Do Solar Panels Increase the Price of a Home
Because of advancing technology, installing solar panels on a home has quickly become one of the best and most common investments for homeowners. Most studies on solar panels relating to home prices find that for each kW of solar power installed on a home, the price of the house increases 0.90% compared to a similar home that does not utilize solar power. Resale prices are noticeably higher for homes that have solar panels. As such many real estate agencies and appraisers have taken steps geared at addressing green technologies. The reason for this address is so that buyers and sellers know how to generally value green technologies. Additionally, many realtors or real estate appraisers that commonly deal with green technology have been given the ability to specifically list these characteristics on a home. Green technologies listed include wind turbines, water conservation, Energy Star appliances, and solar panels.
How to Purchase Solar Energy
You can purchase a solar energy system just as any other item: with personal cash, from a loan, or lease. For solar panels, a cash purchase allows you to maximize the benefits and savings associated with solar panels. While you will notice the energy savings immediately no matter how you purchase the panels, only those buyers who purchase the panels outright receive the Federal tax credit. The current federal tax credit for green technologies is 26 percent—leading to an average savings of $9,000 for a buyer. However, this tax credit will reduce to a flat 10 percent by 2022.
Seller’s Real Property Disclosure Form
Real estate agents and appraisers have begun to list green technologies such as solar panels in housing descriptions. However, there is currently no Solar Energy addendum requiring sellers to state the condition of the equipment or their plans for the panels once they sell their home. As a result, buyers should be aware of the potential issues affecting the parties relating to a solar system. Sellers who purchase the solar system outright can remove the system and simply reinstall it at a new home or property.
As such, buyers should make sure that the solar panels are going to remain with the home or receive a prorated purchase price that reflects the lost value associated with losing solar panels. If the home you are purchasing had panels that were financed or leased, someone has to take over the payments. No seller of a home wants to continue to pay for panels they are not using. This means that the loan must be transferred to the buyer. This generally only requires the bank or lender to be notified so they can qualify the buyer of the home. Finally, sellers should ensure that they obtain a release from the solar company. This allows that they no longer have to pay the remaining portion of the lease.
Cons for Potential Buyers
While “going green” with solar panels offers both potential financial and environmental benefits, buyers of a home with solar may not be receiving as good of a deal as expected. In order to push away potential financial disaster, buyers should consider when the system was installed and what the useful life of the panels are. Furthermore, what company installed the system and how has it been maintained. On this note, you should find out if there is any type of warranty on the panels or system itself. Finally, ensure that the company that made the solar panels is still in existence and that transferring ownership of the panels will not affect the warranty on them.
What to Do Before Buying a Home with Solar
Before buying a home that has solar panels, you should educate yourself on the benefits and potential problems with solar. This includes answering all the questions in the last paragraph. Finally, make sure to ask for copies of electric bills. Additionally, ask about any repairs to the system since its installation. This allows you to understand exactly what values the solar panels bring to the home.
Contact Our DC Law Office for More Information
For more than 20 years, Antonoplos & Associates has practiced commercial real estate, residential real estate, and real estate disputes and litigation matters. We represent clients throughout DC, Maryland, and Virginia
For more information on installing solar panels on your home, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys.