Shining a light on solar panels
Does going green really equal more green?
Humans have been trying to harness solar energy for almost 200 years. We finally did it, and it is more accessible than ever. So why isn’t it a selling feature in Central PA?
What are solar panels and how do they work?
According to energy.gov, “When the sun shines onto a solar panel, energy from the sunlight is absorbed by the PV cells in the panel. This energy creates electrical charges that move in response to an internal electrical field in the cell, causing electricity to flow.”
The solar panels produce DC, direct current, electricity which is converted to AC, alternating current, for use in your home.
To see the most financial benefit, purchasing the solar panel system outright is the best option. According to Consumer Reports, this could be an investment of $15,000-$20,000 after tax credits, but net you a 70%-100% savings on your energy bills.
Because of the large upfront cost, the majority of homeowners have opted to lease their system from solar companies or third parties. Leasing results in far less savings that can continue to shrink over the life of the lease.
They are good for the environment. They save you money. How could they not add value to your home?
Value and Marketability Issues
When asked by homeowners, especially ones who may sell in a few years, if they should get solar panels, my answer is always an unequivocal “no.” Do I hate the environment? No, of course not. They are asking for my opinion as it relates to their home value so I have to set aside any personal feelings and be honest with them.
The important thing to remember is that this advice is for homeowners in Central Pennsylvania. Our market area is often late to the party when it comes to trends, environmental progress, etc. and solar is no different. New ideas take longer to gain market acceptance here than in other regions of the country.
So why is my answer always no? Simple. Buyers are just reluctant to purchase a home with solar panels. I have had two listings in the last year that were otherwise fantastic homes. Large, good condition, priced well, and time after time, the feedback from potential buyers was that they were uncomfortable with the solar panel situation. Both properties had leased systems.
So, how does that work? The buyers have to be approved by the solar panel company and take over the lease, which is also on the title records of the property. Even if a buyer is approved for a mortgage, they may not be approved for the solar panel lease. If a buyer has marginal credit, an additional credit pull during the mortgage process could cause issues as well.
And don’t forget the roof! A buyer recently purchased a home with solar panels. The seller had the panels installed onto a 20-year old roof. The home inspection revealed that the roof needed to be replaced. It took time to even get the information from the solar panel company causing delays in the negotiations. The cost to remove and reinstall turned out to be $5,000. Many people don’t even realize that there is a cost for that service.
Between the lease approval, the lease terms, possible roof issues in the future, cost of maintenance and the general unfamiliarity with the systems, buyers are hesitant to consider homes with solar panels. If owned outright, there is a better chance of getting buy-in from potential buyers. In the long-term it is a step in the right direction for both the environment and the financials of the property, but most people aren’t thinking that far ahead. Many buyers don’t plan on staying in a home for decades and may never see those long-term benefits.
If considering solar, don’t look up statistics on the internet or listen to a biased salesman. Reach out to a local, trusted professional to get accurate advice on your home. Depending on your situation, solar may not be the brightest idea.