Steps to selling a solar powered home

staff reportsApril 4, 2019 1086 0

Don, a resident of New Jersey, had a dilemma he was facing.

“I installed solar a little more than a year ago and I fully own the system. I am most likely selling my home and moving to CT (Connecticut) and I'm trying to figure out the best way to recoup some of my solar investment,” he wrote on an online forum recently.

He said one of the options he had was to sell everything (solar and SRECs) to the new buyer. Another option was selling the solar, but retaining the SREC payouts.

With more than a million solar energy systems installed on residential rooftops across the country, buying or selling a solar home is getting more and more common.

In California most new homes and multi-family residential buildings up to three stories high will include solar rooftop panels beginning in 2020.
Solar homes sell for more money

According to the Department of Energy, a study by the Berkeley National Laboratory found that solar panels are viewed as upgrades, just like a renovated kitchen or a finished basement, and home buyers across the country have been willing to pay a premium of about $15,000 for a home with an average-sized solar array. As for third-party owned systems, it appears that the impact is largely neutral but can occasionally add value, especially for prepaid leases. 

But what happens when you decide to move? It is a question that baffles those who have made the investment of installing home solar energy panels to reduce their electricity bills and maximize their renewable energy production.

If you’re moving to a new property close by, you may be able to move the solar panels and equipment to the other home within the same utility area. But you will likely have to pay for this additional moving cost our of your packet.

But if the move is outside the area, or out of state, more than likely you won’t bother dislodging all of the solar equipment and taking it with you.

Another issue is how to properly value the additional cost to the price of a home with solar energy.

If you're leasing

If you lease the solar energy system, selling the home with it may get more tricky, as there are several scenarios, notes Solar Rights Alliance.       

      1.  Your buyer may need to meet the solar leasing company’s credit requirements and be willing to assume the lease agreement and payments.

      2.  You may be able to move the solar panels to your new home particularly if you are moving to a home within the same utility area. However this would most likely be at your expense.

      3. You may be able to pay off the lease and transfer the solar rights to the new homebuyer.

      4. You may be able to buy-out your lease from the provider. This could result in additional value to your home.

If you own the solar energy system

If you own the solar panels and other energy equipment in your house, this will increase the value of the residence. Make sure the system is working properly and there are no problems with it. 

An article in Investopedia notes that “buying a home with solar already installed means the investment is financed (for the homebuyer) through the mortgage. This ease of financing potentially makes solar more affordable for a homebuyer than buying a house without solar and subsequently adding a solar array”.

You should also get a proper estimate of your solar system. 

The Appraisal Institute has a number of tools to help with this. One of them is the "Residential Green and Energy Efficient Addendum", an addendum that gives appraisers additional space to account for green technologies and advancements in the home (including solar panels) and that can be attached to a standard appraiser.

They also have a free online calculator called the PV Value® Photovoltaic Energy Valuation Model, which uses the income approach to determine the future value of a rooftop solar system, and allows appraisers to adjust for multiple factors to arrive at a reasonable valuation. 

Another good option is to look for a real estate agent familiar with rooftop solar panels and share with him/her about six months of electricity bills. 

If you’re still paying for residential solar panels and equipment, you will have to pay off the balance if the new owner does not want to take over the loan.

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