Solar panels are an investment in what is likely your most expensive asset – your home. They pay off quickly both in solar tax credits and energy savings. Homeowners want to reduce their impact on the environment, but money is important, too. What happens if you invest in a solar system then decide to move? Will you lose everything you’ve invested? Can you move your solar panels to your new home? Here is how to tell how much value you stand to gain from installing solar.
Solar Panels Save While You’re There
When you choose solar panels over traditional energy, you save money every day the sun comes up. Here are some of the benefits of solar panels:
- Make your own energy. Soak up sunlight and convert it to electricity. If the power goes out, access what you’ve stored.
- Save on taxes. Federal tax credits give you back 30% of what you invest in solar panels. Most states offer additional credits to help you save even more.
- Reduce electricity bills now and in the future. Not only will you save from generating your own electricity, you stabilize costs for your family. Energy rates go up by an average of 5.5% a year. Solar panels help you avoid rising costs.
- Receive credit from net metering. When your system soaks up excess energy, it gets fed into the grid and you get credit. When you need power later, you can draw the same amount.
Most investments take time to bring a return. As soon as you install solar panels, you start to see savings. Renovating your kitchen or adding landscaping may add value to your property, but the market is unpredictable. With solar panels, you are guaranteed tax credits and lower energy bills, so, even if you sell your home soon after installation, you get money back.
Solar Panels Raise Property Value
How much your home’s value increases depends on where you live. The National Renewable Energy Laboratory created a guide to help homeowners estimate how to factor solar panels into their asking price. Their study advises adding about $20 to the value of your home for every dollar you save in energy bills. Some factors include the following:
- Where your home is located.
- How many solar panels you have. The number and quality of solar PV panels affects your property value.
- Your home’s value based on other features. Extremely expensive homes may not receive as much of a boost as average priced homes since they appeal to a more limited range of buyers.
One study shows resale value increased by $5,911 per installed kilowatt hour. A home with three small one-kilowatt panels adds an estimated $17,773 to home value.
Solar panels may also help your home sell more quickly. A National Renewable Energy Laboratory study indicates solar homes are selling 20% faster than homes without them.
Talk to Your Realtor About Solar Panels
Since every area is different, you may need to update your real estate agent on the benefits of solar energy. Find out how much you can expect it to add to your asking price, then talk to your solar provider to decide if you would benefit from taking it with you.
Many solar providers offer a free assessment to help you decide whether you should relocate your solar system to your new home or sell it with the house. Gather information, then compare your options to see which makes the most sense.
What If You Lease Your Solar Panel System?
Some homeowners worry about signing a lease for solar equipment, thinking they might have a hard time finding buyers willing to take over the lease. A solar power purchase agreement (PPA) usually lasts for the average system life of between 20 and 25 years. If you have a PPA or a solar lease, you have two options if you decide to sell.
- You can buy out the rest of your lease. If you do, you own the equipment. You can move panels to your new home or sell them as part of the property. The new owner will not have any lease obligations.
- You can also have the new owner take over the lease and transfer the agreement to them.
Lawrence Berkeley National Laboratory studied California home sales involving a PPA or solar lease. Most of the time, new owners were willing to take over the lease and experience the energy savings the solar system delivered. Seventy-seven percent of leases transferred to the buyer.
If you plan to ask buyers to take over your lease, make sure you discuss it with your realtor. If you notify potential buyers in your listing, there won’t be any surprises before the sale.
What About Solar Loans?
Homeowners sometimes finance their solar systems through a solar loan. If you took out an unsecured loan to buy your system, you can sell your home and continue making payments throughout the term. However, if it was part of a home equity loan or line of credit, you’ll have to pay off the loan before your home can transfer to the new owner.
Questions to Ask When Buying a Home with Solar Panels
If you have the opportunity to buy a home with solar panels already installed, you can start enjoying them as soon as the utilities are transferred to your name. It’s better if the seller owns the panels or is paying for them with a solar loan because you won’t be responsible for a lease. Before you sign a contract, ask these questions.
- If solar panels are leased, how much is the monthly rate and when does the contract end?
- Who manufactured the solar panels? Panels made in the U.S. have strict standards and are protected by the Magnuson-Moss Warranty Act.
- Is net metering available from your solar provider?
- How much power do the panels generate? Ask to see past energy bills.
Saving with Solar Energy Always Makes Sense
If you’ve purchased solar panels for your home, you are likely already reaping the financial benefits and are interested in how to take your panels with you in the event of a move. For questions about whether your panels can move with you or how much a reinstall might cost, talk to a professional and learn your options. Chances are, there will be one that works for you.