Impact of Solar Panels on Your Home’s Resale Value
Getting solar panels for your home is a smart choice – both financially and environmentally. However, you may wonder what happens if you decide to sell your home?
For many homeowners looking into solar, this is a big question that looms at the forefront of their minds. Fortunately, you don’t need to worry! As people are beginning to understand the financial benefits of outfitting their homes with solar, this can actually be a major selling point. Lower energy bills and other benefits of solar are catching the eyes of many as they search for their new homes. As a society, we have become more aware of the importance of protecting the environment and have placed significant focus on discovering sustainable solutions.
Do Home Buyers Want Solar?
The quick answer is yes!
In a 2022 study by Rocket Homes, home listings with solar spend 13.3% less time on the market and are 24.7% more likely to sell over asking. This is a huge perk for homeowners trying to sell their homes, but are worried about the resale value with solar. In addition, of those who don’t have solar power in their homes, 66.5% are interested in getting it in the future. This means that the majority of people who are shopping around for a home are interested in either getting solar panels or purchasing a house with an existing system.
It is evident that there is a growing demand for solar energy, which is expected to further increase in the future.
Selling Your Solar Home
As you begin the process of selling your solar home, it’s important to communicate to potential buyers the benefits of purchasing a home with an existing solar system. Some benefits include:
- Reduced energy bills: When your solar panels generate the electricity for your home, you will see a smaller electricity bill.
- Protection from rising energy costs: Electricity rates keep rising each year in Pennsylvania and New Jersey, so a solar power system can help protect you from future price increases.
- Read more about how NJ energy prices have been on the rise here.
- Solar Renewable Energy Credits (SRECS): SRECS are “vouchers” that are issued at the state level and allow you to earn money for the electricity generated by your solar panels.
- Reduced air pollution: Solar panels create clean energy that does not pollute the atmosphere as many other sources of energy do.
- Reduced carbon emissions: Going solar reduces the demand for fossil fuels, limits the emission of greenhouse gasses, and shrinks your carbon footprint.
- Reduced waste: Solar panels are durable, and they can last 25+ years with low/no cleaning and maintenance needs. In addition, the vast majority of solar panel technology can even be recycled.
When it comes to selling a solar-powered home, it is crucial to have a realtor who understands the benefits of solar energy and has prior experience in selling such properties. A knowledgeable realtor can help you showcase the unique advantages of your solar home, such as reduced electricity bills and a smaller carbon footprint. They can also help you navigate the complexities of appraisals, tax incentives, and financing options with a solar-powered home. By choosing the right realtor, you can maximize the value of your property and make the selling process smoother and more efficient. So, take your time and research to find a realtor who is well-versed in solar homes.
Selling Your Home With Owned Solar Panels
Fully owning your system will simplify the resale process for everyone involved. Before listing, make sure to get an appraisal of your home that includes your solar panels to ensure their value is added. Work with a real estate agent or appraiser who has experience selling homes with solar panels.
There are several methods to value your solar home:
- Income-based valuation: Focusing on the projected income the solar system will generate for the owner over its forecasted remaining lifespan, it’s a practical way to explain the return on investment to potential home buyers. This approach is usually one of the most relevant method to estimate fair market value because it considers the specific contracts and incentives applicable to the solar asset.
- Cost-based valuation: This method calculates the cost of building the current type of solar system on the home based on the quality of the equipment. The cost approach is most applicable in estimating the value of a new or hypothetical solar asset. The cost approach often provides the upper bound for the FMV of the solar asset.
- Market-based valuation: This method determines your home’s market value by observing the impact of the system on the home’s value compared to those without a solar system. The reported price per capacity unit for recent comparable systems is analyzed and a selected cost per capacity unit is then applied to provide an indication of the estimated fair market value for the solar asset.
When selling a house with a solar system that you have paid off and own, you should directly introduce the buyer to your solar provider to handle the transfer of any contracts, service agreements, warranties, and maintenance. When you initially purchase your solar system, it is crucial to file away all of your paperwork regarding the purchase for when you sell your home. New homeowners will want this information for their records and to ensure that they are caring for their new system properly. Any information about wattage, warranty, who you bought the system from, and financial paperwork will be important for the new owners to have.
At Exact Solar, we take care of system maintenance and are always here to help out customers with any issues or questions. If you ever decide to sell your home and solar system, be sure to share our contact information with the new owners.
Selling Your Home With a Leased Solar System
While it is much more straightforward to sell your home when you own your solar system, it’s still possible to sell with a leased system – there are just a few extra steps in the process.
Your first decision will be to either transfer the lease to your home buyers or purchase the panels from the solar company to conclude the lease early. These options both have benefits and drawbacks, so you’ll need to review the terms and conditions of your contract to decide which is best for your particular situation.
Transferring your lease will allow you to be free of any payments owed in the remaining duration of the lease. The transfer process itself isn’t complicated, but it does involve a lot of coordination with all parties involved: you, your real estate agent, the solar company, the buyer, the buyer’s real estate agent, and even the buyer’s mortgage lender. If you choose this option, you will need to contact your solar lease company to get the ball rolling and paperwork started.
If you decide to buy out your solar lease before selling your home, you might be able to sell for more and widen the scope of qualified buyers. Many solar lease contracts include an early buy-out option, allowing you to pay for the remainder of the lease and own the solar panels outright. This option removes the solar lease from the home sale equation and boosts your home’s market value.
Helping the Environment and Your Wallet with Solar
If you’re thinking about investing in solar energy, you might be worried about whether it will affect your ability to sell your home in the future. Fortunately, there’s no need for concern! Solar energy not only benefits the environment and helps you save money, but it also boosts the value of your home.
Are you interested in learning more about how solar can serve your needs? We’re here to help guide you through the process. To get started, visit our website at this link or call us at (215) 621-8353 for a free consultation.