Are you planning to buy a home with pre-installed solar panels? If so, you may be asking yourself, should I buy a house with solar panels and whether it will be a good decision for the future? On the other hand, you must also worry about the finances, and question what the decision will entail for your property value, ownership expenses, and maintenance commitment in the long run. More residences with solar panels have appeared around the country as solar power installation prices have reduced and the popularity of solar electricity has grown. Here are a few things that you should know before making the decision of buying a house with solar panels already installed.
Are you Buying a House with Solar Panels Already Installed?
Buying a house with solar panels already installed can be a big decision for many new home buyers. But it can be tricky as there are multiple things that you should know about. From the price increase due to the panels to the higher taxation and net metering, there are several technicalities that a buyer should be aware of. One of the key things about buying a solar panel installed home, is to understand the ownership of the panels, whether they are leased or owned. Other than that, ask about the manufacturer, installer, and warranty left on the panels. Following is a rundown of everything that you should know before buying a house with solar panels installed.
Should I Buy a House with Solar Panels?
Just as long as the solar panels are owned instead of being leased, purchasing a house with solar panels is a wise choice. In addition to lowering your energy costs, installing solar panels on your house will increase its value and appeal as a potential resale item.
1. Leased Solar Panels
If solar panels were put on a property under a lease, the homeowner would be responsible for making monthly payments to the leasing firm. For the majority of new homeowners, this might be a tricky decision because there are several things to consider regarding the lease agreement and liens before buying the home.
It’s crucial to find out more details regarding the lease conditions if you are planning on buying a house with solar panels already installed. Learn as much as you can about the leasing agreement and arrangement. You should inquire about the system’s monthly costs and whether or not payments will increase.
If new homeowners don’t like the terms of the present lease, they might be able to work out a deal with the prior owner to get them to pay off the remaining lease or provide compensation. Also, the solar company may quickly add the buyer’s name to the lease once they pass the credit check once they’re happy with the lease conditions and their financial position allows them to lease a solar system.
Also, check for liens. Liens are claims made against the property that might cause issues for the seller as well as the buyer. In the event of a sale, many solar panel companies will have the opportunity to lift the lien and completely deinstall the system. Depending on how one has paid for the panels, the manufacturer could have put a lien on the home to ensure that they don’t stop paying for them.
2. Owned Solar Panels
If a new home buyer is seeking expressly a property with solar panels, purchasing a property with a fully owned system is the best option. When buying a house with solar panels already installed, one avoids the high upfront expenses of the panels and installation, as well as paying a monthly charge to a third party, which is the case with leasing solar panels. When house purchasers own the solar panels on their property altogether, they save money on power bills while incurring no further monthly fees.
But, bear in mind that the solar panels will almost certainly force the buyer to pay extra for the house because, as previously said, solar panels often add value to home purchases. But on the brighter side, the value of the house you pay for will be retained for the long term, so that in case you need to sell the house in the future, you can get a good price on it.
There are two other options as well, in which homeowners have bought the panels on a solar loan or if the panels are PACE financed.
You don’t have to worry about paying extra monthly payments if you want to buy a property with solar panels funded by a solar loan. In contrast to a lease, if a homeowner sets solar equipment using a solar loan, the debt is always the homeowner’s duty.
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Questions to Ask When Buying a House with Solar Panels?
If you’re considering buying a house, make sure to ask the homeowner the questions to ask when buying a house with solar panels:
1. Who is the Manufacturer of the Solar Panels?
Inquiring as to who built the solar panels can throw light on possible warranties and provide valuable insight into how long the system will be protected. It will also provide an overall impression of the quality, market reputation, and what previous customers have said about identical solar panels.
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2. Are the Solar Panels Owned or Leased?
It is preferable for purchasers if the system is owned since it means they will own it outright after acquiring the house and will not have to incur additional costs for it. Buying a house with a leased system, on the other hand, is a little more difficult. Some solar leases involve growing payments that may increase the buyer’s debt-to-income ratio, so carefully read the contract before buying a house with solar panels already installed.
3. Who has Installed the Solar Panels?
Several solar installers provide work warranties after installing the panels. It’s a good idea to chat with the home seller and find out whose business installed the solar panels so that you can understand all the different types of warranties available to you and know who to contact if something goes wrong with the system.
4. What is the Scale of the Solar Panels Installed in the House?
Understanding the size of the solar panel system is critical since it will help you decide how much power consumption the system can offset and how much money you will save on the energy bill.
5. Is there Net Metering Possible on the System?
Certain solar owners may be qualified for net metering, which lets you sell the surplus power generated by the solar panels back to the grid, depending on your house location and utility company. This is another item to discuss with the vendor since it will help you determine how much you may save on the monthly energy cost.
6. Is there an Outstanding Loan on the Solar Panels?
Always ask if there is any outstanding loan on the solar panels that are installed. The seller must pay off any remaining debt at closing for a home solar system to be fully recognized in the property’s worth and to transition the property to a new owner. Above mentioned are some of the crucial questions to ask when buying a house with solar panels.
7. Are Any of the Panels or the Inverters Replaced in the Past?
Ask the homeowner if any of the solar panel has ever been changed and what was the reason for the same. Also, ask about the inverter used in the home. Solar panels provide changeable direct current (DC), that an inverter converts to alternating current (AC) for usage at home. Inverters come in a variety of shapes and sizes. Inverters typically need to be changed more frequently than solar panels. Therefore, ask if there have been any issues with the inverter and if it was replaced in the last few years before buying a house with solar panels already installed.
8. What is the Average Energy Bill?
Inquire about the current bill the homeowner pays every month. Depending on the number of individuals who live in the house, how much time they spend there, and other circumstances, you can consume more or less energy. As a result, the monthly bill will differ from that of the current owner. Even so, knowing how much energy your home uses daily might be beneficial.
9. When Were the Solar Panels Last Inspected?
Make sure that the solar panels are inspected from time to time during the period of installing the panels to date. Along with informing the seller about the current state of the system, you might want to bring in your private solar inspector and have them analyze the system even during the inspection period, which is a usual contract contingency in most sales contracts.
10. How Much Warranty is Left?
Solar panel manufacturers typically provide a guarantee of 20-25 years. But, before purchasing a home with a solar system, make sure to verify the guarantee on the solar panels. It assists you in ensuring that your solar system is free of flaws and provides you with the most value for your money.
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What are Pros And Cons of Buying a House with Solar Panels?
Following are some of the pros and cons of buying a house with solar panels that you should weigh properly before signing the papers.
Buying a house with pre-installed solar panels has the following pros.
1) Save on Energy Bills: Usually, residences can benefit from solar panels as an alternative or complement to purchasing electricity from the grid. With electricity costs on the increase, homeowners can save a significant amount on regular power bills by putting money in a home with solar panels installed.
2) Low Cost of Maintenance: A solar panel system doesn’t need much upkeep once installed as long as it is not influenced by environmental variables. If panels are maintained clean and free of dirt, they should last for many years with no more intervention from the consumer.
3) Bringing a Change: Fossil fuel is a finite resource that, when used to generate energy, emits toxic pollutants into our atmosphere. Solar energy has the potential to reduce our reliance on fossil fuels and our environmental effects. Thus, you can say that by buying a house with solar panels already installed, you are making a significant difference for the environment and future generations.
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Despite the pros, there can be some cons too in buying a house with solar panels system.
1) Difficult to Sell: If in the future, you ever feel like selling the house, it can pose to be a problem. Even when the solar installation is entirely owned, homebuyers may regard it as a burden. Homes with solar panels are often more difficult to sell to their increased price value.
2) Extra Cost for Maintenance: Solar panels are expensive. But, once installed, these do not require much maintenance. It is, nevertheless, critical to maintaining the panels clean. This demands regular washing. You can either do it personally or hire an expert. But this will incur additional costs.
3) Not Qualifiable Under Certain Mortgages: Certain mortgages may not be available while buying a house with solar panels already installed. Solar panels may be ineligible for traditional mortgages since they are deemed “energy efficient enhancements” rather than basic components such as central heating systems.
4) Higher Tax: If the former homeowner employed particular financing methods to purchase the solar system, you should be prepared to pay a larger property tax for the new house. Some of these funding schemes include the Home Energy Renovation Opportunity (HERO) program and Property Assessed Clean Energy (PACE).
Buying a house with solar panels already installed is a wise investment, as long as the solar panels are owned instead of rented. Aside from saving money on your energy bill, it will increase the value of your property and make it more appealing for resale in the future. You should be aware of all the intricacies that solar panels come with. Make sure to ask the right questions about the manufacturer, age of the system, servicing period, etc. Always bring a private inspector to check the system beforehand, to avoid buying a house with a damaged solar panel system. The right amount of research and proactiveness on the new buyer’s part can make this a good investment for the future.
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