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Solar Panel Issues when Selling (Yikes!)

By
Real Estate Agent with Coldwell Banker Select

Our local lender Amber said she was dealing with three transactions with this same issue last week. If you get solar panels today, they are quite expensive and often purchased and financed over twenty five or thirty years. The idea of using solar panels, harnessing the sun's energy to power your home is very attractive. However, consider the rate of improvement in technology, Moore's Law for instance states that the number of transistors on a microchip doubles every two years. This means that the cost will decrease and the improvements in solar panels will increase at an exponential rate. In five years, the solar panels you install today will probably be obsolete.

Another option that is available to homeowners is to lease solar panels from the solar panel companies. Be aware that when you do this, the solar panel company, that owns the panels will get all incentives and rebates that are offered.

Here is the problem. When you sell your home, the solar panels that were installed either will need to be paid off or the buyer will need to assume the payments if they can or want to. According to Amber, the three clients with this issue still owed an average of $30,000, in some instances, it can absolutely derail the sale of your home.

I know many neighborhoods have solar panel sales people canvassing through. The projections for the amount of solar energy that can be harnessed can be wildly optimistic. Think of the variables, the amount of sunlight, the degradation of the solar panels over time, the efficiency of the inverter, the angle of the installation of the solar panels, birds building nests in the solar panels.

My personal opinion is to wait until solar panels will be cheap enough that you can pay without financing or that the installation becomes much more simple and also cheaper. For instance Tesla has solar panels that are built into the shingles, I think they are quite expensive though, over time, the installation process for solar panels should get easier, faster and cheaper.

 

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Comments(7)

Michael Lamirande
Long & Foster - Devon, PA
Listing&buyer Agent/ leasing and investment proper

Wow!! Great angle. Curious to see if there will be changes in the way business is done on this end.

Mar 01, 2024 07:24 AM
Peter Tamura

Hi Michael, thanks for your comment. I don't know, it's a disaster if the buyer can't qualify to take over the payment for the solar panels as well as the house. I think the high pressure sales people canvass neighborhoods and homeowners sometimes make decisions without thinking it through.....

Mar 01, 2024 07:56 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Peter - real estate is never easy but it doesn't need to be difficult.   Proper preparation can help but can't eliminate every obstacle on the way to closing. Here's to successful planning.   In and away from real estate. 

Mar 01, 2024 07:28 AM
Peter Tamura

Good morning Michael,

The impediment to action advances action. What stands in the way, becomes the way. -Marcus Aurelius

Mar 01, 2024 07:58 AM
Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

Great article, thank you for sharing.  PS--  Tech for solar panels isn't where it needs to be for them to be attractive price wise.  Speaking of attractive, they are ugly.  

Mar 01, 2024 07:46 AM
Peter Tamura

Hi Michael, and strangely, everyone that commented on my post so far is Michael! I agree, and I agree.

Mar 01, 2024 08:00 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Peter, years ago when solar panels started popping up, I had an issue about a week prior to closing.  Of course the buyer had to qualify for the lease, and good thing she wasn't close with her DTI, and could do it, or it would have crashed.

Mar 01, 2024 10:14 AM
Peter Tamura

Hi Joan,

Thanks for your comment! Do you drive by and check if those solar panels are still working?  Anyway, glad you got it closed, shame to do all the work and the deal to fall apart over something like that. I just met with a client to hand him back an earnest check on a deal that did bust over inspections and he's driving a new giant SUV! He said he talked and got it approved from the lender though....

Mar 03, 2024 06:35 AM
Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Welcome to the Rain. Enjoyed your blog page, and I added you as a follower. I would love the follow back. Also, then we both get 50 points. Bill

Bill Salvatore, Realtor- Arizona Elite Properties

Mar 02, 2024 05:02 AM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA

Thank you for your insights!  One other factor that changed my mind on solar panels...I was reading an article where a hale storm destroyed a solar panel farm.  I never even thought about the possibility of destruction...

Mar 04, 2024 07:56 AM
Peter Tamura
Coldwell Banker Select - Tulsa, OK
BANNOCHIE TEAM

Hi Jim,

 

Thanks for your comment, yes, that's another risk. In Oklahoma, we occasionally get hail storms, I don't know what you do, they can strike very suddenly, I wonder if you can cover or remove solar panels. I've seen panels that aren't on the roof but track the sun during the day. Very cool, but complicates and adds to the cost. Those type of panels, you might be able to move during bad weather where there's no sun anyway.

Mar 04, 2024 09:47 AM