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Considerations When You Sell a Home With Solar Panels

By Bill Gassett | March 19, 2023

Fitting solar panels is an eco-friendly option if you want to save on your energy bills. A 30% tax credit is available to homeowners to make this easier.

As well as these advantages, a solar power system has the potential to increase the value of your home and can make the home more attractive to buyers. Whether solar panels add value to a house depends on a few factors.

It is essential for buyers and sellers to know them. For example, having solar panels on the front of your home may negate a substantial amount of value added. Nobody wants to look at a feature that makes a property less visually appealing.

Don't automatically assume you can tack on thousands of dollars to your asking price - despite what all solar companies tell you. As a real estate agent in the business for thirty-seven years, I can tell you that is untrue.

While there are distinct advantages in some areas, in others, there are not. Selling a house with solar panels might not be as straightforward as other homes. You should never assume the value added will be the same in your location vs. another.

We will look at the challenges you might face when you sell a house with solar panels.

Selling House With Solar Panels 1

Is it More Difficult to Sell a Home with Solar Panels?

In some areas of the country, sellers find that homes will solar energy systems typically spend less time on the market and are more likely to receive offers above the asking price.

In others, it is not the case. Remember, all real estate is local. It could be a great time to sell your house where you're located and not somewhere else.

The type of home can also influence the viability of solar. For example, selling a luxury home with solar panels on the front of the roof will be more challenging.

Picture a stunning luxury home with every imaginative detail. Now picture it with a solar panel system adorned above the front door. Does that sound appealing? Probably not. Many luxury home buyers would agree.

They are more concerned about the property's grandeur than saving some money on their utility bills.

While there is more demand for homes with solar panels, there are still some potential issues when selling.

Possible Issues When Selling a Home with Solar Panels

There are different ways of financing solar installation in your home, but they can create potential problems when you are ready to sell.

Let’s look at some ways to buy solar energy systems and the other issues that could make finding a buyer more difficult.

Solar Leases

If you don’t have the funds to pay for your installation outright, a solar lease or power purchase agreement (PPA) could be the answer.

A solar lease means paying a flat monthly fee to the solar company that provides and installs the system. A power purchase agreement involves paying a fixed amount per kilowatt hour of electricity generated and paying for your use of the equipment.

With either option, you should generate electricity more cheaply than the utility company would normally be billed, even after paying for installation.

When selling your home, you don’t own the solar equipment, which isn’t added to your home's value. When you sell before the agreement or lease runs out, how it is handled must be negotiated with the buyer. Your options could include the following:

  • Prepaying the contract. The seller can pay the remaining fees due in the contract. The buyer would still be required to follow the contract but not pay the fees.
  • The buyer takes over the contract. The buyer could continue with the contract and payments.
  • Purchasing the panels. The seller could buy the solar energy system, adding to the home's value.

Solar Loans

You could finance your solar power with a loan. This could mean the solar supplier putting a lien on the title until the loan is repaid.

When selling, you will probably need to deal with the lien, which means paying off the loan. Mortgage lenders won’t want to see a lien on the title, which could risk property ownership.

However, you could sell your home for more since you own the solar energy system.

Limited Knowledge

With solar installations still being relatively new, buyers and even real estate agents might not understand as much as they need to. Understanding how much solar energy adds to the value of a home can be difficult. Comparable sales with solar panels will certainly help, but you might need to wait for the right buyer.

Buyers won’t know how much can be saved on energy bills. Utility bills can be shared to show the savings. Buyers might also be concerned about how long before the panels need to be replaced. If you have a warranty, this should reassure a buyer.

Being Too Negative

As a buyer, it is easy to be too negative about solar energy. While the upfront costs are large and the payback time lengthy, this isn’t a direct cost for the buyer. Though they may have paid more for the home, the savings on power should make their investment pay off sooner.

A home with a solar energy system is a definite selling point that should be emphasized and not diminished.

Final Thoughts on Selling a House With Solar Panels

Solar panels are something buyers are increasingly looking for. It should mean your home spends less time on the market and sells for more. But some challenges could make selling your home more difficult.

Depending on how you finance the solar panel installation, there could be more issues when selling. There will often be situations where a lack of information about solar makes selling more difficult as well. But if you know about these potential issues, you will be ready to deal with them and sell your home.

Bill Gassett is an authority in the real estate industry with 38 years of experience. Bill is well respected for his informative articles for buyers, sellers, and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, the National Association of Realtors, Inman News, Newsbreak, Credit Sesame, Realty Biz News, and his own authoritative resource, Maximum Real Estate Exposure. He has been on of the top RE/MAX agents in New England over the last two decades.
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