Solar Energy System adoption in homes is rapidly growing due to several key factors. Advancements in solar technology have led to more efficient and durable panels, making solar power more reliable and adaptable.
According to the “Solar Industries Association” from January to March 2023, the US solar power industry set up enough new solar panel installations to produce 6.1 gigawatts of electricity. That’s a lot more, 47% more than at the same time in 2022.
Several key factors are driving this interest in residential solar energy. Firstly, the cost of solar panels is dropping due to technological advances, making it more affordable for homeowners. Secondly, financial incentives like a federal solar tax credit and rebates from many states further reduce the cost.
Additionally, solar panels allow homeowners to generate their own electricity, making them less reliant on the grid and safeguarding them from rising energy prices. They can even sell any extra energy back to the grid.
As people become more conscious of their environmental footprint, residential solar energy emerges as a straightforward and effective sustainable solution. This growing environmental consciousness, coupled with the potential for protection from volatile energy costs and the ability to generate income from surplus energy, has led to a surge in homeowners’ interest in installing solar panels.
The National Association of Realtors’ 2022 Survey of Home Buyers and Home Sellers revealed that while only 15% of home buyers considered solar panels an important feature, a significant 80% emphasized the importance of heating and cooling costs. This highlights an opportunity for sellers to educate potential buyers about the long-term financial benefits of solar panels in reducing utility costs. By showcasing the potential savings on electricity bills and emphasizing the positive impact on monthly expenses, sellers can help buyers see the value and appeal of solar energy systems as a wise investment for their future.
Future value is another important aspect of selling solar homes. The Lawrence Berkeley National Laboratory research indicates solar-powered homes increase the value of your home, it’s essential to recognize that installing solar panels doesn’t guarantee an automatic increase in property value. The impact on the value of a home can vary depending on many factors.
It’s important to remember that how you get your solar panels—whether you buy them outright, lease them, or go with a power purchase agreement—can make a big difference when it’s time to sell your house.
If you own your panels, it could give your home’s value a nice little boost. But if you’re leasing your panels or have a power purchase agreement, things might get a bit tricky with potential buyers. When deciding how to go solar, consider how each option might affect you in the long run, especially if selling your home is in the cards for the future.
Here are the most common ways to get solar for your house; each has its own set of advantages and considerations:
Purchase Solar Panels Outright: This option involves buying the solar panels directly, either with savings or through a loan. You’re the outright owner, which allows you to benefit from all the energy savings and federal tax credits and potentially increase your home’s resale value. However, you’re also responsible for maintenance and repairs.
Solar Loans: Like outright purchasing, a solar loan allows homeowners to own solar panels. This option is beneficial if you want to own the system but don’t have immediate funds. You can pay off the loan over time, often with payments that are less than your current electric bill. Like an outright purchase, you’re eligible for federal tax credits.
Solar Lease/Power Purchase Agreement (PPA): In a leased solar panel system or solar PPA, you agree to have a company install solar panels on your roof. The company owns and maintains the panels, and you make predetermined monthly lease payments. The rate is typically lower than the rate charged by a utility company. You don’t get the tax credits, but you also don’t have to worry about maintenance or upfront costs. This arrangement can pose certain challenges when it’s time to sell, mainly because the solar agreement is tied to the property, not the homeowner.
Solar Energy Purchase Agreement (SEPA): Similar to a PPA, a SEPA involves a solar provider installing and maintaining a solar panel system on your property. You agree to purchase the solar energy produced by the system at a set price. This contract lasts a set number of years and often includes an option to purchase the system at the end of the term. Like a PPA, the SEPA can cause problems when it’s time to sell.
Community or Shared Solar: This is a good option for those who can’t or don’t want to install panels on their property. You buy a share in a community solar project and receive credits on your energy bills for the power your share produces. Like Solar Leases/PPAs, the new homeowner must agree to take over the shared solar agreement. It can complicate the sale if they’re not interested or can’t meet the solar company’s requirements.
Knowing which of these arrangements you have for your solar system is important. Each requires a different approach when it’s time to sell your house.
Many potential homebuyers still feel uneasy about solar panels due to uncertainties around financing and maintenance. In this part of the article, we aim to simplify this. Home sellers and listing agents are key in clarifying solar panel ownership and care for buyers. We’re here to help make your solar home appealing and understandable for the right buyer.
You can typically take one of two paths when selling a home with leased solar panels.
The first option involves the buyer assuming the solar lease agreement. This transition must be coordinated with the leasing company and the buyer, who must qualify based on their credit.
The advantage of this approach is that it allows the homeowner to pass on the benefits of the solar lease, including lower energy costs, without any additional expenditure. However, some buyers may be hesitant about taking on a lease agreement, so it’s important to communicate the benefits clearly.
The second option is to pay off the solar lease at the time of closing, using funds from the sale of the home. This removes the complication of the lease from the negotiation process and can be more attractive to prospective buyers. However, the payoff amount could be substantial depending on the terms of your lease, so it’s essential to consider how this would impact the net proceeds from your home sale. Always consult with a real estate professional familiar with solar leases to ensure you’re making the best decision for your situation.
There are a few key steps to follow when selling a home with a Community or Shared Solar arrangement.
Contact the Shared Solar Program Provider: The first step involves reaching out to the community solar program provider. Discuss your plans of selling and understand what options exist for transferring your solar share to the new owner..
Understand the Agreement: It’s crucial to comprehend the terms of your agreement. Some programs may allow the transfer of the solar panel share to the new homeowner, while others might require you to sell your share back to the program or another community member.
Discuss with Your Real Estate Agent: Ensure that your real estate agent is aware of the community solar share and fully understands its implications on the home sale. They need to be prepared to explain this unique setup to potential buyers.
Include in Home Listing: The shared solar agreement should be included in the home listing. Potential buyers should be aware that the home is part of a community solar project. This might be an attractive selling point for some buyers interested in renewable energy but are willing to install panels on their home.
Homebuyer Agreement: If the buyer is interested in taking over the solar share, they may need to agree to the terms of the community solar program and possibly even apply to the program themselves. This should be handled in advance of the sale to ensure a smooth transition.
Legal Consultation: Depending on the complexity of the shared solar agreement, it might be advisable to consult with a real estate attorney to ensure all legal bases are covered and the interests of all parties are protected.
Remember, each community solar program has unique rules and regulations. Refer to your specific agreement and consult the program provider for the most accurate information.
When selling a home with a Solar Energy Purchase Agreement (SEPA), homebuyers should consider the following steps:
Review the SEPA Contract: Carefully examine the terms and conditions of the SEPA contract. Understand the duration, pricing, and any other obligations or restrictions the agreement outlines.
Contact the Solar Provider: Reach out to the solar provider to discuss the sale and determine available options. Inquire about the possibility of transferring the SEPA to the new buyer or exploring other alternatives.
Inform Your Real Estate Agent: Make sure your real estate agent knows the SEPA and its implications on the home sale. They need to understand how to effectively communicate this arrangement to potential buyers.
Include SEPA Details in the Listing: Highlight the SEPA in the home listing to provide transparency to potential buyers. Clearly explain the benefits and savings associated with the solar energy purchase agreement.
Educate Potential Buyers: Be prepared to educate potential buyers about the SEPA and its advantages. Share information on the locked-in energy rates, potential savings, and the environmental benefits of clean energy, and solar.
Coordinate the Transfer Process: If the new homeowner wishes to assume the SEPA, work closely with the solar provider to facilitate a smooth transfer of the agreement. Ensure that all necessary documentation is completed and submitted in a timely manner.
Consider Legal Consultation: If any complex aspects or legal considerations are related to the SEPA, consulting with a real estate attorney may be wise to ensure a smooth and legally compliant transaction.
When selling a home with leased solar panels, several key steps are involved in the process:
Review the Lease Agreement: Begin by carefully reviewing the terms and conditions of the solar lease agreement. Understand the duration, monthly payments, and any transfer or buyout provisions outlined in the contract.
Contact the Solar Leasing Company: Reach out to the solar leasing company to inform them of your intention to sell the property. Inquire about their procedures for transferring the lease to the new homeowner or explore potential options for prepaying or buying out the lease.
Inform Your Real Estate Agent: Make sure your real estate agent is aware of the leased solar panels and understands the implications for the home sale. They can help communicate this information to potential buyers effectively.
Talk to Your Lender: It’s important to ensure buyers talk to any mortgage lenders they are working with. Leasing panels can impact qualifying ratios, and in some cases, this could make it difficult or impossible for the buyer to get their loan
Include Lease Details in the Listing: Clearly mention the leased solar panels in your home listing to provide transparency to potential buyers. Highlight the benefits associated with the leased solar system, such as reduced energy costs, environmental sustainability, and a reduced carbon footprint.
Educate Potential Buyers: Be prepared to educate potential buyers about the leased solar panels. Explain how the lease works, the financial obligations, and the potential savings in energy costs. Please provide them with any relevant documentation or information provided by the leasing company.
Coordinate the Lease Transfer or Buyout: If the buyer is interested in assuming the solar lease, work closely with the leasing company to facilitate the transfer process. Ensure that all necessary paperwork and requirements are fulfilled. Alternatively, if the buyer prefers not to assume the lease, explore options for prepaying or buying out the lease, if feasible.
Legal Considerations: Depending on the complexity of the lease agreement, it may be advisable to consult with a real estate attorney to ensure all legal aspects are handled appropriately and protect the interests of all parties involved.
This is the easiest scenario when it comes to selling a house. The home seller still needs to take a few important steps:
Gather Documentation: Collect all relevant documentation about the solar panel system, including purchase contracts, warranties, permits, and any maintenance records. This information will help potential buyers understand the system’s history and performance.
Assess the Solar Panel System: Evaluate the condition and efficiency of the solar panels. Consider scheduling a maintenance check or inspection to ensure everything is in proper working order. The buyer will most likely have the panels inspected during their property inspection. It’s better to find out about any problems before the buyer does.
Determine the Value: Determine the value of the solar panel system. Research the current market value of similar systems and consider consulting with solar energy professionals to assess the system’s worth. This information will help you determine a fair price for the home.
Highlight the Benefits: Emphasize the advantages of owning a home with solar panels in your listing and marketing materials. Showcase the potential savings on utility bills, the environmental benefits, and any available tax incentives or rebates.
Disclose Information: Provide full disclosure about the solar panel system to potential buyers. Include details such as the system’s age, capacity, warranties, and any related financing arrangements. Transparent communication builds trust with potential buyers.
Collaborate with Your Real Estate Agent: Work closely with your real estate agent, ensuring they comprehensively understand the solar panel system and its value. They can effectively communicate these details to potential buyers and address any questions or concerns.
Facilitate Buyer Due Diligence: Allow interested buyers to conduct their due diligence on the solar panel system. Provide access to any relevant documentation, offer opportunities for inspections or consultations with solar experts, and be responsive to any inquiries they may have.
Transfer Ownership and Coordinate Installers: Work with the buyer’s agent and any necessary third parties to smoothly transfer ownership of the solar panel system. Coordinate with installers or technicians as required to update ownership information and ensure a seamless transition.
Update Utility Accounts: Inform your utility company about the change in solar panel ownership and arrange for the new homeowner to assume responsibility for any net metering or utility interconnection agreements.
When selling a home with solar panels, it’s important for sellers to be aware of the steps involved and communicate effectively with potential buyers. Whether the solar panels are owned, leased, or part of a community/shared solar arrangement, sellers should gather necessary documentation, assess the system’s condition, determine its value, and highlight the benefits in their listings.
Collaborating with a knowledgeable real estate agent and facilitating buyer due diligence are crucial. Sellers need to transfer ownership smoothly, coordinate with installers if necessary, and update utility accounts. By following these steps, sellers can navigate the process confidently and ensure a smooth transition for both themselves and the buyers.