How To Buy & Sell A Home With Solar

Buying or selling a home with solar is a new experience for many homeowners and homebuyers. The home-buying process can be stressful, and encountering unfamiliar technology can add to the complexity. We hope this article will serve as a guide to assist the process and make for a smooth transition.

Questions to Ask When Buying A Home With Solar Panels

Like any major appliance, it is important to gather information about the system to determine if it is a good choice for you. When buying a home with solar panels, there are several questions you should ask so that you can become familiar with how the solar array works and the many financial and environmental benefits it provides.

Do the Current Residents Own the System?

This is perhaps the biggest question. Just because solar panels are installed on a house doesn’t mean they are owned by the homeowners. If the solar array was purchased outright or with a loan, the process is simple. The ownership of the solar array transfers with the sale of the home, and the seller is responsible for paying off any remaining balance on the loan. Where it gets more complex, however, is when the system is leased or subject to a power purchase agreement. While these types of programs are less common on residential solar arrays, there are a handful of solar companies and utilities which provide these types of programs.

In the case of a lease, the homeowner pays a set monthly fee for the power provided by the solar array. In the case of a Power Purchase Agreement (PPA), rather than a flat fee, the homeowner buys the power. Therefore, the amount they pay is based on the power generated and not tied to the solar equipment. In each of these cases, the homeowner does not own the system. This shouldn’t automatically be considered a deal-breaker. Many times, these solar financing programs work out well for both parties. It does, however, add a degree of complexity.

It is important that the seller shows you all official documents related to the lease or PPA agreement. These documents should tell you how much you will be paying, how long the agreement is for, and if there is an option to purchase the equipment when the agreement expires. It should also lay out any early cancellation penalties if you do not approve of the terms. Making sure you know the agreement in place and the official process for transferring the solar array to the new homeowner will help make the transition between the parties involved quick and easy.

If the System Was Professionally Installed, is the Installer Still Available for Servicing?

Should anything happen with the solar energy system in the future after you purchase the home, it is reassuring to know you have a trusted solar partner to fall back on. If the original installer is no longer in business or too far out of the area, future service and support requests may become more complicated. Luckily, Eagle Point Solar has a fully dedicated service and support team to assist you. Additionally, you can also connect with your state’s solar trade association for guidance in pointing you in the right direction for a reputable installer near you.

Is it a Reputable Company?

This tells buyers about what they can expect concerning the quality of the equipment, installation and potential for future problems. Do some preliminary research such as reviewing Google Reviews, checking with the local Chamber of Commerce or Better Business Bureau or merely asking around the community. If the homeowners installed it themselves, check whether this DIY project voided any manufacturer warranties on the equipment due to lack of proper qualifications or certifications required for proper installation.

Are the Manufacturers of the Solar Components Still in Business?

This question is important for warranties, which can extend between 25-30 years on some components and are most often transferable. It could be more difficult to have repairs completed or receive reimbursement for the costs if the manufacturer is no longer in business. It might also be easier to find a qualified solar service technician if the manufacturer is still in business, even if the original installer isn’t.

Does the Owner Have a Copy of the Original Contract and/or an Owner’s Manual?

The original contract should list how much the system cost to install and its components. It will also provide a complete list of any warranties and some educational information, in addition to various troubleshooting resources.

If the answer to each of these questions above is yes, you shouldn’t have any concerns about buying a house with a solar energy system. You will own the system outright, save on your monthly electric costs and any active warranties should be honored. If the answer to any of these questions is no, that doesn’t mean you shouldn’t buy the home. You may just need to do a bit more research to gain further insight into the benefits the solar array provides so you can make an informed decision about the home.

Selling A Home With Solar Panels

Will My Solar Array Add Value to My Home?

From the buyers’ perspective, solar panels can be considered an upgrade, like high-efficiency appliances or new windows. The long-term savings in utility costs are going to benefit the new homeowners for many years to come. This, in turn, increases the value of the home. The statistics prove this to be true. According to Zillow, homes with solar sell for 4.1% more than a home without solar. They also sell 13.3% faster and are 24.7% more likely to sell for above asking price, according to Rocket Homes.

As the seller, it is critical you communicate the details of the solar array to potential buyers. Try to gather documents including warranties, contracts, and equipment technical sheets. The goal of providing this information is to reduce confusion and indecision for prospective homebuyers. It is key to have a good system in working order for any transferrable warranties. Energy production and monthly utility savings information can also make the home more attractive for buyers. Consider sharing your average monthly electricity costs, annual energy savings, as well as solar production data.

Can I take the Solar Energy System With Me?

While it is technically possible to remove a solar energy system from one home and install it at another, it is rarely the best solution. First you should consider the logistics of placing the current system on the new home for which it wasn’t designed. Some properties are simply better candidates for solar due to sun exposure, utility policy and building codes. Also, even if you want solar at your new home, the cost of removing and then reinstalling the system at your new home may not provide you with the cost-savings you are hoping for.

Remember, a solar array is designed to offset the energy consumption at that particular property. Your new home may be bigger, smaller, provide more/less roof or ground space, require more/less energy to heat and cool etc. The best plan of attack would be to have your new home assessed for a solar array designed specifically for your energy consumption at your new address. If you are moving to a new state, you may also have alternative solar incentives to take advantage of.

Information Sharing is Key When Buying or Selling a Home with Solar Panels

Buying or selling a home with solar panels already installed can be a smart financial decision for both parties involved. From a seller’s perspective, it can increase the resale value of your home. You will want to limit any concerns prospective buyers might have regarding the array to maximize your home’s sale price. Providing detailed information about the solar array is key.

From a homebuyer’s perspective, you will want to be certain the solar array meets your financial and environmental expectations.  If you are looking at buying a home with solar panels, take some time to get answers to your questions. This includes any solar technology you may be unfamiliar with. If need be, consult a solar energy professional. They can help answer questions for both parties involved and make understanding the true value of the array much easier.

Sources:

Rocket Homes study on solar’s impact on home sales: https://www.rockethomes.com/blog/housing-market/67-percent-of-households-want-solar-panels

Zillow study on home sale prices: https://www.zillow.com/research/solar-panels-house-sell-more-23798/