Houses with solar are priced higher than those without. They also have higher chances of finding a buyer, and homeowners and realtors know that!
Generally, buyers prefer houses with solar panels installed. That comes amidst a wake-up call to reduce carbon emissions. However, the excitement of finding such a house should not cloud your judgment.
If you want to buy a house with solar panels, turn your attention more to the solar panel system itself. We will provide you with tips for buying a property, including answers to seek before committing.
Is Buying a House with Solar Panels Worth It?
If I am asked this question, I would say YES without hesitation. Benefits come with solar energy compared to the grid or other renewable power sources. Let’s highlight a few benefits you will get when buying a property with a solar energy system.
The upfront cost of buying solar panels and all equipment needed in a solar panel system is high. And even if you consider the incentives and tax credibility you are likely to get, it will take you over 10 years to start making a profit.
That is not the case when you buy a house with installed solar panels. Usually, you will start making money immediately.
Everyone is concerned about climate change, and we believe you are also part of this movement for achieving carbon neutrality.
With solar panels, you are sure of the energy source you will be using in your new home. Solar energy does not contribute to your carbon footprint.
Require Little Maintenance
You may have to maintain the solar system depending on the financing option. But you have nothing to worry about since solar panels and equipment require almost no maintenance. Besides, they come with warranties.
See Related: Best Home Energy Saving Products
Tips for Buying a House with Solar Panels
If you want a property with a solar energy system, (which you should), consider the following factors. They could make or break the deal.
So, you better stay alert when reading and when bargaining the terms of the sales.
1. Who Owns The Solar Energy System?
This is the first and most important factor because many solar financing options exist. Before committing to buy a house with solar panels, ask the current owner this question and expect a detailed response.
The following are the possible answers:
Fully Owned Solar Panels
Fully owned solar panels mean the owner paid an upfront cost for the solar system and can do anything with them.
If the solar panels are fully paid for, the current homeowner enjoys tax incentives and credits. So, ask if they will be transferred to you or not, and factor that in the price.
Lastly, ask about the solar company that installed the solar panel system and the remaining warranty on the products. Sometimes the company still maintains them as part of after-sales services.
Usually, houses with owned solar systems should be your first choice. That is because there is not much documentation to consider. The owner simply adds value to the property’s price tag.
Solar Panels on Loan
A solar loan can be confusing because you have to talk it out with the current homeowner. The homeowner should provide you with payment details and calculate the remaining amount to be paid.
The good news is that solar loans still attract tax incentives and credits.
PACE Financed Solar Panels
Property assessed clean energy (PACE) is quite similar to the solar loan, but it comes with one difference.
With PACE-financed solar panels, the solar panels and solar equipment are on loan, but the loan is attached to the property. That is because the payment is processed through property taxes.
If you want to buy a house with PACE-financed solar panels, you will be responsible for paying the loan.
It should prompt you to review the payment terms with the current owner before you make any payments or purchases. Check the financing terms and only commit if you accept them.
See Related: How to Refinance a PACE Loan [Step-by-Step Guide]
Solar on Lease or PPA
These are the last solar financing options and responses you may get from any property owner. Once again, you have many things to review here. But before we get there, let’s define what these two financing plans mean.
A solar lease means the property owner pays fixed monthly charges for using solar energy. What you pay monthly doesn’t change. But unlike other financing options, you never own the solar panel system. It is much like paying energy bills from the utility only that you will pay less in this case.
A solar power purchase agreement (PPA) is almost the same as a solar lease. But in this case, you pay monthly fees according to the solar energy produced by the system. This value fluctuates depending on the season of the year.
Both solar leases and PPAs are contractual. If the house you want to buy has solar panels financed this way, you may continue with the payment plan or ask for termination. In that case, the current homeowner should pay the termination fee and call the company to take the solar equipment and solar panels.
A house with owned solar panels is better than one with solar loans or PACE financing. Also, the latter options are better than solar leases.
Ask how the solar panels are financed and make your decision as appropriate.
2. Are The Tax Incentives and Credits Transferable?
This seems like a challenging question. But unfortunately, it has a Yes or No answer.
The current property owner should answer you as appropriate. Suppose the response is a Yes, you have to again inquire how will the benefits be transferred to you, or is there any documentation involved.
If yes, ask how to go about it.
The second response may be a No. That either means there are no tax credits on incentives or the solar system. That is usually the case with solar panels financed through lease or PPA.
See Related: How Much Does a Solar Battery Cost?
3. Check Out the Installation
Before you buy a house with solar panels, check the installation.
You may need an expert to help you check everything, including compliance with the local guidelines. You don’t want to get yourself into a problem by buying a property with illegally installed solar panels!
Also, check the strength of the roofing structure to hold the weight of the solar panels.
If the solar panels weigh heavily on a fragile roof, you may need to reconsider your choice.
Sometimes, you may not be allowed to improve or renovate the house. That is the case if the house has been PACE financed, PPA, and leased solar panels. Ask about that if you plan to make renovations immediately.
Solar leases and PPAs are long-term contracts that can last for 25 years.
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4. Check Solar Warranty
You should check the warranty if you want to buy a property with a solar system. Ask how many years are left if it is still valid.
Also, use the same opportunity to ask who services it. A solar company will certainly be servicing the leased solar panels. But you may carry that responsibility if they are owned by the homeowner.
5. Will You Own the Solar System?
The response depends on how the solar panels were financed. It will be a yes, only if you find a house with fully-owned solar panels or PACE-financed solar panels.
But if buying a house with loaned or leased solar panels, forget about ownership. The solar system remains an asset of the solar company unless you choose to buy it.
6. What Type of Solar System is Installed?
We have two main types of solar systems: off-grid and grid-tied. However, we also have a hybrid solar system.
An off-grid solar system is independent of the utility power system. That means it is not connected to the grid system. Instead, it has power storage equipment, usually a battery bank. Solar panels generate electricity in the daytime and store them in chemical form in the batteries.
They are usually more expensive and will significantly increase the property’s value. However, you can forget about paying energy bills.
Grid-tied solar panels incorporate an inverter and metering system that allows you to sell generated electricity to the utility company during the day and import the same for night use.
There is no solar power energy storage system. You can actually earn money for the excess electricity exported to the grid.
A hybrid is a union between the two solar systems – it’s rarer, mostly because of the cost. It is tied to the grid and has a battery bank for storage. It simply means you will be selling your excess power to earn more.
The price tag of a house with solar panels depends on the type of solar panels installed, with off-grid and hybrid systems being significantly more expensive.
7. What is The Power Production Capacity of The Solar System?
If you want to buy a house with a solar system, the generated electricity should meet your power needs. It was designed and installed for the previous owner, whose energy requirements may significantly vary from yours.
8. Type of Solar Panels
Solar systems are classified into two groups according to their purpose. The first one is solar thermal heaters. And as the name suggests, they are for heating water. The second and most common are solar panels for generating electricity.
Which of these two systems do you want? You can get both or either, depending on your preference.
How are you going to determine this?
If the seller is open enough, you should access their current energy bills and see if they save money on electricity, or water being heated.
Also, take that chance to know if the solar system is generating any meaningful income. Not all solar systems are worthy of the hiked price tag of the property.
9. Is it Possible to Improve the Property?
Don’t be surprised if you are limited in what you can do on a property with solar panels. That is usually the case for homes with leased solar panels or PPA – or you are part of a restrictive HOA. You may have to wait until the contract expires before you can do any roof-related renovations.
The idea is to avoid risks associated with disturbances on solar panel installations. However, the waiting might be just too long for you.
If you are the new owner and feel entitled to do anything in your new home, buy a house with fully-owned solar panels.
See Related: Best Portable Solar Panels
10. Is Net Metering Possible?
Net metering is tied to the type of solar system installed and the region. It is possible to sell excess electricity to the grid to save money in some areas. You should consider this to further gain from investing in such a property.
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What Is The Value of The House Without Solar Panels?
We have to admit that houses with solar panels are priced higher and sell faster than those without. However, we have to question the price without including the solar panels. The seller should not hike the price because there is a solar system.
Sometimes the added value may be higher than the cost of solar panels and solar equipment. Each watt of solar power can improve the home’s value by about $3.00. That implies a 5kW solar system will increase the property’s value by $15,000. Use these facts to make an informed buying decision.