In the home-buying process, you might have specific things on your checklist. For example; the number of bedrooms, size of the yard, and geographic location.
What about purchasing a home equipped with solar panels? How do you make a final decision if you want to buy a property with solar panels or are unsure if you should buy a home with solar panels at all?
Residential solar power is becoming increasingly popular, and because it is now being integrated into new construction homes, you may one day consider purchasing a home with solar panels. It is critical that you, as the possible new owner, be completely informed of all you need to consider before purchasing a property with solar panels already placed on the roof.
Here's what you need to know if you want to be ahead of the curve and buy a property with solar panels.
When viewing a solar-paneled home, make sure to ask the following questions.
Who is the owner?
While you may believe that buying a house entails purchasing every component, this is not necessarily the case with solar panels. In certain circumstances, the owner of the residence pays the company that owns the panels through a leasing arrangement. In most situations, roughly 25% of residences contain third-party-owned solar panels, which means the homeowner pays a charge to utilize them.
You should inquire whether the vendor owns the solar system outright or whether they are required to take over a lease. If there is a lease, you should read the terms to ensure you understand the fees and any possibilities for terminating the lease.
Who did the solar panel installation?
Check to see if the solar panels were installed by a licensed technician. There are several self-installation kits available for DIY homeowners who aren't scared to climb on their roofs. However, if the homeowner (or any non-professional) installs them, the panels may not be covered by a warranty if the equipment fails.
What is the roof's condition?
When making a house purchase, you want to know how the roof is. The situation becomes much more important when the roof has solar panels. If the roof is in poor condition, the panels must be removed and replaced before the roof can be restored or rebuilt. This can increase the difficulty, expense, and duration of any renovation.
What kind of maintenance will be required?
Solar panels, like everything else in your house, may need to be cleaned or maintained from time to time to ensure they are in the best possible condition. If you buy the system in an area with adequate rainfall, you will not have to worry about it for years. Cleaning depending on local conditions isn't a terrible idea in locations with more dust and less rain but should be done by an installation or other expert trained to be on a roof safely.
You will not be responsible for the maintenance if you do not own the panels entirely. If you have a lease, you most certainly have a performance guarantee, which means that unless the system performs to a specific level, your lease payments will be reduced. As a result, the leasing company is responsible for the maintenance.
The primary reason you're purchasing a home with solar panels is to meet the majority, if not all, of your home's energy requirements. As a result, you'll need to examine the normal consumption of the property and compare it to the typical solar output. You may acquire data from the previous year from the vendor, and you can also use the National Renewable Energy Laboratory's calculator to get an idea of how much energy you can anticipate creating based on location and system type.
After you've determined how much of your personal energy demands will be met by the output of the solar panels, you'll want to know what you can do with any excess energy. Net metering, which includes selling excess energy to other customers in need, might offer you additional financial benefits. This depends on where the house is located (As a starting point, the SEIA provides a map of states having net metering regulations in effect). Make sure to consult with your real estate agent to determine whether net metering is an option for you.
What is the production guarantee?
Aside from learning if you can gain if your system generates more than you require, you should also understand what will happen if it produces less. Most companies provide production guarantees, which reimburse you a set amount if the system fails to deliver. For instance, you may be guaranteed 12,000 kilowatt-hours each year. If the system only generates 9,500-kilowatt hours, the corporation may be forced to pay you. Examine the contract to see whether any assurances are provided.
As a buyer, you may come across a variety of solar panel financing options.
For example, you might consider purchasing a home with fully owned solar panels, a home with leased solar panels, solar panels financed through a solar loan, or solar panels financed through Property Assessed Clean Energy (PACE).
Let's go over how each of these financing options could affect your purchase.
Purchasing a Home with Fully Owned Solar Panels
If you're searching for a house with solar panels, a house with a completely owned system is the greatest option. Because the previous owner purchased the panels in advance, the seller owns them completely when they acquire the house.
When you purchase a house with solar panels, you avoid the hefty upfront expenses of the panels and installation, as well as the monthly charge to a third party, which is the case when leasing solar panels. When you own the solar panels on your home altogether, you save money on power bills without incurring any further monthly expenses.
However, because solar panels often add value to property purchases, the buyer will most likely be required to pay extra for the home. Nevertheless, you should be able to keep this value when you sell the house at some time.
Purchasing a Home with Leased Solar Panels
Purchasing a property with leased solar panels may be a perfect choice for your needs. However, taking out a solar lease might be difficult since it requires the homeowner to transfer monthly payments to the business that installed the solar equipment.
If the property you want to buy contains a solar panel system that is leased, you should discover more about the lease conditions. Learn everything you can about the leasing contract and transaction. Feel free to inquire about the system's monthly fees and whether or not payments will grow.
If you agree with the lease conditions and your personal financial status can support a solar system lease, the solar firm will easily transfer your name to the lease once you pass the credit check. If you are unsatisfied with the present lease, you may be able to negotiate with the prior owner to compensate you or pay off the balance of the lease.
Another item to look for is solar panel liens. Depending on how you financed the panels, the manufacturer may have put a lien or a Uniform Commercial Code filing on the property to ensure you continue to pay for them. A lien is a claim made against the property that can cause issues for both the buyer and seller. In the event of a sale, many solar panel manufacturers will be able to remove the lien and completely reinstall the system. Your solar panel leasing contract cannot also include any conditions that conflict with the mortgage, such as stipulations that prevent the property from being sold.
When you purchase a home equipped with solar panels, you may save money on power costs while also helping the environment. However, each solar panel system is unique, with various production guarantees, lease agreements, and other factors to consider. It may make financing and closing more difficult. Do your research beforehand to ensure you understand what's on your roof - and that the panels give a great experience for your life, your wallet, and the earth.