Home solar panel systems are designed to last at least 25 years, and many older systems are still running decades after they were first installed. This long lifespan means you’ll be saving money with solar for many years to come, but it also raises the question of how solar will affect you if and when you decide to sell your home. So, what do you need to know about solar if you are selling your home or if you’re a buyer looking at homes with solar already installed? Understand how solar panels affect home value when it comes time to sell, and use the two lists below as a helpful resource to be prepared for buying or selling a home with solar panels.
Solar Panels and Home Value
It makes intuitive sense that the ability to generate your own electricity and the resulting energy bill savings would add value to a home, but what does the data say? A 2015 study, sponsored by the Department of Energy and conducted by the Lawrence Berkeley National Laboratory, looked at data from the sale of over 22,000 homes across eight states between 2002 and 2013. Of those homes, roughly 4,000 had solar panels.
The research confirmed what many had long thought to be true: homebuyers are willing to pay more for houses with solar panels. On average, homebuyers were willing to pay an additional $15,000 for a home featuring a 3.6 kW solar system (which is a relatively small compared to the Namasté Solar average system size of 7 kW). This was true across the eight states studied, their unique housing and solar markets, and different home types.
These findings were confirmed again by a report from Zillow that looked at sale prices and listings from March 2018 to February 2019. Zillow found that homes with solar panels installed sold for an average of 4.1% more than non-solar homes.
Selling a Home with Solar Panels: What to Do
- Find a qualified realtor: Your potential buyers will have questions, and you need someone on your team who is prepared to talk about the benefits of owning solar. You can use listings to find a NAR Green Designee or an EcoBroker, both will have completed training on green real estate features. Other realtors will be able to help you sell you home, but make sure you’re confident in their ability to represent your solar panel system to buyers.
- Gather up your information: Check out the list of likely questions from buyers below – be prepared to answer them! Be ready with the name of the company that installed your solar panel system with contact info, size of system, kilowatt hours produced, two or more utility bills from the past 12 months, date the system was installed, panel manufacturer name, warranty period, and permit information. System schematics can also be helpful if you have them.
- Energize your listing with solar: Your home comes with an asset that produces clean energy, so make sure to highlight it in your listing. Talk about lower electricity costs compared to other homes without solar, warranties on the system, the ability to monitor the system via an online portal, and the smaller carbon footprint of the home.
- Appraisal form: Fill out the solar panel section (page 3) of the Residential Green and Energy Efficiency Addendum (Appraisal Institute form), and verify that lenders know how to request a qualified appraiser to assess the value of your system when you receive an offer.
Buying a Home with Solar Panels: What to Ask
- What is the size of the system and how many kilowatt hours per year does it produce? You’ll first want to know about the size and production of the home’s solar panel system to understand the value it adds. How much of the home’s electricity does the system offset and what is the value of the electricity produced by the array?
- Which company installed the solar panel system? Is the company in business here in Colorado so you can talk to a local expert if you have questions? Do they have a robust service department to handle any needs over the lifespan of your system?
- Who manufactured the panels and what warranties are associated with the solar panel system? Many home solar arrays come with a warranty on the panels themselves along with a workmanship warranty from the company that installed the system. Make sure you know the warranties that come with the system and which companies are backing them.
- Are the panels owned or leased? Though it is less popular today, you’ll still find some leased solar panel systems out there. This means that a third party owns the panels themselves and the homeowner pays for the energy produced. When you buy a home with a leased system, the lease agreement needs to be transferred to the new property owner or one party needs to buy out the lease. Buying an owned system is much simpler because ownership transfers with the home, and you’ll see the full benefit of having solar on your home.
How long you plan to be in your current home doesn’t need to be a factor when deciding whether to install a home solar panel system or not. You can start enjoying the benefits of solar now and see your home’s value increase when it’s time to sell. Homebuyers are excited at the prospect of a home with little to no electricity bill, and they are willing to pay more for that benefit. Use these lists as a resource for buying or selling a home with solar panels, and also utilize your realtor and your solar installer as a resource for any questions you may have along the way.