Selling a house with solar panels can work in your favor, with many homeowners even making more money post-sale than they expected. But not all solar stories have a happy ending, as some have shared frustrating experiences when trying to close the sale. So, what’s the real deal? Is going solar a good move if you’re planning to sell down the line? Barring all other factors, the biggest deal breaker often comes down to how you pay for your solar system. In this article, we’ll break down the three common ways for financing a solar system, so you can be prepared when it’s time to sell.
Is it easy to sell a house with solar panels?
Without looking at the complexities of the housing market, you can sell a house with solar panels pretty easily – and quickly – especially when you’re dealing with informed buyers.
These are people who are very much aware of the benefits of solar energy and know how to take advantage of it, for instance:
- How solar can save them hundreds of dollars on utility bills
- How they can earn extra income via Solar Renewable Energy Certificates (SREC) programs and net metering benefits
- How it helps reduce carbon footprint and save the environment
Even better, many of these buyers are willing to pay thousands more for homes with solar panels. In fact, a 2019 Zillow study found that homes with roof-mounted solar panels sold for 4.1% more than comparable homes without them.
So yes, solar panels can definitely have a positive impact on your home’s resale value.
But of course, let’s take a look at the other side…
If there are informed buyers, you’ll certainly come across uninformed buyers who are shopping in the market for entirely different reasons…
These buyers are more likely to set aside the benefits of solar, and focus instead on what it “costs” them to proceed with the sale.
Will I have to assume any extra financial responsibilities? Will I get myself into more debt?
If you bought your panels outright, this shouldn’t be a problem, and you’ll likely breeze through the ownership transfer with a smile.
But if you financed your panels through a solar lease or power purchase agreement (PPA), things can get a little more complicated (and we’ll get into this shortly).
That said, how you paid for your solar panels matters as it can greatly impact the sale.
What to Expect When Selling A House With Solar Panels
Selling a house with solar panels isn’t all that different from any other sale. You’ll still face a few hurdles, handle buyer objections, and go through negotiations.
But, as mentioned earlier, how you finance your solar system will greatly impact how smoothly the sale process will go. Let’s take a look at what to expect for each case.
If You Bought Your Solar Panels Outright
If you paid for your solar panel system upfront, selling your home should be straightforward.
You simply factor the value of the panels into your home’s price, taking into account things like their size, lifespan, and energy production.
In the same way, buyers are likely to see it as a simple equation: house + panels = price. And since solar panels are often seen as an added bonus, similar to a renovated kitchen or bathroom, the price can be easier to justify.
In such a case where you fully own your solar panels, no loans or leases are involved, And that’s a good thing as both you and the buyer can avoid the headache of dealing with third parties like lenders or leasing companies.
If You Loaned Your Solar Panels
Loaning your solar panels is the same as buying anything on credit. You’re essentially paying over time instead of upfront. The loan stays with the system and the buyer will have to take it on if they purchase your house.
This means extra financial commitment for them – not ideal as you’re adding strain to their decision-making process…
Of course, this doesn’t mean an automatic “no”. Buyers who understand solar financing will see this as a much better option than taking on a solar lease or PPA.
Still, be prepared for buyers to request a price reduction to offset the loan balance they’ll inherit, and to engage in more negotiations. No one wants to end up with the short end of the stick, after all.
Your best option? Buy off the entire loan before listing your house.
This makes your solar panels an asset to your home instead of being perceived as a debt. Plus, without any additional strings attached, you may be able to keep negotiations a bit simpler.
If You Agreed to a Solar Lease or PPA Agreement
Here’s when things get really complicated.
With a solar lease or Power Purchase Agreement (PPA), you’re essentially renting the system for about 20 to 25 years.
In a lease, you pay a fixed monthly fee, while a PPA charges you a set rate per kWh. No upfront costs are needed, and the rates are usually lower than what utility companies charge.
Sounds like a good deal, right?
Well, these monthly payments typically increase by 3 to 5 per cent each year. And over time, this can erase the savings you enjoyed early on.
See, these kinds of arrangements add layers of complication to the sale and make buyers walk away to look for much better deals.
As the seller, there are two ways you can go about it.
Firstly, you can spend ages trying to find a buyer who’s willing to take on the lease and monthly payments. But remember, even if a buyer agrees to it, they’ll have to pass a credit check from the solar company, which could change the outcome of the sale.
If no buyer wants to assume the solar lease or PPA, then you have only one choice – opt out of the solar panel contract and buy out your solar system.
This will grant you full ownership of the system – but at the cost of paying a huge amount of money. In some cases, the cost of the buyout can even eat up most (or even all) of your profit from the sale of the house.
What should I disclose to potential buyers about the solar panels?
It’s your legal and ethical obligation to disclose to buyers any important details about your solar panels. This includes:
- Details of your solar panels. Buyers will want to know your system’s size and energy production to see if it meets their energy needs and to make out the potential savings they can expect.
- Warranties. Let buyers know if the panels are under warranty and what’s covered (e.g. parts, labor, or performance guarantees). A strong warranty can be a selling point, as it reduces the buyer’s long-term risks.
- Net Metering Agreements and SRECs. If you’re part of a net metering program or earn Solar Renewable Energy Credits (SRECs), explain how it works and how they can take advantage of it as you did.
- Financing or Ownership Status. Be clear about whether the system is owned, financed, or leased. If there’s a loan or lease, explain what the buyer will need to do to take over the agreement – or if you plan to pay it off before the sale.
- Roof Condition. Especially if panels are roof-mounted, buyers will want to know if your roof can handle the panels for the long run or if repairs are needed asap.
Think of this not just as an obligation, but also as a way to market your house. The more buyers know what they’re committing to, including the benefits of your solar setup, the more they are to trust you and move forward with the sale.
Increase Your Home’s Value With Quality Solar Panels
At Avail Solar, we aim to make your transition to solar energy as easy and hassle-free as possible. We offer end-to-end solar panel services, including design, installation, and ongoing maintenance, along with personal guidance to keep you informed throughout the process
Contact us today and speak with one of our solar experts.