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Selling a House with Solar Panels

By Benjamin Strusnik June 15, 2022

selling a house with solar panels

Installing solar panels in your home adds value to it, making it desirable to would-be buyers who fancy a more energy-efficient home. This is not always the case, however. 

In some scenarios, your solar panels can make the process of selling your home a bit more complicated. Most of these complications arise from issues relating to the ownership status of the panels, and how they were financed.

If you want to set up solar panels to run the television and lights in your home, read this article to familiarize yourself with everything you need to know.

Do Solar Panels Make It Harder to Sell a House?

Types of Solar Panel Financing

Solar panels can power an entire home or simply take off some of the pressure from your monthly electric bills. But you need to take some factors into consideration when selling a home with a solar installation. 

When it comes to owning a solar power system, there are 3 common ways people go about purchasing solar for their home. Knowing the differences and what they entail may be essential if you’re planning on selling a home with solar panels.

do solar panels make it harder to sell house

Solar Lease or Power Purchase Agreement (PPA)

A solar lease is a financial agreement that allows homeowners to have solar panels installed in their home by a solar leasing company, and then pay them off over a certain amount of time instead of purchasing them outright.

This allows the homeowner to reap the benefits of sustainable energy without having to pay what could be a large initial fee for some.

A PPA is nearly identical to a solar lease, except the solar company only charges you for the electricity you use.

Solar leasing companies take care of any necessary maintenance, provide insurance for your panels, and even offer a refund if the panels do not perform at their predetermined efficiency level. They are also in charge of monitoring the system.

With a solar lease, the panels you install on your home are only truly yours once the lease has been paid in full. Until then it remains under the ownership of a third party, which could make selling your home a bit tricky.

Your solar panels being owned by a third party would also prevent you from receiving the financial benefits of solar, such as the 30% federal solar tax credit among other incentives.

Solar Loan

With a solar loan, money is borrowed from either a bank or solar company with the sole intention of purchasing a solar panel system.

Unlike with a solar lease, you’re receiving money instead of the solar power system itself. The money you lend allows you to purchase the solar panels by yourself, which would put the system under your direct ownership instead of a third party’s.

is it hart to sell a house with solar panels

This is a key point when distinguishing between a solar lease and a solar loan. With full ownership of your solar panels, you would be eligible for all the credit and rebates that come with owning a solar home. It makes the process of selling your home less troublesome as well.

Additionally, thanks to zero down solar (a payment system that allows you to install solar without a down payment), you can have the solar power system installed with no upfront payment necessary. This allows you to start saving money right from the get-go. Granted, you’d still be paying the monthly fee.

Zero down solar is applicable for solar leases as well.

Cash Payment

The most straightforward method to getting solar for your home would be through an upfront cash payment.

With an upfront cash payment, there’s no third-party involvement and the solar panels are under your complete ownership. This means that you’re eligible to receive the financial benefits of solar. Also, with no third-party involvement, selling your solar-powered home comes with no contractual complications.

Financing the panels yourself ensures that you receive a full return on your investment through the money you save on electricity throughout the solar panel's lifespan.

The downside to this is the cost of solar panels. But nowadays solar energy has gotten and continues to get more affordable, and despite the price can still seem pretty high for a lot of people, it would not take too long for solar panels to pay for themselves.

do solar panels make it difficult to sell house

If your home is in a good state for solar panels, this is the option you probably want to go for.

What to Expect When Selling a House with Solar Panels

Depending on the ownership status of your panels, some steps need to be taken to make the process of selling your solar home run smoothly.

Most of these factors are unique to selling a house, as apartments with solar panels are normally mediated through a third party.

Selling a House with Leased Solar Panels

If you’re selling your solar home after you’ve already paid the solar lease in full, it comes with no added complications because the solar panels are your property.

If you want to sell your solar home while the lease is still active, you won’t be able to get the solar panels appraised as a part of your property because they would technically be the possession of a third party. There are two ways to go about selling a home with leased panels.

do solar panels make it harder to sell a house

One option is to transfer the remainder of the lease to the new homeowner. Finding a buyer who’s willing to take on the extra expenses might not be a simple task, but with the growing popularity of renewable energy, it’s not entirely unlikely.

Another option is to pay off the rest of the lease in full. This places the solar power system under your ownership which allows it to be appraised as a part of your property, increasing the selling price of your home.

Selling a House with Solar Panels Purchased via Solar Loan

Purchasing a solar power system by taking out a solar loan means you own the system and can sell it as property along with your home. The problem with this arrangement lies with the loan itself.

If you took out a secured loan with your house as collateral, you would need to pay off the loan first before selling your home.

When it comes to unsecured loans, you can sell your home even if it hasn’t been paid in full. The catch with this, however, is that you’d still need to pay for the loan even though you're not making use of the solar panels.

Selling a House with Solar Panels Purchased via Cash Payment

You’re unlikely to face any complications when selling a home with solar panels purchased through upfront payment.

do solar panels make it difficult to sell a house

When it comes to solar panels, you would just need to make sure their market value has been appropriately calculated by the real-estate agents. This can be done through the Multiple Listing Service (MLS).

The multiple listing service is a real-estate organization that assists in the buying and selling of a home. The MLS has included a home's energy-efficiency and environmentally-friendly features as a part of a home's appraisal, allowing the panels to increase the home's value.

Additionally, any receipts and documents regarding your solar panels are important for selling your home, regardless of the nature of their ownership.

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