Over the past 5 years, solar panels have become more prevalent in the Inland Empire in cities like Temecula, Murrieta, Riverside, Perris and Menifee but is solar worth it?. As a real estate broker, I have dealt with both buying and selling properties with solar panels. I thought it would be a good idea to give you my opinion on whether or not solar is worth it. I will also give a few real-life examples of situations that arose when buying or selling real estate with solar panels and the headache they can sometimes cause.
How Long Will You Live In Your House?
The average American lives in their home 7 to 10 years before they decide to sell. If you are thinking about putting solar in your home this needs to be in the back of your mind, before any decision-making takes place. Let’s say solar costs $30,000 to install which gives you a 0$ electricity bill every month. If you divide that up over a 10-year period, which is 120 months your monthly bill is going to be $250 a month. Even at 10 years it doesn’t look to have crazy savings.
Now what happens if your job moves after 3 years? What happens if you have a baby that you weren’t expecting and you need a bigger home? What happens if your neighbors are total assholes and you want to move? These are all questions that homeowners need to think about before investing a ton of money in solar panels.
You can’t predict the future and having a $30,000 solar system on your home that isn’t fully paid off will hurt you when you decide to sell. If you want a real-life example, in 2012 I listed at home that had previously put solar in 2 years before. The cost of the solar was $30,000 and his job was moving to another state. Potential buyers didn’t want that additional $30,000 price tag attached to the home. He had to pay off the solar in escrow for the new buyer, which ate his profit by $27,000. Great for the buyer, terrible for the seller. This brings me to my next point, which is.
Should I Buy A Home With Solar Panels?
If solar panels or having a solar home is important to you, I say go for it, just make sure you put yourself in the right situation when buying.
First, make sure the seller is willing to pay off the solar before the close of escrow if it is not already paid off.
Second, if you love the house and the seller is not willing to pay off the solar find out what is owed and weigh the pros and cons. Maybe $10,000 left on a solar loan might work for you?
I also wrote an article on “Should I Buy A Pool Home?” This is a great article from a value perspective and how to get the most bang for your buck if you want a pool
Word of Caution
You need to work with a lender that understands the loan process with an attached solar lien. I’m not going to get into to great detail, I am not a lender, but I can tell you some solar loan companies are next to impossible to work with. You don’t want to get two weeks through escrow and find there are issues in regards to loan positions or debt to income ratios.
Should I Put Solar Panels In the Home I Just Bought?
Personally, I wouldn’t. You don’t know the future and more likely than not you will be moving within 10 years. I just don’t think it’s worth the risk of shelling out 30 to $40,000 to save on your electricity bill for 3 years.
Do solar panels make my home more sellable?
I do think that a paid-off solar system on your home is a good selling point, but at what cost? Who wouldn’t want to purchase a home at market value and not have an electricity bill? In regards to value, and appraisal, I don’t often see solar panels giving many homes a boost in value. If your home has a market value of $400,000 and you put a $30,000 solar system in, don’t think that you’re home automatically jumps to a value of $430,000, that’s just not how it works. This could change in the future, but as of now putting a large value on solar just isn’t going to happen.
Companies and Solar Loans
The only thing I’m going to say about this topic is be very careful and do a ton of research before deciding on a Solar Company. Interest rates, workmanship, guarantees, and warranties are all things that you need to have in writing and be comfortable and confident with. Read the fine print, go with referral companies from friends or family and do your due diligence.
In 2017 I sold a few homes with solar, in this one particular case the property was in Eastvale, near Corona. The home was beautifully upgraded, single-story (rare) and we had over 40 showings in the first 3 weeks. It fell out of escrow twice because the buyers had second thoughts about paying extra for solar panels. The seller ended up having to pay off most of the solar loan, which cost them around $20,000 in equity from the sale. Hopefully, this blog post gave you some insight into the whole solar craze and whether or not it is right for you.
I am broker & owner at Greenleaf real estate in Southern California, if you have any questions or you are looking to purchase or sell property please reach out below and we’d be happy to help. My wife is also a certified residential appraiser. if you need a home value please click here http://exploringtemecula.com/order-an-appraisal/