Temperatures are heating up and we all know what that means, increased electrical bills. Notice the solar panels going up all over town, even school districts have jumped on the band wagon to SAVE.
All this excitement to SAVE has lead to a few discussion with our past and current clients and therefore the creation for this blog. So if you are considering solar, I would like to give you a few things to consider to help you in your decision. If you have already began enjoying the benefit of low/no utilities, just somethings you will want to think about in the future.
First I would like to start by dispelling a “myth” I commonly hear from my clients that the solar salespeople have told them…. “Solar will increase your homes value.” First, this should definitely not be a consideration when purchasing solar. I have seen Solar panels priced from $10,000-$30,000 depending on the size of home and wattage needed. I have completed several sales with homes that had solar and in speaking to many appraisers, on average the value added to the appraisal was $5,000. Also note that these units were 1-2 years old. You might be thinking that swimming pools are the same, actually swimming pools will add approximately $7,000-20,000 and we do get buyers all day long requesting to see ONLY homes with pools, that is not the case with solar.
As you can see to pay $20,000 for something that is worth $5,000 the very next day isn’t a value. Therefore it could potentially eat your equity.
Of course there are financing options, making solar even more affordable. Word of caution, when you sell your home, the new buyer will have to qualify and be approved by the solar company in order to transfer the lease. Several things to consider here. Some companies require at 680 credit score or better, however we sell homes to buyers with lower credit scores, so you have just limited your buyer base.
We have also had the issue with the buyers lender not wanting the solar company to run the buyers credit for fear it would lower their score. In that case we had to wait until a few days before closing to see if the buyer could even qualify for the lease, thankfully they did and we closed without a hitch… but it could have had a very different turn out.
Also keep in mind that most solar companies do not put a lien on the property. What does that mean? As a seller, it is your responsibility to confirm the transfer. If not it is your personal credit and you could be responsible for the bill.
As mentioned previously about limiting the amount of buyers able to buy your home, here’s something else to consider. Having less buyers, could mean a lower sales price for your property and I am not just talking about low credit scores. For example Winter visitors. They are not living in the home during the peak months and may not want to make payments on a solar panel all year in order to conserve summer increases. Speaking from experience here, we lost a buyer under this condition.
So in closing I want you all to know I am all for solar savings. However keep in mind the average solar panel takes 7-10 years to break even, do the math or ask APS or a reputable company. As a real estate professional I know that the average move out in AZ is 5-7 years, job transfer, divorce, additions to the family, death and many other reasons. Perhaps their are less expensive energy efficient items you can add without eating up your equity, cause in the end, we want the most amount of money in your pocket.