When adding solar panels to your home, it’s always important to consider whether your investment is going to be returned if and when you decide to sell. Having solar does not always increase your home’s value, but there are times where it definitely can. Here’s our breakdown so you can determine whether solar is the right move for you or whether your current solar system could increase the value of your home.
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TimeFrame
If you’re thinking about adding solar panels to your home, but haven’t done so yet – be sure to keep in mind how long you plan to live there.
If you plan to live in your house a while, the panels may be more beneficial to you in the long run, but may not be as valuable when it comes time to sell, as the panels are not as efficient the older they get.
Buy or Lease?
Are you buying your solar panels or leasing them? This is important because when someone comes to buy your home, if they have to assume a lease for the solar panels, that could potentially deter them from the deal unless leasing Solar is something they were interested in to begin with.
If you own your solar panels, this may be more preferable to a buyer, depending on the age, quality, etc. of the panels themselves.
There are also options where your utility company may be using your roof and allow you to pay them for the power that you use (Tesla has a model like this). This is not considered a lease, but you also do not own the panels.
Will Solar Increase My Home’s Value?
We often get asked, “I paid this amount for my solar and got a tax benefit – my home must be worth more, right?” – not necessarily.
You’ll find that solar can sometimes add about 4% to a property’s value, but varies depending on the area you are in, whether you’re leasing or owning, condition of the roof, etc.
For example: In some areas of California, the increase is only 2.7% whereas San Francisco might be 4.4%.
What’s consistent is that if panels are leased, this is not typically favorable. There’s often no increased value to appraisal, although this could still be a benefit for a buyer to take on the lease if they want to be energy conscious and can save enough on their utility bills.
Age of Your Panels
The value of your solar panels greatly relies on the age of them. As solar panels age (which they typically only have about a 20 year lifespan to begin with), the efficiency declines.
The older your solar panels are, the higher possibility of a near future expense for buyers to update or replace.
Agreement & Contracts
As a home seller, it’s important to include all of the details of your lease agreement and contracts so that the buyers can evaluate this when it comes to purchasing your home.
You will also want to make this available to the appraiser so that they can incorporate that into your home’s value. If you can get an appraiser who is more knowledgeable on solar, even better (although many of them have education on solar in one form or another).
Value in Owning
If you own your solar panels, this can be a huge benefit, as there is no lease for the buyer to assume when they buy the house.
There may still be a bill from the utility company for the basic infrastructure costs, but this isn’t generally too high if there is one. This would also be something to disclose to the buyers.
Solar Companies
Just like any other industry, the company your panels are purchased through can change the value of your home both in monetary value, but also with the value from the buyer’s perspective.
Is the company you bought the panels through still in business? Is there a separate maintenance contract for them? Is the company a well known company like Tesla?
These are all questions to ask when considering buying solar, or selling your home that already has solar installed.
How’s Your Roof?
When your panels were put on, was the roof inspected? If so, be sure to have that handy for both the buyer and appraiser.
How old is your roof – and what is the condition of the roof currently?
Keep in mind that if the buyers need to repair the home after the fact, they will not only have to have the solar company remove the panels for the roofing company to do their job, but they will also have to come back and re-install them – which can increase the cost of the repair significantly from just a standard roof repair.
