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Selling a House with Solar Panels (Guide)

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Life is unpredictable. When you first installed a solar panel system on your home, you looked forward to many years of generating your own electricity and helping the environment. But just a few years later, you have to sell your home. Although you know that solar panels can increase the value of your home, you’re worried they could also make selling your home more complicated.

Thankfully, complicated doesn't mean impossible. In fact, it might be easier than you think. With this guide, you’ll learn what you need to know about selling a house with solar panels. We’ll answer any questions you might have, and share the requirements and liabilities to be aware of, based on how you financed your solar energy system: cash purchase, solar loan, solar lease, or power purchase agreement (PPA).

General Tips for Selling Your House With Solar Panels

Solar power systems are gaining popularity across the country, especially as the cost of solar panels decreases and solar panel efficiency increases. As a result, the demand for solar-powered homes in the national real estate market is on the rise, evidenced by faster sales and higher sale prices relative to comparable homes without solar.

So how do you capitalize on the demand? These tips will help you talk to both realtors and potential buyers about how buying your home with solar panels will be worth the investment.

Communicate the Financial Benefits of Solar Power

Although the sale price of a home with solar panels might seem higher than a home without them, solar panels offer buyers both immediate and long-term savings that may offset the initial costs. Talk to interested homebuyers about their savings potential using reasons such as:

  • Reduced energy bills: When your solar panels generate the electricity you use, you could see a smaller electricity bill.
  • Protection from rising energy costs: Electricity rates keep rising each year, so a solar power system can help shield you from future price increases.
  • Net metering credits: If the solar panels generate more electricity than you use, you may be able to send the excess energy to the electricity grid in exchange for net metering credit from the utility company.
  • Increased home value: In case the buyer decides to sell in a few years, solar panels currently improve home values by 4.1% on average, and those savings could keep rising.

Note: Net metering is not available in every area. Check with your electricity provider to see how rates are structured for your home.

Communicate the Environmental Benefits of Solar Power

Solar panels produce clean, renewable, and emission-free electricity. An eco-friendly homebuyer will immediately understand the value of solar energy, including:

  • Reduced air pollution: Solar panels create clean energy that doesn't send pollutants into the atmosphere.
  • Reduced carbon emissions: Going solar reduces the demand for fossil fuels, limits the emission of greenhouse gasses, and shrinks your carbon footprint.
  • Reduced waste: Solar panels are durable, and they can last 25+ years with low cleaning and maintenance needs. In addition, the vast majority of solar panel technology can even be recycled.

Communicate the Warranties and Service Agreements

When selling a house with solar panels, you should directly introduce the buyer to your solar provider to handle the transfer of any contracts, service agreements, warranties, and more.

For example, Palmetto takes the burden off our customers by helping you, the seller, and your buyer with the process of transferring service agreements and warranties. The following warranties transfer to the new homeowner automatically:

  • Panel product and performance warranty (manufacturer's warranty)
  • Inverter warranty (manufacturer's warranty)
  • Workmanship warranty (for Palmetto customers, 20-year)
  • Penetration warranty (for Palmetto customers, 5-year)

You can also provide the potential homebuyer with your Installation Contract that describes your Palmetto warranty.

Perform an Appraisal on Your Home

Getting a fresh appraisal of your home that includes your solar panels will add value to your property. You should work with a real estate agent or appraiser who has experience selling homes with solar panels, based on any of these valuation methods:

  • Income-based valuation: Focusing on the projected income the solar system will generate for the owner over its forecasted remaining lifespan, it’s a practical way to explain the return on investment to potential homebuyers.
  • Cost-based valuation: This method calculates the cost of building the current type of solar system on the home based on the quality of the equipment.
  • Market-based valuation: A method that determines your home's market value by observing the impact of the system on the home's value compared to those without a solar system.

Are Houses with Solar Panels Easier or Harder to Sell?

Although solar panels can increase the value of your home, they don’t always make it easier to sell the property. That said, it can be a smooth process if you understand both the benefits and the challenges of selling a house with solar panels.

Easier to Sell With Solar

Solar panels don't require a lot of maintenance and are likely to offer homebuyers greater value over the long term. These benefits and others should make solar panels a selling point for many homebuyers.

  • Increasingly popular: Current market research tells us that buyers are willing to pay more for homes with solar panels than those without.
  • Lower maintenance: Relieve buyer concerns by sharing that solar panel cleaning isn’t that complex, and when needed, it’s often handled by the solar panel installer. Moreover, solar power systems are designed to withstand the elements so they won’t damage easily.
  • Financial perks: Solar panels can lower monthly energy bills, especially if the homebuyer uses less electricity than the system generates.
  • Helps the environment: An eco-conscious homebuyer will be excited to buy a home with solar panels that can help reduce their greenhouse gas emissions.

Harder to Sell With Solar

Selling a home with solar panels can be tricky, especially if you face the following obstacles:

  • Buyer hesitation: Buyers might not understand the benefits of having a solar energy system, so they may be concerned about upkeep, maintenance, and repairs.
  • Agent hesitation: Agents might not understand or want to communicate the benefits of having a solar energy system, so they may scare away potential buyers, making the process harder for you.
  • Seller issues: The selling process can be complex if you can’t produce the necessary documentation about your solar panel system, and you could lose out on that potential extra value.
  • Valuation issues: A substandard appraisal might lack enough data to convince potential buyers why your home with solar panels is priced higher than similar homes in the neighborhood.
  • Solar leases: Buyers might not want a home with a solar lease, since the solar panel system remains the property of the solar installer. Solar leases can also be harder to transfer since the leasing company needs to be involved. (For more information, check out our guide to Solar Leasing vs Solar Buying.)

Selling Your House With Owned Solar Panels

If you own your solar panels outright without any financing, it’s the easiest scenario for selling your home. Solar panels that have been purchased and paid for don’t require multi-party solutions to transfer solar panel ownership. In addition, homebuyers are often willing to pay more money for a home with owned solar panels than one with leased solar panels.

Selling Your Home With a Solar Loan

When selling a house with a solar loan, the lending institution can help you transfer the solar loan to the new homeowner. However, your selling options depend on how you financed the loan, namely whether it was a secured or unsecured loan.

  • If you bought the financed solar panels using a secured loan, you have to clear the loan before selling your home.
  • If you bought the solar system using an unsecured loan, the solar loan is not tied to your property, so you can sell your property before clearing the loan.

Selling Your Home with a Solar Lease

Unlike a solar loan, selling your house with a solar lease could be a liability. This is because you don't own the solar panels; the solar company does. As a result, selling a home with a solar lease involves selling the house and transferring the solar lease at the same time.

In this case, you have two options:

  • Buying out the remainder of your lease payments; OR
  • Try to get a willing home buyer to transfer the lease and take over the payments.

While it's more difficult to sell a home with a leased solar energy system, it's not impossible. To avoid any liability issues, the seller, buyer, real estate agent, and solar company should conduct negotiations about the solar panel lease on top of negotiations for the home itself.

Selling Your Home with a Solar PPA

A Power Purchase Agreement, also known as a PPA, is similar to a solar lease in that the solar installer owns the panels while the homeowner enjoys the benefits of solar electricity. Selling your home with a solar PPA works the same way as selling your home with a solar lease: You have to sell the house and transfer the solar PPA to the buyer. The seller, the buyer, the real estate agent, and the solar company should conduct negotiations about the solar panel PPA separate from the house itself.

Can You Move Solar Panels To A New Home?

You love your solar panel system, but you also want to move. Can’t you pay someone to remove the panels from your current home and install them on your new one? Unfortunately, the answer is most often “No.”

Not only can it be logistically challenging to remove and transport the solar panels, but there’s a good chance it could damage your panels and/or your roof. Any savings you hope to see by moving your system could be offset by the costs of having to repair the roof of the home you're trying to sell. While panels are durable once installed, removing, moving, and reinstalling them can dramatically increase the chances of being damaged.

In addition, your solar system was tailor-made and custom-designed for your current home and consumption habits. Most solar panel installers do not recommend moving your solar energy system from one home to another because the energy needs and roof design are usually different. This could result in poor electricity generation, which means you wouldn’t enjoy the full benefits of your solar panels. Palmetto does not offer this service to its customers, and we will not store or transport any customer-owned solar panel system equipment.

How To Sell A Home With Solar Panels

Selling your home with solar panels can be a complicated process, so it’s nice to have a clear guide that helps you understand the steps, so you can enjoy the maximum return on your investment.

As a home seller, you need to be clear on the ownership status of your solar panels, as that could seriously improve or hamper the sales process. Additionally, you can increase the likelihood of a smooth sale if you can communicate the benefits provided by solar panel ownership to prospective buyers and real estate agents.

The more information you can provide upfront to your real estate agent and prospective buyers, the better. On the flip side, the more people that need to be involved in selling the house (especially if you have a solar lease or PPA), the slower and less attractive the sales process might be to potential buyers.

If you're thinking about selling your home with Palmetto solar panels, you should learn about your options for transferring the warranty and Palmetto Protect service plan to the new owner. You can also contact our service department to schedule an inspection of your solar panel system to verify that everything is up-to-date before you sell your home.

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