BusinessHow do you sell or buy a home with solar panels?

How do you sell or buy a home with solar panels?

Buying or selling a home can be intimidating, with many factors to consider. If solar is involved, that can make the decision seem more complicated. Don’t worry—we’ll go over lots of scenarios to make sure you’re comfortable with your decision, and hopefully answer some of the questions you might have regarding buying or selling a home with solar.

Do solar panels raise your home value?

Yes! Solar panels raise the value of your home by an average of around 4%, according to a ,2019 study by Zillow. Other studies have even tied an average value increase per KWh your system can generate. But it can be a challenge to communicate that value add to buyers and agents who are unfamiliar with solar energy—even if you get a proper appraisal, to someone who doesn’t know the value of solar, your home might just look overpriced. So the short answer is yes, solar does raise the value of your home, but the longer answer is you may have some work to do in order to communicate the value, including talking about reduced monthly energy costs.

Selling a home with solar

Increasingly, a home with solar panels is becoming a desirable property for buyers as awareness and demand rises. If you have a motivated buyer who knows what to expect, the selling process should go smoothly. A lot depends, however, on the payment status of your PV system—selling a home with a system that’s paid off is much easier, since there’s no extra steps. If your system was financed, however, that’s a little more complicated.

Communication really is key. If you’re selling a home with solar, your potential buyers may need to be convinced of the benefits. Feel free to talk about what made you take the leap! Talk about your monthly savings, your freedom from increasing energy costs, your independence from fossil fuels, and anything else that the buyer might be interested in.

If you own your solar panels outright

This is the easiest scenario—the panels at this point are a part of the house, and a great bonus feature for any potential buyer. You can set your home value at a higher rate if you own the panels outright, as the buyer will likely pay more for your home now that it has solar. There’s evidence to suggest that your home will also sell quicker than a home without solar.

If you financed your solar panels

Most people who get solar for their home have financed their purchase. It allows a homeowner to benefit from solar power immediately while paying for the system over a longer time period. That’s great—but if you just got your panels installed in the last couple of years and suddenly you’re looking at selling your house, it can complicate things.

The easiest thing to do (in theory!) would be to pay off the remainder of your lease or loan, closing out financing on your system entirely. If you financed your solar panels with a secured loan like a home equity loan, you will have to pay off the loan before you can sell your house. Some mortgage lenders require the panels to be completely paid off to avoid the issues where the loan is defaulted on. This can be a big chunk to pay at once, but the good news is that once it’s paid off, the value goes into your home and you’ll likely recover what you spent when the home sells.

If you financed your panels through a lender specific to solar financing, it should be a smooth process. Most solar financing companies are ready to help, including the lenders we at Mālama Solar partner with. It introduces a step into the process, but in this scenario, the loan or the lease can be transferred to the new owner without penalty. Our customer service team is ready to help you and answer any questions you might have about the loan transfer process.

The more you communicate about this process and the ownership status of your panels, even in your home listing, the easier it’s likely to go. This shouldn’t scare away any serious buyer; they just need to know what they’re getting into. This can be a topic of discussion and negotiation in the selling process.

Buying a home with solar

You’ve found the perfect home and you’re about to put in an offer on it. Better yet, they have solar panels installed so your energy costs will be low! But you’re nervous, because you don’t know what’s involved with buying a home with solar, you’re not sure how to handle maintenance, and you’re wondering if it’s worth the hassle.

Good news—as long as you’re well-informed, it shouldn’t be a problem, and your new home will already be generating electricity for you when you move in!

The first thing you should ask about is the ownership status of the panels. If the solar panels are paid off, congratulations—your home buying process will be as smooth as any other. However, many if not most people have financed their solar panels. Don’t let that scare you off! If this is the case, you’ll either need to ask the seller if they’re willing to pay off the panels before you buy, or you’ll need to agree to taking on the loan and paying off the outstanding balance. That might sound intimidating, but remember—the solar panels will save you money every month, even if you’re taking on a new loan. People choose to finance their solar panels because even with a monthly payment, you’re paying less than a monthly utility bill would be, without being beholden to rising energy costs paid by customers fully on the grid.

If you want to learn more about the financials of solar and why it makes sense to make the switch, be sure to check out our ,blog post where we go into more detail.

Solar panels might be a small bump in the road, but with the right information, buying and selling a home with solar should be a positive experience for everyone involved.