Selling a house with solar panels: Property value, solar lease transfers and more
Published on July 17, 2019 by Aditya Gautam
Last updated on August 26, 2019
4 minutes read
If you're among the many people considering buying or selling a house with solar panels, then you must be wondering: do solar panels increase the value of a home?
Here's everything you need to know about buying or selling a house with solar.
Do homes with solar sell for more?
Installing solar panels doesn't just save you money through reduced energy bills. It can also put more money in your pocket when you sell your home!
Research conducted by Lawrence Berkeley National Laboratory found that a standard solar panel system (3.6 kilowatts) can add about $15,000 to the value of a house. Another study, conducted by Zillow, found that on average, homes with solar systems sold for 4.1% more than similar homes without solar panels.
It's something that more and more buyers are looking for in the market, and a feature that home appraisers make note of when assessing your property.
If you are selling your property, then make sure you mention solar panels in your home's listing and in negotiations with buyers. The fact that your home can produce its own electricity will allow you to increase your asking price. However, it's how well you sell the panels that will bring buyers up to your purchase expectations.
However, things change if your panels are leased. Read on.
Selling or buying a house with leased solar panels
Selling a home with panels that are paid for is both easier and more profitable. However, If you have a lease on the solar panel, don’t fret, selling a house is still possible.
The Berkeley Lab analyzed data from home sales in South California and found solar leases had little to no impact on house sales.
A house with a solar panel lease can be sold or bought in the following ways:
1. The seller pays off the lease then sells the house; simple
The seller could pay off the remaining lease amount on their solar panels before selling. This will make the transaction much simpler and the amount paid can easily be recovered by adding the value of the panels to the final payout figure of the house.
2. The remaining lease amount on the solar panels is included in the payout figure for the house
Doing this will ensure that the buyer gets full ownership of the solar panels along with the house. This option comes in handy when, for whatever reason, it's difficult to transfer the solar lease from the seller to the buyer’s name.
3. The seller transfers the solar panel lease to the new owners
This process can get a little tricky, just because the terms and conditions of the lease might change when the lease is transferred. A lot depends on the new owner's credit ratings and also the terms and conditions of the solar company you have a lease with.
One needs to ensure that the buyer understands the implications of taking the lease off your hands. Share how your experience has been so far, but don’t make any guarantees. In most cases, a solar panel transfer goes through without any hassle.
Buyers expect a running record when buying a home with solar energy
Whether you're handing off a lease or selling a home with solar panels that you own, you need to keep a detailed record of the panels. If you don't have this already, you have a bit of backtracking to do.
Buyers are going to ask for a detailed record of all the maintenance that has been done on the panels. They may also want to learn more about how the panels work and they might even ask to see how your electric bills have improved.
This may seem like a little much, but it's the due diligence that a person should take when buying a home with solar panels. If you're prepared to answer these questions as a seller, the process will go much smoother for both of you.
Sell the house and you will sell the solar panels
Keep in mind that there's much more to the selling process than just selling the added benefit of solar panels. You still have to go through all the traditional steps of selling a house! This includes:
- Researching the average price of homes in your market
- Making any necessary improvements to the home's functions/aesthetics
- Marketing the listing
- Staging the house for viewings
The more you put into every single step of the process, the better your outcome will be. You can't ride on the fact that you have solar panels to make your home appealing. Highlight the other features your house has to offer and make the buyers feel like they're really getting the full package.
You need to hire a realtor
The final tip to keep in mind is that you absolutely need a realtor. Selling any house is complicated enough. However, having a realtor by your side means that you are more likely to get the best deal for your home with solar panels.
This person will protect your interests as you figure out all the ins and outs of your panels' — and your home’s — true worth. They'll be able to talk buyers into considering a solar panel lease if need be, and they also know how to present the added cost of solar panels as a valuable investment.
You can choose to go through this process alone if you'd like. But you'll be facing some tough decisions and have a lot to handle if you do so. The better option is to go the professional route and hire a realtor. If you can, find someone who has experience selling homes with solar panels!
A final word on buying or selling a house with solar panels
Solar panels are no longer a fringe technology. America now has 2 million homes with solar panels installed on them. This figure is expected to rise to 4 million over the next couple of years. The real estate market is filled with homes that have solar panels installed.
Buying and selling homes with solar panels is only getting easier and more sought after every day.
If you are someone who has been holding back on getting solar panels because you are not sure how long you will be in the property, don’t let that stop you from harvesting the sun’s energy, saving money and helping the environment.
You don’t need to stay in the same property for the life of the panels (over 20 years) to get the most out of the investment. Especially with the 30% tax credit being offered on solar panels in 2019.
For more insights on the pros and cons of solar power in 2019, click here.