Buying a house with solar panels can be a great investment, but it’s important to know what you are getting into before making a purchase. Solar power panels have become more common in recent years as the cost of installation has decreased, and many home buyers are considering the benefits of owning a solar-powered home. However, there are several factors to consider when buying a house with solar panels, including who owns the panels and how they were financed.
One of the most important questions to ask when considering a home with solar panels is, “How were these solar panels financed?” The answer will likely be one of three options: the panels were purchased with cash, they were paid for with a loan, or they were leased through a third party. Each option has its pros and cons, and the decision ultimately depends on your personal financial situation and priorities.
A Cash-Purchased Solar System
If the house you are interested in buying has solar power panels that the current homeowner paid for with cash, you are in luck. This scenario means that you won’t have to worry about transferring any paperwork or dealing with the loan during the sale. However, you should keep in mind that you may not be able to take advantage of all the incentives that the original purchaser received, such as tax credits or rebates. Still, you will be able to benefit from performance-based incentives, such as net metering and SRECs, and enjoy a low or non-existent electricity bill.
A Loan-Purchased Solar System
If the solar panels were paid for with a loan, there are a few more things to consider. On the positive side, owning the panels outright at the end of the loan term can be a great investment. However, you’ll need to ensure that you can take over the loan payments from the previous owner and that there won’t be any liens placed on the house by the solar company. Additionally, some lenders may be hesitant to approve a mortgage if solar power panels are loaned, so it’s important to discuss this with your lender beforehand.
Lease and Power Purchase Agreements
Lastly, if the solar panels are leased, there are several more things to consider. While a solar lease can be an affordable way to access solar power, it also means that you won’t own the panels. This can make it difficult to transfer ownership if you decide to sell the house, and the leasing company will receive all of the incentives and tax credits. If you are interested in owning the panels outright, you may be able to negotiate a buyout of the lease from the previous homeowner.
While it is important to consider if the solar power panels on a potential home are paid for, there are additional factors that should be taken into account before making an offer.
The Age of the Solar Panels
It is crucial to consider the age of the panels, as their efficiency decreases over time. Solar power panels typically have a warranty of 25 years, but if they are over 20 years old, their decreased efficiency and potential need for inverter replacement should be considered.
Solar Installation Company
Additionally, it is essential to research the solar company that installed the panels. Ensure the company is still in business and has positive customer reviews. If the company’s reputation is not good, it may be a red flag before making an offer.
The Condition of the Roof
The roof should be assessed before solar panel installation, as a roof replacement should be completed before installation. It is crucial to find out the age of the roof, as removing and reinstalling solar panels will be costly if a roof replacement is needed.
Overall, buying a house with solar power panels can be a smart investment, however, it’s important to do your research and understand the financial implications before making a purchase. By asking the right questions and working with an experienced real estate agent, you can ensure that you are making a sound investment in your future.