One of most frequently asked questions we receive from prospective solar customers is, "What happens if I decide to sell my home with solar on it?" This is a fair question given that the average residential solar energy system is designed to last for at least 25 years with some older systems still functioning even after 40 years. Given this long lifespan, you'll be able to generate and enjoy your own clean and affordable energy for decades to come, but with it comes questions about what to do if you decide to sell your home with solar.
Although it might seem intimidating at first, selling or buying a home with solar offers many advantages. For the sellers, solar represents a huge differentiator that translates into a measurable increase in home value. For the buyers, there's the potential to acquire a home with little to no electric bill. Existing solar installations are also often grandfathered into older and more lucrative rate plans that are no longer available, so picking a home with solar can sometimes buy you into even more savings that you would have realized by simply buying on today's market for installation on your new home.
Of course, like all most things related to home buying, there are many variables to consider when assessing a solar home sale or purchase. To help out, we've compiled a short list of the most critical considerations to get you started.
How Solar Improves Your Home's Value
Installing solar is an investment that starts saving money from the moment it's turned on. Beyond helping you save on your electricity bills every month, solar also adds value to your home that can be realized when you go to sell. A recent report by Zillow shows that on a national average, homes with solar sold for 4.1% more than homes without solar. So by investing in solar, you're both saving money every month AND increasing the resale value of your most substantial asset. It's literally a win-win scenario.
What do I need to know if I'm buying a home with solar?
There are a few key facts you should know before you decide to purchase a home with solar. Asking the questions below, and any others that you might have, will help you determine whether the prospective home and solar energy system is right for you.
✓ What company installed the system? With a solar energy system's lifetime measured in decades rather than years, knowing if the original company who installed it is still in business can greatly affect your overall experience. Be sure to ask if they are a local company you can reach out to if you have questions and whether or not they have a service department to ensure the system is operating efficiently for years to come.
✓ Is the system owned or leased? Determining whether the system is leased or owned can have a major impact on a buyer's final decision. With a solar lease, the third party owns the panels while the homeowner pays a fixed monthly fee for the energy generated. If you buy a house with leased solar panels, you will need to follow the necessary steps to transfer the remaining lease terms into your name. Purchasing a house with owned solar panels is slightly easier, since ownership of the system is tied to the property and therefore transfers with the home transaction.
✓ What's the system size and kilowatt hours produced annually? Knowing the system size and kilowatt hours produced annually will help you view the system's value in the context of money. Most people understand that kilowatt hours translate into dollars. By knowing how many kilowatt hours the system produces monthly, it's much easier to conceptualize tangible savings. You can also ask the sellers for a few months of electricity bills. Although every family and their energy usage is different, this can still give you a good idea of how much the previous residents saved with solar and a baseline to estimate your potential savings from.
✓ Is the solar energy system grandfathered into a rate plan? A number of older rate plans have lucrative benefits for solar owners, and many of the utilities institute grandfathering programs for existing solar owners when new rate plans are rolled out. Depending on whether the solar energy system is grandfathered, and what plan it's grandfathered into, you might realize even bigger savings on your electric bill. This is a a great example of where having a solar-savvy listing or buyer's agent is critical.
✓ What are the warranties on the different system components? Depending on the panel and inverter manufacturers, most solar energy systems come with a 10-25 year warranty on the equipment installed and a workmanship warranty from the company who installed them. Be sure to know what is still under warranty and how much longer it will be covered.
What should I do if I'm selling my home with solar?
Without question, selling a home with solar puts you in an advantageous position within the larger real estate market. That said, it's critically important to fully understand what you have and to select a good listing agent who understands solar as well. Before you list it, go through the check list below to ensure your home has the best potential to catch prospective buyers' eyes.
✓ Make the solar pop: First and foremost, you should amp up the fact your house has solar in your listing. With solar's popularity booming, more and more people are interested in this form of renewable energy and making it stand out will attract more eyes from the start. Having a solar energy system comes with many benefits, so be sure to highlight them. Everything from the lower electricity bills and reduced carbon footprint, to the warranty on the system and if it's grandfathered into a lucrative utility rate plan can help get people excited about your home and solar system.
✓ Choose a realtor who knows solar: When putting your house on the market, you'll want to pick an agent who fully understands Arizona's complex solar landscape and can speak to your specific solar energy system, rate plan, and the numerous positive benefits they provide. Potential buyers will have questions about the solar panels they see on your roof, like how it works, required maintenance, and what they should expect from it—your realtor should be confident in the intricacies of solar to thoroughly answer them. If you're thinking of listing, contact your solar installer and ask for an agent referral. Picking an agent without solar knowledge is the best way to ensure that you won't get fair market value for your solar-powered home.
✓ Be prepared with information: In addition to having a solar-educated realtor, educating yourself by gathering information about your solar energy system will give you a competitive advantage. Take a look at the questions under the Buying a Home With Solar section and ensure you have information ready to answer them. Who installed the system, system size and kilowatt hours produced, warranty period, and a few utility bills from the past year will help you educate prospective buyers about what they can expect if they buy your home.
If you're interested in solar for your home, now is the time to act! With the 30% ITC coming to an end, 2019 is surely the most important year for solar in more than a decade. Contact one of our qualified solar integrators to start your solar project today!