Your Guide To Buying A House That Has Solar Panels

When buying a new home you probably have a good idea what you’re looking for: square footage, a good location, maybe a big yard. While all these things are important, it can be easy to overlook other features that could be just as valuable in the long-run, like solar panels.

Solar panels create clean energy and can help power your home. A functioning solar panel system may add home value and, though an investment upfront, can save you money over time. All while supporting an eco-friendly lifestyle. 

The Pros And Cons Of Buying A House With Solar Panels

Deciding if buying a house with solar panels is a good fit all depends on your situation and unique tastes. Let’s explore the pros and cons to better gauge if a home with solar panels may be a worth investment for you.

Pros Of Buying A House With Solar Panels

Besides the novelty of buying a home with solar panels, having a system in place comes with plenty of advantages. Here are some of them.

Decreased Carbon Footprint

The benefits of buying a house with solar panels goes hand-in-hand with the pros of renewable energy. Solar panels produce renewable, or “clean,” energy – which is naturally sourced and regularly replenished.

Why is clean energy important? The alternative is the traditional electrical system, which can lead to harmful greenhouse gas emissions, hazardous waste and negative effects on local ecosystems. Meanwhile, the carbon footprint from solar panels is roughly 20 times less than that of its coal-powered counterpart.

Lower Electricity Bill

Having a lower electricity bill each month is another benefit you may be able to reap when your home has solar panels. According to ConsumerAffairs, your energy bill could be reduced by as much as 75%. Over a 20-year period, you could save $10,000 – $30,000, depending on your location and energy usage.

Less Grid Dependence

Having a home with solar panels reduces your dependency on the local power grid. This means no more racing to eat everything in the freezer after the power goes out. Grid independence is especially useful for homeowners in areas that experience frequent outages, like California, Texas or New York.

Increased Home Value

Although solar panels are a relatively new feature to find residentially, 2019 research found that having them actually increased home value. According to Zillow Economic Research, homes with solar panels sold for 4.1% more than those without. That’s an additional $9,274 for the median-valued home in the U.S.

Tax Breaks And Advantages

Owning a home with solar panels can come with an array of financial incentives, beyond lowering your electric bills. Here are some of them:

The number of programs and the types of incentives vary by state so check the Database of State Incentives for Renewables and Efficiency (DSIRE) to learn more about what’s offered in your area.

Cons Of Buying A House With Solar Panels

Before taking on the responsibility of buying a home with solar panels, there may be a few things to be mindful of.

System Financing

The best case scenario when it comes to buying a home with solar panels is that the seller has full ownership. This means you also get 100% ownership of the system, no strings attached. If the seller’s solar panel system is leased or tied to a solar power purchase agreement (PPA), you’ll be taking on monthly payments.

Ask questions to understand what the financing looks like, whether payments are fixed or variable and how much you can expect to pay in premiums.

Weather Dependency

It might sound obvious, but solar panels are dependent on the sun. This means periods of cloudiness or gloomy weather can affect your system’s efficiency and how much energy you’re actually getting. You should also expect less output during the winter as days become shorter.

Roof Replacement And Repair Costs

Solar panel installation is pricey. So, buy a home with solar panels already installed. Easy, right? Not exactly. While buying a house with a solar panel system in place increases your odds of avoiding lofty installation fees, if your roof gets damaged or you need a replacement, you’re going to need some serious cash ready for reinstallation. Solar panel installation costs vary by region, wattage, material and more, but according to HomeAdvisor, averages $25,815.

What Should You Know About Buying A House With Solar Panels?

As we touched on earlier, solar panel systems – and who owns them – can affect your home buying process. Here are some more details to know what to expect in each situation.

Buying A Home With Owned Solar Panels

The only real downside to buying a home with owned solar panels is that the added value may drive up the purchase price. There could also be more competition for the house you have your eye on, but you won’t have to make any monthly payments or deal with the cost of installation.

Buying A House With Leased Solar Panels

When buying a house with leased solar panels, you’ll need to ask some questions and understand what you’re getting into. Leases can complicate the transaction, especially if there are any liens from the manufacturer. In some cases, solar panel manufacturers may uninstall the system entirely to remove a lien before the time of closing.

Familiarize yourself with the solar lease agreement to decide if you want the payments and contract transferred to you. You can also negotiate with your seller and may be able to buy your way out of the lease.

Questions To Ask When Buying A House With Solar Panels

When buying a house with any kind of unique feature, it’s important to ask the right questions. Here are some to ask before deciding to buy a house with solar panels.

Who installed the solar panels?

You wouldn’t want an uncertified electrician or a novice carpenter working on your home, and the same goes for solar panel servicers. Confirm that a reputable company carried out the installation before closing. You should also ask about existing warranties or maintenance plans so that you can have them transferred in your name before completing the sale.

What if I’m buying a house with solar panels financed through PACE or Solar Loans?

Unlike solar loans, PACE-financing is attached to a specific property, not a borrower. Through it, payments are made via property taxes, meaning they become your responsibility when buying a home that has PACE financing.

What incentives are involved when buying a house with solar panels?

In addition to the rebates, tax credits or tax exemptions you may be eligible for, owning a home with solar panels allows you to try out net metering. Net metering lets homeowners sell excess electricity back into the grid. Laws and regulations surrounding how net metering is carried out varies greatly by area, so research is vital to understanding the financial gains.

Your state might use SREC credits or performance-based incentives (PBIs), which pay you a per kilowatt-hour credit. Either way, net metering will allow you to rely on grid energy at a discounted rate should you need some in the future.

Will solar panels save me money?

Whether solar panels will save you money – and just how much – all depends on numerous factors like location, sun exposure, your energy usage, state incentives and more.

The Bottom Line: Consider Buying A House With Solar Panels Already Installed

For some home buyers a backyard pool is an enticing asset that could equate to plentiful memories down the line. For others, it could be adding unwanted value to an otherwise inexpensive home. The same goes for buying a house with solar panels.

Just how much you’ll get out of owning and operating a solar panel system all depends on your homeownership goals and values. Inheriting monthly payments or applying for net metering isn’t for everyone. But if solar panels are just something that you’ve never considered, you may want to look further into the financial incentives and advantages of clean energy.

Feel ready to start browsing some eco-friendly homes? Explore loan options and kick off your home buying journey.