. Often, power companies will issue credits for the excess power generated.
Pros and Cons
For homebuyers, the selling points for solar include reduced electric bills, a buffer against rising power prices, it’s environmentally friendly, and it promotes energy independence.
The cons, however, are the high upfront or long-term costs. In addition, the sun is an intermittent energy source, and these products require significant roof space and some upkeep.
Lastly, the solar lease when selling a house can be a big sticking point.
Did You Buy or Lease?
There are no two ways about it; if you can afford to buy your solar installation outright, you should. Leasing or financing panels may not be a deal-breaker for a buyer but owning is a sure way to profit.
First, you pocket all the tax credits for installation and net metering benefits without a middle man. Secondly, you get to take advantage of all the power you can generate or store.
Most importantly, you don’t have to explain to a prospective buyer why they should sign the same contract you did to get your solar panels installed. If you own the system outright, you pass on all your benefits to the next owner.
Potential Pitfalls
Selling a house with financed panels has two possible issues: the company and the contract. While the popularity of solar has boomed, companies offering long-term solar panels have mushroomed.
Some of these companies’ end game is to lock you into a long-term contract and gouge you each month for the price of the panels. So the company acts as another utility, but their power plant is located on the top of your home.
This doesn’t mean that you won’t get a bill from the power company on top of your solar provider’s bill. It only means it will be slightly less in a lot of cases.
Since these companies have sprung up seemingly overnight, they often don’t employ knowledgeable sales reps or reliable installers. Unfortunately, this can mean you can get sold a load of promises and receive a poorly installed product.
Also, the leasing company may have a big say as to what goes on on your roof. You may need to contact them if your roof or the panels need repair. Furthermore, many contracts restrict your ability to take the panels with you if you sell the house.
Relocating the panels and the metering gear either is outright prohibited or comes at a cost prohibitive to execution.
Do Your Research
However, many solar installation and leasing companies are great partners in home power generation. All you need to do is conduct some research into the contract and the company.
First, check to see if the company gets good reviews for customer service. Next, check with your state’s better business bureau or attorney general to see if the company has lawsuits weighing against it.
Put Yourself in the Buyer’s Shoes
Selling a house with owned solar panels is simple. You can even take the panels with you if you specify them in the listing.
But if you lease, you should be ready for some skeptical questions about the lease agreement that you’ll be asking the new buyers to take over.
Try to understand that the buyer may want your property but not care about solar power. Also, a new homebuyer may be looking to make upgrades to the property, so adding another expense to the monthly price of the home may not be something they want to take on.
Look to Negotiate
A hot housing market means that sellers have had plenty of suitors for their properties. This means that if a prospective buyer gets cold feet overtaking on a long-term solar panel lease, there is a good chance that another bidder won’t.
But if you are running into some resistance, try assuaging the prospective buyer’s apprehension by reducing the asking price equivalent to a few months of the cost of the solar panels. This is one way for the buyer to get a sense of the monthly cost of the lease and reduce their initial expenses.
Selling a House with Solar Panels Is Possible
Whether you lease or own, selling a house with solar panels is as simple as finding the right buyer. And in this housing market and age of environmental self-awareness, there are many of them out there.
When selling your home, make sure to represent your solar panels accurately. Also, there’s no shame in negotiating if the buyer is nervous about taking on a new lease with a company they have no choice but to work with.
Do you have more questions about solar power or home solar installation? Contact us today to learn more.
