Like any major home improvement project, going solar adds value to your home. In fact, according to a survey of nearly 4,000 solar home sales by the Lawrence Berkeley Laboratory (LBL), it adds an average premium of $15,000. That average dollar amount varies widely in practice however, and the premium a buyer will pay for a solar home depends on a range of factors specific to your installation.
By knowing in advance what buyers will be looking for, you can ensure that when you’re selling a home with solar panels, you get the maximum value – and minimize any potential complications in the sales process. In this post, we’ll give you an overview of the main factors that affect solar home sales and point you towards a great resource for further guidance.
Factors That Affect Selling a Home with Solar Panels
Solar adds value to your home because it saves money for you and subsequent homeowners. Compared to relying solely on your utility, average Mosaic customers save over $30,000 on their electricity bills over the life of their solar panels.
But what determines the likely value of future savings for your specific solar installation for a prospective homebuyer? There are a few pieces of information you need to provide in your listing to give potential buyers the confidence they need to pay the right premium for your solar panels.
- Make and Model of Equipment: Just like buying or selling a used car, different makes and models of solar panels will fetch more (or less) on the market. Panels with high efficiency ratings and brands with a reputation for durability will generally boost your home value more than less-efficient models produced by less-proven manufacturers.
- Generation and Cost Savings Data: Information on the monthly generation and electricity bill savings of your solar installation is critical to projecting future performance. In some areas, you’ll also want to include information on your net metering status; for example, in California, most installations after 2016 are compensated according to time-of-use (TOU) rates, while older installations are net metered with a flat retail rate.
- Warranty Status: Most solar panels will have product as well as performance warranties extending for 20 years or more, and potential buyers will want to know how many years are left on the warranty. They will also want to know whether or not the warranty is transferable to new owners, which is usually (though not always) the case.
- Financing: If you went solar with a loan or lease arrangement, you’ll want to be familiar with the loan or lease transfer process. Depending on the terms of your agreement regarding the transfer process, you may find it preferable to simply pay off the loan at the time of sale. Many borrowers leverage income from the home sale and arrange for the solar loan to be paid off at the close of escrow. Note that some loans and leases may assign prepayment penalties for paying off early, so be sure to check your agreement. There are no prepayment penalties for loans through Mosaic.
Getting Help With Solar Home Sales
If all this sounds complicated, don’t worry. As solar booms across America, selling a home with solar panels is becoming more and more common, and there are a growing number of real estate professionals that specialize in homes with solar as well as energy-efficient home improvements. In fact, Greg Field, a Solar Realtor in Phoenix with over 10 years of experience, has shared a great video with us to explain the ins and outs of various aspects of a solar home sale – check out his YouTube channel for more!
Want to learn more about going solar with a loan through Mosaic? Click here if you’re a homeowner – and click here if you’re a contractor interested in growing your business by offering simple, affordable financing options for solar as well as batteries.