So you want to switch to solar energy but you are not sure that your current home will be your ‘forever home’. Will solar panels on your roof be of benefit to you when it comes time to sell your house? When it comes to listing your home for sale, there are several factors that affect property value; the price of comparable homes in your area, the home’s age and condition, and the state of the housing market are just a few. Does it make a difference if the home is powered by clean energy?
Solar adds great marketability to your home, especially if the solar is owned. Studies show that more consumers are now considering sustainability and energy efficiency when shopping for a home. According to the National Renewable Energy Laboratory (NREL), every dollar saved in annual utility bills increases a home’s value by $20. One of the most obvious benefits of a home with solar panels is energy independence. A home with solar is a home that comes with little to no payment to the utility company. A home with solar plus storage provides even more energy security with electricity stored in your solar battery allowing you to keep the lights on regardless of grid outages. It also means the homeowner is powering their home with clean solar energy day or night. With the average U.S. home electric bill being $122 per month, solar can save a homeowner more than $40,000 over the duration of the solar system’s lifetime (roughly 25-30 years before noticeable degradation).
A national study by Zillow found that homes with owned solar systems sold for 4.1% more on average than comparable homes without solar. The reason for this is largely because homebuyers consider the future energy savings worth spending slightly more upfront. However, this varies by market. Residents who live in states with minor to no solar market growth may not benefit as much from boosted home values meaning some markets may see more or less value-added.
The good news locally is that in New Mexico, even if solar increases the value of your home, that extra value is exempt from property taxes. That’s great news for homeowners who go solar – you get the financial benefits of generating your own power, without having to worry about a higher tax bill.
An owned solar energy system is a powerful selling point when listing your home and can be an advantage to environmentally and financially conscious homebuyers.
Selling a home with solar
The most straightforward way of including solar panels in your home sale is if you own the solar panels outright. This is the simplest way to go about the transfer of ownership as the seller is the legal owner of the system and the panels are fully paid off. This also offers ease in the transfer of all warranties involved. Since the system is owned, it conveys to the next owner just like any appliance would.
Most solar loans, including from our partner lender, Nusenda Credit Union, are not going to be assumable by the buyer of your home. Whatever balance remains on the loan at the time of the home’s sale, will be paid off by the seller before closing, or at closing from the proceeds of the sale. The good news is that the buyer gets a home with its own power plant producing (usually) all or nearly all the home's energy needs going forward at almost no monthly cost; who wouldn’t enjoy low, predictable energy costs?
Leased panels, which Positive Energy Solar does not offer, can often transfer to the next buyer but different companies may have unique requirements for how that transfer occurs. Some companies will say that the buyer simply needs to credit qualify to take on the lease. Other solar companies may offer a fee to transfer the lease to the next buyer. In most cases, the buyer of the home will not have the option to purchase the leased panels and must instead continue the lease payments where the previous homeowner left off; you may have even heard about instances of leased solar panels killing a real estate deal.
Bottom line: As you can see, there are major differences between selling a home with leased solar panels compared to a solar system you own, including the potential for solar panels to increase your home's value. Solar, especially owned solar, can increase the value of your home. Solar energy implementation continues to grow in popularity and 1 in 4 homes are expected to have solar panels installed by 2030. That means solar powered homes are increasing in number by the day which leads to a stronger solar market and therefore, the likelihood of increased home value.
Considering making the switch to clean solar energy? Tax incentives are better than ever. Request a proposal from Positive Energy Solar today!