Solar technology is a fantastic and fast-moving industry. Nationally there’s a desire to move from more traditional energy to renewable sources like solar. Who wouldn’t love a completely sustainable and off-the-grid electrical service? Plus, it’s supposed to save the planet and save homeowners some money. That’s a big claim, but is it grounded in reality? And are solar panels actually beneficial when selling your home?
Solar Panel FAQs Answered
Simply put, solar energy has abundant benefits. Water heaters can take a fraction of the time to warm water. Money can be saved. Plus, resources can be used much more efficiently. People feel good about their energy decisions, and in theory, everyone goes home happy. The catch is that solar panels are chiefly a good investment for someone wanting to stay in the house. And yet they can cause wrinkles when you go to sell a home, depending on the decisions you make when installing solar.
Q: Do solar panels attract buyers and are they a good investment?
Everyone likes it when a home features things that make everyday life easier and more economical. Many buyers appreciate that the environmentally and budget-friendly aspects of solar panels, along with the fact that they won’t have to worry about whether to install them later. One less project, one less thing to have to think about doing later on. The actual property value can also increase with the inclusion of solar panels. However, the amount can vary depending on the home, the area, and the size of the system. Check with a housing expert in your area to find out what solar panels can mean for a listing price, as some communities might see more of a demand.
Q: Can solar panel liens limit funding opportunities for buyers?
A: Yes and No
The warm fuzzy feeling of saving the planet is a bit dampened by the financial realities of solar technology, despite the added home value. Solar panels and electrical systems are neither cheap nor easy to install. Many well-meaning homeowners get liens on their house when financing and installing solar panels. In 2019, these costs could be upwards of $25,000 to $35,000. While the theory is that this will pay for itself and be a major draw for buyers, this isn’t always the case. Many lenders won’t fund a buyer when these liens are in place. And if there’s a lease, prospective buyers and their lenders will want to make sure they’re OK with all the terms.
Furthermore, once a home is purchased, it becomes the responsibility of the new homeowner to continue the payments, and if there’s a substantial amount left on the lease term and the cost of the lease isn’t sufficiently offset by the savings, then buyers may not be excited about the solar panels you added. It’s like running into an HOA fee they never anticipated. Buyers who purchase a home with a beautiful kitchen don’t expect to pay the contractor who remodeled it. So if you’re trying to sell them on the cost-savings of solar panels, they won’t be as convinced of the added value if the panels come with an additional monthly payment.
A saving grace for this energy movement is that the government wants to help. In California, homeowners can use tax credits to offset the cost of solar installation. These credits used to cover up to 26% of the total cost of installation, but starting on January 1, 2021, this switched to covering 22%. This credit goes down to 10% on January 1, 2022, and will eventually expire in December 2022. So if you’re a homeowner looking to take advantage of this, it’s best to act quickly. For more information or to get started with the process, please CLICK HERE. For more information on available programs in Long Beach, please visit the City of Long Beach website HERE.
Pro Tip: The HERO program is one way to get help installing solar panels on your home. However, this program comes with some serious caveats so it’s wise to fully understand it before making any major decisions. You can read more about this program HERE.
More Solar Panel Resources
For more technical information on solar panels, please check out the resources below.
Getting Better Every Day
Most people agree that solar energy will be useful and is a wise investment in the long run. What needs to catch up is how we finance, and how we view the financing of solar on properties. We need to create a more accessible way for homeowners to transfer financing to buyers.
If you’d like to discuss solar panels with an expert before installing them, please reach out to us. We can help you determine the resale value they will give your home and whether or not installation is the right move for you. To get in touch, please fill out the form below or give us a call at 562.896.2456.