As the popularity of home solar photovoltaic (PV) systems continues to rise, real estate industries are recognizing new advancements and applying new techniques to value homes with solar. When considering whether to install a solar PV system on your rooftop, you may wonder how this could affect the home’s selling process. Here is a brief guide on how to sell a house with solar.
Selling a home with owned solar panels is a straightforward process that is much less difficult than you might expect! The first question that many people have is what installing a solar system will do to the resale value of a home. So let’s begin with answering that question.
Valuing a home solar system
Studies show that homes with owned solar systems sell at higher rates than non-solar homes. They are also selling more quickly! Many factors influence this increase, like the age and size of the system, as well as the energy output. Some solar panels will be of higher quality than others. This is why appraisers value each system individually. There are tools released by The Appraisal Institute that help buyers and sellers through the process.
Firstly, the “Residential Green and Energy Efficient Addendum.” This allows appraisers to account for several green technologies, including solar panels. There is also a free online calculator, designed by Sandia National Laboratories and the Department of Energy, called PV Value® Photovoltaic Energy Valuation Model. Determining the value of a solar PV system by utilizing the income approach, this tool assists appraisers in applying multiple factors to the home value.
One of the most important things to consider when purchasing your solar PV system is ownership of the system. This sounds obvious, but a solar installation on the roof of a house does not necessarily mean the homeowner owns it. Ownership is wholly determined by how the system was purchased.
An upfront cash payment is the most simple scenario of ownership. A solar system purchased with cash is considered a fixture of the home and can be appraised directly in conjunction with the home’s value. Homebuyers are consistently willing to pay a premium for a home powered by solar energy! This scenario also applies to a rooftop solar system purchased with a solar loan that is paid in full.
When purchasing solar panels through a solar loan, the premium paid by the homebuyer could offset whatever portion of this loan remains. This occurs while still creating a profit for the seller.
Opportunities for selling a home with a solar system purchased through a loan can vary depending on the means of financing. Solar lenders usually allow the homeowner to claim ownership while still making payments. If you finance your solar system with an unsecured loan, there are no holds over your property. Additionally, it is possible to sell before paying off the system. However, you are still responsible for paying off the loan! Premiums paid on solar homes help to alleviate any remaining balance, and conceivably, you could still make a profit!
When financing through a secured or home equity loan, a lender may put a lien on your house, using it as collateral for the loan. In this case, you will need to pay the loan in full before selling the home.
Why let the anticipation of a future move hold you back from investing in solar? Start saving now and take advantage of all the great incentives available. Going solar is a wise financial decision, even if you don’t plan to stay in your home for the entirety of your solar PV system’s lifespan! Be sure to go over your options with your solar consultant and ask them for advice on finding the right realtor when the time comes!
Interested in going solar? Request your no-cost consultation today!