Selling a Home with Solar Panels: What you Need to Know
Are you a parent with young ones and a growing family? You’re probably anticipating a move to a home with more bedrooms just around the corner.
Or, you’re not sure where your job will take you in the not-too-distant future. Maybe you’ll get to relocate and will need to buy a home in a different City or State.
Perhaps you’re nearing retirement age (or there already). What happens in 5 – 10 years when it’s time to downsize?
The home you’re in now might not be the home that you live in for the next 25 or more years. With your solar system lasting at least 25 years (and many functioning even after 40 years), the question you’re asking yourself is: is solar a worthwhile investment if I plan to move?
Should you still consider solar if you aren’t sure you’ll be in your home forever?
Homeowners reap many benefits from residential solar panels: they take advantage of the Federal Solar Investment Tax Credit, lower their electric bills, reduce their carbon footprint as well as their dependence on the utility grid.
What is one additional benefit that stands out? Homeowners increase property value significantly when they add solar panels.
As solar becomes more mainstream, real estate agents, appraisers, and homeowners are looking to understand more about what a solar energy system does to the value of a home. We’re glad others are asking this question too, which has resulted in several studies published on the topic.
- A recent report by Zillow shows that on a national average, homes with solar sold for 4.1% more than homes without solar. So by investing in solar, you’re both saving money now AND increasing the resale value of your home.
- The Berkeley National Laboratory & U.S Energy department (Appraising Into The Sun) found “strong, appraisal-based evidence of PV premiums in each of seven market areas in six states.“
- The Berkeley National Laboratory (Exploring California PV Home Premiums) concludes that “each 1-kW increase in size equates to a $5,911 higher Premium”
To date, much of the research on selling a home with solar panels comes from the West Coast. As a leader in the clean energy movement, the West Coast has more data to spare than the East. As the burgeoning solar movement intensifies, we will have more data to analyze here in the Midwest.
At Third Sun Kokosing Solar, we work with clients regularly who are either selling or purchasing homes with solar panels installed. And, in our experience, all parties have been happy with the results.
Return on Investment
You will reap the benefits of your solar energy system while you live in your home: taking the ITC, zero to low electric bills, sourcing clean energy, to name a few. But when it’s time to sell, solar brings more to a home purchase than any other home improvement:
- The return on investment is high for the purchasing homeowner, who benefits from reduced electric bills
- There is an environmental return on investment seen in the reduction of carbon emissions
- The return on investment on long-lasting solar equipment increases as traditional electric costs rise
- In some cases, existing solar installations get grandfathered into older and more lucrative Solar Renewable Energy Credit (SREC) plans that are no longer available. This makes the purchase even more valuable to the buyers.
Solar Stands Out
A solar energy array is an important marketing piece. With the rise of the eco-conscious consumer, solar will undoubtedly set your property apart when it’s time to sell. With a national fixation on the renewable energy movement– solar has become quite popular. Highlight the benefits, you know them better than most people!
And, be prepared to answer any questions potential buyers might ask: Who installed the solar? What is the size of the solar system? Do warranties still cover the equipment? Is the craftsmanship solid?
Take a look at the types of things a solar homebuyer is thinking about when looking at your solar home here.
Breaking Down The Math
As we mentioned earlier in this article, much of the data on the subject comes from the west coast. That’s an important nuance to keep in mind. Using Zillow’s 4.1% home value increase we broke down an example below.
If you are offsetting, say your $150 electric bill every month with that solar energy, you will break even (financially) somewhere between 5 and 6 years.
When It’s Time to Sell: Reach Out
At the end of the day, homebuyers will be thrilled by the prospect of purchasing a home with little to no electricity bill. They’re going to be willing to pay more for that benefit.
We recommend you work closely with your realtor and solar installer when it’s time to sell. Their expertise in their respective fields will help you reap the highest return on your investment.