Will Solar Panels Boost My Property Value

Photovoltaic panels, better know as solar panels, have technically been around for many years; however, there's still a lot of unknowns about solar panels. Some common concerns are: Will solar panels affect the value of my house? Why don't appraiser account for it? What happens if I sell my house?

Part of the reason solar seems so new is that up until about 2009, there were no lease options for solar panels, you had to purchase them and most people couldn't afford them. 

Buy vs Lease

I'm currently representing a buyer who is in escrow on a property in Rancho Mirage. The seller of the home purchased the solar system so they own it free and clear. This was a HUGE incentive for my clients as the current electrical bill for the seller is reportedly about $0.09 a month. The home is 3,539 square feet and this time of the year most electrical bills are between $400 - $600/month if not more. Obviously the savings are loud and clear for these buyers!

Still, purchasing electrical panels can be very expensive, even with the rebates offered. Not everyone has $40,000 laying around to spare on solar panels. Leasing can be a more attractive alternative. In fact, I just signed an agreement with Solar City to lease solar panels for my house. Here's how it works:

Once the drawings for the solar panels are reviewed and approved by my homeowners association, the panels will be installed on the roof on the backside of my house, which faces South. Installation of the panels will take 1 day. There are no cost to me for the panels to be installed and Solar City guarantees the roof and the panels.

The panels are on a 20 year lease which is easily transferable if you decide to sell the house. That being said, if I were to sell my house the new buyer would have to qualify with their mortgage to include the payment of the monthly solar lease. This can cause some hiccups if the buyer's agent isn't aware of this prior to submitting an offer so it's good to do your research and be knowledgable with real facts. 

Even as a lease, I think the solar panels provide an attractive incentive for home buyers. My rate is locked for the next 20 years at $170/month. This means even as electrical rates increase on a yearly basis, my monthly costs are fixed. At the end of the lease agreement, the panels will basically be paid off or if I decide I no longer want the solar panels, Solar City will remove the panels and restore the roof at no cost to me. Since my current electrical bill during the summer months is nearly $500, it seems like a no brainer to me.

I suggest meeting with 2 or 3 different solar companies before making a commitment. There may  be incentives available and not all companies offer the same incentives. 

Increased Home Values

We all know about the electrical savings solar panels provide but on top of those savings, more and more studies are being compiled to show that homes with solar have higher resale values. In a state like California, for example, a small 3.1-kilowatt (kW) system can add an average of $18,324 to the value of a medium-sized home, according to National Renewable Energy Laboratory. It’s important to note that these statistics only apply to today’s housing prices and utility rates. As electricity prices go up (as they most certainly will), the advantages of solar energy rise proportionally as well. The larger the solar system also seems to garner more resale value.

Even tax assessors agree solar panels increase property values. Senate Bill 871 became effective in June and extends a solar tax exemption for new active solar energy systems until 2025. An existing law, set to expire in 2017, bars property tax increases based upon the construction or addition of a solar system. Without this exemption, such an improvement would add value to the property and thus result in an increase in the property taxes assessed.

Solar panels are becoming more popular everyday, especially here in Southern California. In cities like Indio and Palm Desert where we have 350 days of sunshine a year, many new home builders are including solar packages on their homes.

I think solar will become so common here in the Coachella Valley that people will start to expect solar to be automatically included on new homes. Kind of like air conditioning, you wouldn't expect a home to not have it, at least here in the desert. Home buyers will start asking for solar panels as one of their main search criteria.

If you have questions on how solar panels will boost your property value or if you are looking to purchase a home for sale with solar, please call/text me at 760-574-8464 so I may assist you.