The housing market in Phoenix has been white-hot for a while, thanks in part to historically low interest rates and the new work-from-home culture brought about by the coronavirus pandemic. Demand shows no signs of slowing, with transactions hindered only by inventories.
All of this means that more solar homes are changing hands than ever before. When managed correctly, these transactions offer ample upside for both buyers and sellers. In fact, many solar-equipped Arizona homes are grandfathered into highly lucrative, since-retired utility rate plans that offer a significantly better return than today’s options. Grabbing one of these can mean a substantial boost to your monthly household budget.
As part of our educational webinar series, we teamed up with Realtor and Arizona solar home expert Tara Rutkowski to offer an educational webinar and guide specifically for buyers and sellers of solar homes. The webinar is free and includes a copy of our how-to guide: Buying and Selling a Solar Home, A Guide for Buyers, Sellers, and Agents.
To give you a taste of what the webinar covers, here are four tips to maximize a solar home transaction. If you would like to learn more, please join our free webinar.
1. Grandfathered Net Metering Homes Offer Bigger Returns
Net metering plans offered solar homeowners a dollar-for-dollar credit for any excess solar energy sent back to the grid. Newer rate plans cap the buyback rate to a fixed amount that is much lower. If a solar energy system was installed under an older net metering plan, there’s a good chance that the home is grandfathered into this program for the duration of its 20-year contract. A buyer must transfer the electric service into their own name without changing plans in order to assume the net metering benefits. If a different rate plan is selected, the net metering program will end, and the new homeowner will never be able to go back.
Because net metering offers a higher return rate, these homes are highly prized. Sellers can maximize this value while marketing their home and buyers can buy into a lucrative rate structure that has long since been retired. This is where working with a solar-savvy agent and appraiser really pays off. They can help you identify a net-metered home and guide you through the transfer process to preserve the grandfathered status.
2. Pick a Solar-Savvy Realtor
When listing a solar home, it’s imperative to choose an agent with proven experience transacting solar homes. Don’t just take someone’s word for it. Ask for past client references. At the very minimum, a listing agent should be able to explain how solar works, understand the value of current and past rate plans, understand the solar lease or loan assumption process, and generally know how to market the value of the solar addition. Without this experience, it’s easy to leave money on the table or botch the necessary paperwork to complete a transaction.
The same applies when selecting a buyer’s agent. If you’re looking to acquire a solar-equipped home, or plan to add solar after purchase, a solar-savvy agent will be able to speak to the benefits of the different solar rate plans in different utility districts. Different plans can dramatically impact how much money solar panels will put back into your pocket every month. If a prospective purchase already has panels, the home may be grandfathered into a net metering plan. A savvy agent will be able to spot these gems and you’ll benefit financially as a result.
3. Be Sure to Transfer Warranties
It’s important to contact the original system installer to determine what steps are necessary to transfer a workmanship warranty and to verify the time remaining on any equipment warranties. Sadly, if the original installer is no longer operating, any workmanship warranty will have died with their business. That said, a reputable installer should be able to help assess the status of any manufacturer warranties. Here at Sun Valley Solar Solutions, the balance of our 10-year workmanship warranty can be easily transferred to one new buyer once a full system inspection is complete, and the transfer form completed.
4. Leased Solar Is Different From Owned Solar
Leased panels are not owned, so they must be transferred separately to a prospective buyer through a dedicated process. In short, a prospective buyer must arrange financing through the leasing company, including passing a credit check. When a buyer agrees to assume a solar lease, the mortgage company will often include that solar lease payment in the buyer’s debt to income ratio. Sometimes, this additional payment will impact the buyer’s ratios to a point where the home loan is impacted. For this reason, agents must vet any potential buyer thoroughly, and be very deliberate with the transfer process. In the right hands, assuming a solar lease will look easy, with the wrong agent on your side it can go sideways easily.
If you'd like to learn more about buying or selling a solar home or have questions you'd like to ask our trusted solar-savvy realtor, Tara Rutkowski, we invite you to register for our upcoming webinar below.