Selling a Home with Solar Panels
GET A CASH OFFER NOW
GET A CASH OFFER NOW
From an A+ BBB rated business.
If you're a homeowner with solar panels installed on your house to reduce your environmental impact, utility bill, or both, here's what you need to know when you're ready to sell your home.
The good news is that solar panels can add value to your home and the reduced energy costs and environmental benefits are certainly a plus for attracting potential buyers. But selling a house with solar panels can also be complicated, and some factors must be considered.
Here’s what you need to know about selling a house with solar panels, including its benefits and drawbacks, potential challenges, and the steps you can take to ensure a smooth transaction.
Benefits of Selling a House with Solar Panels
If you currently have solar panels installed on your home, you already know the benefits it brings to your energy cost savings and reduced carbon footprint. But, when you put your home on the market, how would solar panels be seen by potential buyers?
Below are the advantages of selling a house with solar panels.
- Reduced Energy Costs: Solar panels save the average Texas household about $147 each month, or $1,764 annually, on their energy bills. And considering these significant savings, it could make the home more affordable to a larger pool of potential buyers.
- Increased Property Value: According to Appraisal Journal, for every $1 saved on your energy bill by having solar panels, it increases the value of your home by $20. So panels that save $200 per year would also add $4,000 to the home’s value.
- Positive Environmental Impact: It goes without saying that solar energy is an eco-friendly property feature, so solar panels appeal to buyers who are looking to reduce their carbon footprint.
- Potential for Faster Sale & Higher Selling Price: According to 2021 data from Rocket Homes, homes with solar panels spent 13.3% less time on the market. And according to Zillow, homes with solar panels sell for 4.1% more than those without them.
Potential Challenges of Selling a House with Solar Panels
The biggest challenge when selling a home with solar panels depends on whether the seller owns or leases their solar panel system.
Suppose the seller had paid in full for their solar panels, either upfront at the time of purchase or through financing over time. In that case, the solar panels can be figured into the home's appraised value, and the buyer takes over ownership of the solar panels along with the property.
If the panels are not owned outright when selling the property, then these are potential challenges that can be faced.
Financed Solar Panels
If you had financed your solar panels and the loan is not paid off when selling the home, you may be required to pay it off before the sale closes. This is because many solar panel companies that offer financing usually put a lien on the homeowner's title until the loan is paid back in full. And most mortgage lenders would also require the seller to pay off this loan, so the lien is removed before the buyer takes over ownership. Therefore, you may need to list the home at a higher asking price to cover the cost of paying off this balance.
Leased Solar Panels
If the solar panels are leased and the house sells before the end of the lease’s term, the seller and buyer would have to agree on how the lease will be handled. Based on the options in the contract with the solar panel company, the seller may be able to transfer the lease and payment responsibilities to the buyer. Other options may be that the seller could prepay the lease's remaining balance or purchase the solar panels free and clear. Then the new owner would not be responsible for these payments.
Steps to Take When Selling a House with Solar Panels
Solar panels can be a big selling point for a home and owners should be transparent with potential buyers on how much money they can expect to save on their energy bill, how the solar panels are maintained, their expected lifespan, and more. So when selling a home with solar panels, these are the recommend steps you can take.
- Gather Documentation: Collect all documentation related to your solar panel installation, including warranties, permits, and maintenance records.
- Highlight the Benefits: When communicating with potential buyers, emphasize the solar panels’ energy cost savings, environmental benefits, and how it increases the home's value.
- Work with an Informed Agent: Choose an agent knowledgeable about solar panels who can effectively market the home and educate potential buyers on its many benefits.
- Consult with Your Solar Panel Company: Talk to your solar panel installation company about options for transferring your contract to the next owner and any upgrades or maintenance that be necessary.
Understanding the benefits and potential challenges of selling a house with solar panels and taking the necessary steps to ensure a smooth sale can help you maximize the value of your home and attract the right buyers.
What happens to solar panels when you sell a house?
If the solar panels were paid in full by the seller, they are considered a fixture of the home and can be figured into the property's appraised value.
Can you sell a house with financed or leased solar panels?
Yes, but if the solar panels are financed, the seller would most likely have to pay off its balance in full before the sale closes.
If the solar panels are leased, the seller and buyer would have to agree on how the lease will be handled based on the lease terms. Either the seller transfers the lease to the buyer, the seller prepays the remainder of the lease balance, or the seller purchases the solar panels free and clear.
Is it harder to sell a house with solar panels?
The biggest challenge faced when selling a house with solar panels is based on if the seller owns the panels or if they were financed or leased. If the solar panels were financed, the seller would likely have to pay off the loan in full. If the panels were leased, then the seller and buyer would need to agree on how the lease will be handled.
Do houses with solar panels sell faster?
Yes, houses with solar panels have been shown to sell faster than homes without solar panels. Rocket Homes data shows that properties with solar panels spent 13.3% less time on the market.
Do houses with solar panels sell for more?
Yes, a home with solar panels has the potential to sell at a higher price. According to Zillow, homes with solar panels sold for 4.1% more than homes without them.