Buying a Home with Solar Panels
Are you looking to buy a home with solar already installed? Or maybe you’ve already purchased your new home and have questions about your new solar panels? Leased or owned, here’s everything you need to know—from the experts at Citadel Roofing and Solar.
What You Need to Know
You may be house-hunting and wondering, “Should I buy a house with solar panels?”
For most home purchases, buying a house that already has solar installed is a way to save money and the planet but there are a few things to consider before you sign on the dotted line.
First, you will need to determine whether the panels on the home are owned outright by the previous owner, financed with a solar loan, or owned by a third party through a power purchase agreement (PPA) or a solar lease.
Buying a House With Cash-Purchased Panels
If the previous homeowner’s solar panels are paid off they will simply be included in the purchase of the home. This is the best case scenario and makes it straightforward for you as the buyer.
When the outright ownership of the panels is included in the home’s sale, you won’t need to transfer any PPA or lease agreements.
You will want to make sure you have access to all relevant warranties. Most solar and workmanship warranties cover an extended period and are simple to transfer.
Some companies only have warranties for the first buyer of the solar panels. So, it’s important that you know who supplies the warranties and if they can be transferred. While this isn’t a complicated process, it’s good to know what policies are offered by which company.
Buying a House With Financed Panels
If the solar panels have a loan that isn’t being paid off with the sale of the home, then you’ll need to work with the loan financier of the existing panels. They will need to transfer the loan payments to you. Even with a monthly payment, solar typically saves you money on monthly power costs.
If you don’t want to take ownership of the loan, work with the homeowner to include the cost of the panels in the mortgage to make you the owner outright. The prior homeowner would then be responsible for paying off their existing loan. Be sure to have the pay-off contractually obligated to the sale so as to avoid any lien issues with the financier.
PACE Loans
California residents can apply for the property-assessed clean energy (PACE) loan. Local and state governments grant PACE loans and are therefore paid alongside property taxes. It is important to note that if you decide to buy a home where the solar panels are financed through PACE loans, or if you yourself are thinking of using a PACE loan to install solar panels onto your property, then a lien is placed on the house. The lien remains on the property until the PACE loan is repaid. Therefore, the loan is attached to the house, not to the individual.
Make sure you look at PACE loans carefully. These loans take precedence over mortgage payments. It is important to note that there are mortgage companies that will not offer loans on houses where a PACE loan already exists on the house.
Panels Owned by a Third Party (Leasing & PPA)
In some situations, solar panels are owned by a third party. This is the case with solar leasing and Purchase Power Agreements (PPAs), rather than the homeowner. Here, the third party is responsible for the maintenance of the panels–and sometimes insurance as well.
If you are considering a home with a leased solar panels system or PPA, you’ll want to contact the third party who owns the system. You will then need to work with them to get details on how your agreement works. There are often buyout options available.
Things to Look Out For
If you are looking at a house with PPA solar panels instead of owned, be sure to review the contract for an escalator clause.
An escalator clause is when the monthly payments increase each year for the duration of the agreement. While low initial payments can be attractive, it is important to understand any rate increases and how they compare to projected utility rates.
Always know what performance and rates are guaranteed and how those might change.
Make sure you note whether the loan is secured or unsecured. A secured loan could mean the lender has a lien on the house as collateral for the solar panels.
Other Factors to Consider
The Roof
An often overlooked aspect of purchasing a home with a solar energy system is the roof. Evaluating the roof's condition can be just as important as the panels themselves. If the roof needs repairs or replacement, it may be necessary to remove and reinstall the solar panels, which comes with potentially significant costs. It is a good idea to hire a third party to inspect the roof for any damage. Ideally, you should also get an estimate on when the roof will need to be replaced.
If you’re buying a home with solar panels, make sure you properly research the company that installed them. Find out if the original installer is still in business, what workmanship guarantees are in place, and how they transfer to the new owner.
The Panels
Another thing you will want to note is what kind of equipment was installed. You should be sure to ask how old the equipment is, including panels, inverters, and batteries. Solar panels have no moving parts and can function well for decades. They often have warranties that go up to 25 years. Even older panels can still be in good condition. You should consider working with a third party to evaluate the health of the existing installation.
Find a System to Fit Your Needs
Everyone has unique energy needs–even in similarly sized homes. Depending on your usage, you may need additional panels if your usage surpasses the older setup. With non-export panel policies, you have options available. As the new homeowner, you may want storage from a solar battery if the existing system doesn’t have one installed. Rest assured, these can typically be added to the existing system.
Solar batteries are an excellent investment for your wallet and your peace of mind. With a battery you can rely on power generated from your panels for energy at night or cloudy days, and even keep your power on during a utility outage.
Some popular battery systems you might consider include the recently released Tesla Powerwall 3, the Franklin Whole Home Battery, and the Enphase IQ5P.
Contact Citadel Roofing & Solar to see if you might need to add panels to meet your needs or get an estimate for a battery. Understanding your options before you buy your new home will help you make the right decision.
Why Should I Buy a Home With Solar?
Solar has never been more popular. It’s increasingly common to find homes equipped with solar panels. And many home buyers are even looking exclusively for homes with solar energy systems.
Not only do solar panels help the environment and decrease electricity bills, but they are also a valuable investment. In fact, California residents with solar panels saw their homes' value grow by almost $10,000.
According to the National Renewable Energy Laboratory, the average Californian resident saves upwards of $123 a month on their electric bill. Solar energy systems also put the power in your hands and make you less dependent on your utility company so you can keep your lights on even when the grid goes dark.
See How We Can Help
We're excited that you are considering a home with solar power! Buying a home equipped with a solar energy system can cut your utility bills, make you less reliant on the utility company, and shrink your carbon footprint – a win for your wallet and the environment.
Smooth Home Transactions with Our Solar Inspection Service
Make your home transaction stress-free with our detailed solar inspection service. At Citadel, our licensed solar service team is ready to inspect and diagnose existing solar systems, offering you peace of mind. We provide thorough reports that highlight any issues or concerns so you know exactly what’s going on with the system. We also offer transparent quotes for any necessary repairs, so you’re fully aware of all costs. Don’t let uncertainties about your solar system affect your home purchase.
Enhance Your Solar System
Thinking about expanding your solar setup or adding a battery system? Our skilled installation team is here to help. We’re ready to assist you in enhancing your solar system to better meet your energy needs.
Reach out to us to find out how we can improve your solar experience and power your home efficiently.
