Selling a home fitted with solar panels can present both unique hurdles and advantages. Every homeowner has their reasons to sell, but the addition of solar panels to your property can mix things up a bit. On one hand, these green energy sources can boost your home's value. On the other, they might add a few twists and turns to the sales process.
But don’t worry, this guide has got your back. By the time you finish reading, you’ll be well-versed in the subtle art of selling a home that boasts solar panels.
General Tips
With the popularity of solar power systems spreading like wildfire across the globe, prices of solar panels have decreased with the increase in their efficiency. Consequently, the demand for solar-powered homes is at an all-time high.
Financial Benefits
Tell your buyers about the immediate and long-term savings they can get with solar panels to attract customers. Although the initial price is high, the savings easily offset that cost. Talk to buyers about:
Net Metering:
Excess electricity can be sold to the grid for net metering credit from the utility company (if available).
Decreased Energy Bills:
Since you won’t be taking as much electricity from the grid as you used to, you will see a smaller electricity bill.
Immunity Against Elevated Energy Costs:
A solar power system can keep you safe from the annual rise in electricity rates.
Improved Home Value:
Statistics say that solar panels improve home values by 4.1% on average, and such savings increase over time.
Environmental Advantages
An eco-friendly choice, solar panels give you renewable, clean, and emission-free electricity. They also contribute to:
Reduced Waste:
They are durable, can last more than 25 years, need no upkeep, and negligible cleaning. Furthermore, they can be recycled too.
Decreased Air Pollution:
Creating clean energy doesn’t introduce harmful gases into the atmosphere, making solar energy the epitome of renewables.
Lowered Carbon Emissions:
With solar, you will be free from fossil fuels, dangerous emissions of greenhouse gases, and pollution in general, decreasing your carbon footprint.
Service Agreements And Warranties
If someone is buying a house with solar panels from you, you should talk to them directly about all the warranties, contracts, and service agreements in a clear manner. Automatically transferable warranties include:
- Workmanship warranty (10-year).
- Performance warranty (manufacturer's warranty).
- Panel product warranty (manufacturer's warranty).
- Penetration warranty (5-year).
- Inverter warranty (manufacturer's warranty).
Performing Appraisal
Getting a good home assessment adds to that property's value. Contact a good appraiser or real estate agent who has experience in selling homes with solar panels. Look out for the following valuations in that agent or appraiser:
Market-based Valuation:
Comparing and valuing a home based on the impact of the system on the home's value with homes without a solar system.
Income-based Valuation:
Predicts the income the solar system will generate for the owner over its remaining lifespan.
Cost-based Valuation:
Calculates the cost of building the same solar system with the same quality as home-based materials.
Is Selling Easy?
Solar panels surely add value to your home, but selling them can be easy and hard at different times in different situations.
Why Easy?
Eco-friendly:
Reduced greenhouse emissions are a huge green flag for eco-conscious buyers.
Financial Perks:
Lowered energy bills and net metering save a lot of money for any homebuyer, especially if they consume less energy than the system produces.
Little Upkeep:
Solar panels are sturdy and durable, so they don’t need much cleaning or maintenance.
Well-known:
With the high demand for solar panels, buyers are willing to pay more for homes with solar panels.
Why Hard?
Solar Lease:
If you do not own a home and have a solar lease, buyers might not want that home. This is because the solar panel system remains the property of the solar installer in a solar lease. The lease transferring process is also hard and complex.
Valuation Troubles:
Low-quality appraisals might turn off buyers initially willing to buy your home, especially if your home's price is higher than homes with a similar build.
Seller Issues:
Have the appropriate documents ready so the selling process can go smoothly, otherwise, it will be a hassle, and you might lose out on that potential extra value.
Agent Hesitation:
Inexperienced agents might misunderstand or miscommunicate the benefits of solar energy, which can scare away potential buyers.
Buyer Hesitation:
Buyers might not know about a solar energy system's advantages, so they may be worried about maintenance.
Selling With Owned Solar Panels
This is the most favourable scenario for selling your home. You won’t be transferring solar panel ownership or requiring multi-party solutions. Homebuyers might even be more willing to pay extra money for a home with owned solar panels.
Selling With Solar Loans
A lending institution will assist you in transferring the solar loan to the new homeowner. You would need to clear your loan if you bought the financed solar panels using a secured loan. However, if you purchased the solar system using an unsecured loan, you can sell your property before clearing the loan.
Selling With A Solar Lease
This is a huge liability since you don't own the solar panels, but your solar company does. You will need to transfer the solar lease and sell your house simultaneously. You can either transfer the lease to a potential homebuyer and take over the payments or purchase the remaining lease payments. This will be difficult but not impossible. The best way to do this is to have transparent negotiations between the solar company, the seller, the real estate agent, and the buyer.
Selling With A Solar PPA
PPA, also known as Power Purchase Agreement, is similar to a solar lease. In this, the homeowner uses the electricity generated by the solar panels, which are owned by the solar installer. Selling with PPA is pretty similar to a solar lease. You will need to transfer the solar PPA to the buyer and sell the house simultaneously.
Transferring Solar Panels To A New Home
It is challenging to remove and transport solar panels. Moreover, there is an increased chance of damaging your roof or solar panel. This damage will offset any savings you made or were planning to make with the solar panels since all the money would go into repairs.
Another point to note here is that the current solar panel was designed for your previous roof and the specific energy requirement for your last home. Installing it on a new home's roof might result in poor electricity production.
Final Points
While buying a home and installing solar panels is easy, selling the same house is incredibly confusing. However, with this guide, you will rest easy knowing that you know all there is to know about selling a home with solar panels, whether fully owned, on a solar loan, a solar lease, or a PPA. Knowing this will help you pitch your sale to potential buyers and save money.