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Homeowners' guide to buying a house with solar panels
Buying a home is an exciting milestone, and when the property comes with solar panels, it’s even more so (and we’re not just saying that because we’ve been in the business for over two decades!). Residential solar arrays add an extra layer of benefits, including significantly reducing your electricity bills, increasing your home’s value, and contributing to a greener environment. However, there are some important considerations and questions to ask before making a purchase. We’ll get into the weeds on all of this in our guide to buying a home with solar panels.
Before you go, be sure to request your downloadable guide to buying and selling a home with solar.
Benefits of buying a house with solar panels already installed
There are a number of benefits to buying a house with solar panels already installed. The best part? The former homeowner did all the legwork, and you get to reap the rewards! As a new solar owner, here’s what you’ll benefit from:
- Lower electricity bills
- Increased home value
- Insulation against rising utility costs
- Reduced reliance on fossil fuels
- Upgraded electrical
- Low roof maintenance
Let us explain each of these in more detail.
Lower Electricity Bills
One of the most compelling reasons to buy a home with solar panels is the substantial savings on electricity costs. Solar energy can cover a significant portion, if not all, of your home’s energy needs, leading to lower utility bills and savings that you can put back into your wallet!
Increased Home Value
Homes with solar panels often have a higher market value, as they are viewed as a valuable upgrade, similar to how a new kitchen or a finished basement adds to a home’s value. According to a Zillow study, solar-equipped homes can sell for 4.1% more than similar homes without solar.
This increased value often doesn’t mean higher taxes, either, thanks to the Real Property Tax Exemption for clean energy systems. Some towns opt-out, but you can check on that by visiting this page.
Stable Energy Costs
Solar panels allow homeowners to lock in stable energy prices, shielding them from future utility rate hikes, like Rochester’s, that are expected to increase by 15% or more over the next few years. Buying a house with solar panels can result in predictable and manageable energy costs over the years.
Environmental Impact
Solar panels harness the sun’s energy, reducing reliance on fossil fuels and lowering greenhouse gas emissions, which makes solar even more of an attractive option for environmentally conscious buyers. The environmental impact of our average residential solar array (11.2 kW) is:
- Over 22,000 gas-powered miles avoided
- More than 550,000 smartphones charged
- 374 trash bags recycled instead of sent to landfill
Low Maintenance
Roofs have to be in great condition before a solar array can be installed. In some cases, homeowners replace the roof just before solar installation. Further, when installed properly, solar panels cause no damage to the roof and can actually help protect it, acting as a barrier to the elements.
Most solar panels have warranties of up to 25 years and require minimal maintenance, providing long-term benefits without the hassle.
3 Questions to ask before buying a home with solar panels
Now that you know about all the benefits of becoming a solar owner, before buying a home with solar panels, it’s crucial to ask the following questions:
#1 | Who Owns the Panels?
- Owned Panels: If the seller owns the panels, you’ll have complete control over the system and no ongoing lease payments. This is the ideal scenario.
- Lease or Loan Obligations: If the panels are leased or financed, you’ll need to understand (and potentially take over) these obligations. Ensure you understand the lease terms and how they might impact your ongoing expenses. You can also make your purchase offer contingent upon the seller paying off the lease before closing.
#2 | Who Installed the Panels?
- Licensed Professional: If installed by a licensed professional, they can provide details about the system’s age, maintenance history, and purchase terms. If the original installer is out of business, contact a certified local installer for support. (Ahem, GreenSpark! Our residential solar team is happy to help!)
- Self-Installed: Check if the system has a valid manufacturer’s warranty. Self-installed systems may have a higher risk of issues, so consider a professional inspection (GreenSpark can help here, too!).
#3 | What About Warranties?
- Workmanship and Manufacturer Warranties: Ensure the warranties are transferable. Workmanship warranties cover installation and wiring, while manufacturer warranties cover equipment failures. Discuss the status and transfer of warranties with the seller before you buy.
- Near End of Life: If the system is nearing the end of its warranted life (typically 25 years), have a local solar installer check the panels and provide quotes for replacement or removal if needed.
Buying a home with leased solar panels vs. owned
Depending on the answer of solar panel ownership, the transfer of pre-installed solar panels looks different for each scenario.
Scenario 1 | Owned Solar Panels
Transferring ownership is straightforward if the seller owns the panels, and you’ll have no additional obligations. The panels are included in the sale. (woohoo!)
Scenario 2 | Financed Solar Panels
If the panels are financed, you or the seller will likely need to pay off the loan at or before closing. Mortgage companies typically require this to ensure the new homeowner isn’t taking on additional debt. Discuss what negotiation options you might have on this with your realtor during the buying process.
Scenario 3 | Leased Solar Panels or Power Purchase Agreements (PPAs)
For leased solar panels or PPAs, you have a few options:
- Prepayment: The seller can prepay the remainder of the contract, allowing you to assume the system without ongoing payments.
- Assignment: You take over the lease payments and responsibilities.
- Purchase: The seller buys the panels, so you don’t have to deal with the lease or PPA.
An important consideration for buying a home with solar is that a lease or loan takeover will be included in your debt-to-income ratio (DTI) for home mortgage qualification purposes. This isn’t the case if the seller is involved in a PPA, which is treated like a utility payment.
Don’t forget to set up net metering!
Net metering is a program that credits you for any excess energy produced by your solar panels and applies it to your bill during less sunny months. This is hugely important for solar owners in New York State, as it’s what makes solar such a cost-effective alternative to the utility, even with so many cloudy and snowy days!
If you work with the GreenSpark team, we’ll walk you through transferring ownership and how to set up net metering with our local utilities.
Get the guide to buying a home with solar panels
Buying a home with solar panels offers many benefits, from lower electricity bills to increased property value and environmental impact. By asking the right questions and understanding the ownership and maintenance aspects, you can make an informed decision and enjoy the many advantages of solar energy.
Before you go, download our homebuyer’s guide to buying and selling solar by completing the form below.
