Considerations when Selling a Solar-Powered Property
More and more homeowners are understanding the benefits of powering their home with the sun; most importantly: helping to preserve the planet and saving money (win-win). However, a solar-powered home can still raise questions and leave potential homebuyers perplexed and unsure.
What solar power does: it absorbs clean energy from the sun, reducing greenhouse gas emissions that are harmful to the planet. It reduces the carbon footprint and lessens our dependence on fossil fuels (when burned, fossil fuels create toxic gas that cause pollution and possibly global warming).
In 2015, the Department of Energy reported that adding solar to your house can earn you $15,000 more dollars than a house not fitted for solar power.
Here are some benefits to point out to buyers considering a solar-powered house:
Solar power will save energy costs
As electricity continues to become more expensive, a solar-panel system can usually take care of at least half of a home’s energy needs, which means cutting your electric bill in half. Of course, some people are able to cut out an electricity bill altogether.
Energy savings will accumulate over the course of years
The installation should fully pay for itself, many times over.
Solar panels can produce a whole lot of electricity
It usually depends on the type of solar panel, the angle of your roof, and the average amount of sunlight available, but in general, a typical solar panel system can produce enough energy to run at least half of a home’s energy needs.
Of course, the pitch is not without its pitfalls. It’s critical to ask the seller if the solar panels were purchased or leased. Let sellers know that leasing a solar-panel system can get complicated when it comes time to sell the home. It may mean having to break the lease with the solar-panel company, which could be an expensive penalty (typical leases can average 15 years). Another option, of course, is to see if the lease can be transferred to the new homeowner. However, prospective buyers may be reluctant to take on a long-term lease on top of a home sale.
Another possible red flag: an appraiser cannot add any value to a property with a leased solar-panel system. An appraiser cannot increase the value of something that is not a permanent part of the property.
Ask the seller the following questions:
- Is the system leased or purchased?
- If leased, what are the next steps for transferring the lease to new owners?
- What are the details of the warranty?
- How do you remove the solar panels if the prospective buyer passes on the option? What are the costs involved in removing the panels?
The reception of solar-power often depends on the market and the environment. Eco-friendly places may welcome solar-power with open arms; however, in places that are not as familiar with solar power, it may be a tougher sell. Not everybody is open to the way solar panels may change the aesthetic look of a home. Panels can also put stress on an older roof.
Less sunny states – Alaska, New York, Oregon, Vermont, Washington – may have a more difficult time appreciating the benefits of solar power in their home. The impact on their monthly energy bills may not be as dramatic.
However, property value can still increase. The National Renewable Energy Laboratory found that each additional $1 in energy bill savings from solar installation adds $20 to a home’s total value. Of course, this depends on the location of the home and the size of the installation.