Implications of Selling a House With Solar
- September 15, 2021
- Posted by: Glory Rivero
- Category: Blog
Is selling your house with solar panels easier or harder? The answer to that may vary depending on your location or how your system was purchased. There are multiple ways for an owner to purchase their system, cash, loan, lease, or power purchase agreement.
Solar may add tens of thousand of dollars to your homes sales price but may also add complications which can hurt your ability to sell or could possibly increase the length a time it takes to sale.
If you won your system, it is straight forward. It is similar to any other amenity, like a pool or air conditioning. It is included in the sales price and likely to add significant value.
A lease is slightly more complicated. In some cases, the new owner can’t afford to or is unwilling to add the additional expense to their overall housing costs. The owner can simply pay off the lease, if necessary. It may cost several to tens of thousand dollars to do this way. In areas that have higher home resale value it may not be a significant issue, but it In lower priced housing, it may be a more impactful or a limiting option.
The new owner may be willing to take over the lease. For it to happen, then new owners will need to meet the third party’s vendor credit requirements to qualify for the lease.
If the system is installed with a power purchase agreement (PPA), the actions are similar to a loan. In a PPA, a third-party vendor owns and operates the system on your roof and sell the electricity to you in a fixed rate in the same manner as an utility. In this case the current owner must either pay off the system and have the system removed or get it transferred to the new owner. The new owner would need to meet the vendor credit qualifications for the transfer.
If there is a secured loan on the system, such as an equity loan, the loan will need to be paid off prior to selling the house, as would anything else tied to this type of loan. An unsecured loan is simpler. You still need to pay it off, but not necessarily before you sell the house. In this case, you may use the funds from the house sell to pay it off.
If you are considering going solar, it is important to contemplate the various payment options. Your choice now can have an impact on selling your home later.
A principal at California Workforce Academy. Dave has over 30 years of experience working domestically and internationally on education and economic development projects in the field of sustainability, energy, agriculture, transportation, and water. Dave is a product of the College of Natural Resources at the University of California, Berkeley.