Solar is becoming an increasingly popular addition to have on a house—especially in California. More home buyers are seeking the opportunity to save on their energy bills and lower their carbon footprint by buying a house with solar panels. However, is seeking a house with solar panels worth it? Where do you find the information you need to buy a home with solar panels? What should you ask a seller about the solar panels on their house?

Buying a house with solar panels is usually a good idea as long as you understand the specific situation. This involves many factors, including whether the solar panel is leased or owned, the size of the solar power system, and how much sun the panels are exposed to on a regular basis.

Follow this guide to make sure you have all the essential information. We’ll go through:

  • The pros and cons of having solar panels
  • What factors to consider when deciding to buy a home with solar panels
  • What you need to ask the seller’s agent before making a decision

Pros and Cons of Buying a House with Solar Panels

Here are some of the pros and cons of buying a house with solar panels already installed.

Benefits of Solar Power

Can lower your energy bill immediately

The average person in the Central Valley spends about $3,000 on electric energy per year. By using solar power, a homeowner can expect to save from 50% to 75% on their energy bill.

Sometimes, a house with solar panels can even result in net-zero or net-negative electricity use. In Central California areas such as Bakersfield, Atascadero, and Fresno, energy provider PG&E uses Net Energy Metering (NEM) Billing. With NEM, you’ll only pay monthly minimum delivery charge and gas charges. The net energy use is calculated and carried over for 12 months to the annual “True-Up” statement, where you either pay for excess energy consumed or get paid for excess energy generated.

Increases the value and resale value of your home

Solar increases the value and resale value of a home an estimated $4 for every watt of the solar power system. For some homes, this could be around $40,000! Solar power can also be a great incentive to potential buyers if you ever decide to sell your home, for convenience as well as monetary value.

Makes you eligible for tax credits

30% of the cost of your equipment and the installation can be claimed as a federal tax credit.  And this is not even including the rebates that many states offer when solar panels are installed.

Hedges you against rising electricity costs

Having a home with solar panels can protect you against rising electricity costs. Purchasing solar, or buying a home with owned solar panels, can be a costly endeavor. However, once you’ve paid that large upfront cost, you won’t need to pay the full price of electricity as long as you have those solar panels on your home.

Solar is becoming cheaper

Due to an increase in demand, solar is becoming cheaper. This means it’s even more feasible for you to buy solar. Plus, it might make replacing old or damaged solar panels on a home less costly in the future.

Drawbacks of Solar Power

High initial upfront cost if buying

Buying a home with existing solar panels, or buying the solar panels yourself, is initially costly. The upfront cost can be high depending on factors like how many panels you decide to purchase and where they need to be installed.

May not experience much savings if leasing

If you choose to buy a home with a solar panel lease, the savings will not be as significant. This is because you will be paying to lease the solar panels the entire time you use them, instead of eventually paying them off.

Effectiveness changes depending on the climate

The effectiveness of solar power is lowered during the winter due to less sunlight. It is also lessened during the middle of summer because extreme heat reduces solar panel efficiency. Central Valley areas such as Fresno and Bakersfield experience plenty of sunlight, but also high temperatures. In Central Coast cities and towns like Atascadero, fog and cloudy weather reduce sun exposure, but temperatures are usually prime for peak solar panel efficiency.

Solar panels change your house’s look

Solar panels do change the aesthetic appearance of your home. Because of the direction your house faces, it might not be possible to make them less noticeable on your roof or in your yard for ground-mounted solar power systems. Larger solar power systems also take up a lot of space on the roof area, which can be tricky to hide depending on your roof’s layout.  

You can’t move with your solar panels

Once you have installed solar panels, they are very difficult to move. This is also something to consider if you are buying a house with fully owned solar panels. If you decide to move again, especially in the near future, the cost may not be worth it because in most cases you cannot take the solar panels with you.

What To Consider When Deciding To Buy a Home With Solar Panels

Buying a house with solar panels isn’t a quick decision. There are many factors to consider that could make those solar panels an asset or a burden to your homeownership.

The Solar Panels Can be Leased or Owned

Solar panels can either be owned or financed by the homeowner, or leased by the homeowner from the solar company. Leased and owned solar panels have their advantages and disadvantages.

If the Solar Power System Is Leased by the Sellers

Your lender may want to add a solar lease to your debt-to-income ratio, reducing your ability to buy the home. This could cause issues with interest rates, initial payments, and other costs associated with purchasing a home. Also, solar panel maintenance is dependent on the original solar company, which may or may not be reputable. Maintaining solar panels is key to solar panel efficiency, but if the panels are leased by the sellers, then you can’t control this factor.

If the Solar Power System Is Owned by the Sellers

Paying for solar panel maintenance would be your responsibility as the new homeowner, adding another task to the many responsibilities you already have. But, with the large up-front cost of the solar has already been paid, it eliminates the main barrier to solar power system ownership. Also, while having solar panels on your new house would add to the initial cost of the home, the good news is that the solar panels are yours and would start working for you immediately. Buying a home with existing solar panels results in the greatest electricity cost savings.

When you’re asking the big question—should I buy a house with solar panels—consider whether the larger house payment from the increased home value is worth the electric bill savings. (It usually is!)  

If the Solar Power System Is Under a Power Purchase Agreement (PPA)

A solar power purchase agreement involves a developer making all of the decisions regarding solar design, permitting, financing and installation. Then the developer sells the energy to the homeowner at a low cost. These agreements usually last a fixed number of years. Sometimes a house could have multiple PPAs, severely limiting any cost savings from the solar power system.

Roof Condition Affecting the Solar-powered Home Purchase

A bad roof may require re-roofing, which can mean the costly endeavor of removing and reinstalling the solar panels. This should be done by a solar company that understands roofs, like Bland Company.

How Solar Power Will Affect Your Energy Bill

The way that solar power generation affects your energy bill depends on your energy provider. In Central Valley and Central Coast areas such as Fresno, Bakersfield, and San Luis Obispo County, PG&E makes it easy to read solar generation and estimated costs.

What To Ask the Seller’s Agent About a House with Solar Panels

Before moving forward with purchasing a home with solar panels, make sure you ask the seller’s agent these questions to ensure it’s the right fit for you.

Does the Seller Own or Lease the Solar Panels?

1. Does the seller own or lease the solar panels?

As we stated earlier, an owned solar system usually means greater energy savings than a leased system. However, as the homeowner, you would be responsible for the solar power system’s maintenance if you own it.

2. If leased, what are the terms of the lease?

When buying a house with leased solar panels, get the terms of the lease. Ask questions, such as, “Is the lease transferrable? Is it easy to transfer?” Some leases include unfriendly terms that turn the solar panels into a headache rather than a source of relief from your PG&E bill.

3. Are the solar panels paid off?

If the seller owns the solar power system, ask if the financing is paid off or if the owner is still making payments. If it’s paid off, this is the best situation to buy a home with solar panels? If the seller is still paying, it’s an opportunity to have your real estate agent work out a deal.

4. Are there solar power liens?    

Also, ask about solar panel liens from solar installations. There might have been a lien or Uniform Commercial Code (UCC-1) filed by the manufacturer to make sure the homeowner continues paying for the panels. This lien would be connected to the property and could be dependent on the original financing. A lien, or claim against the property, can also create problems in the buying and selling process. Double-check that the solar panel manufacturer does not have the power to uninstall the system when the home sells.

5. Who installed the solar panels?

The ideal situation is that a licensed solar installer installed the system. However, sometimes the system is self-installed by the current seller or a previous owner. Professionally installed solar power systems are always preferred and safer.

6. What’s the condition of the roof?

A roof nearing the end of its life may need to be re-roofed soon, and the cost may be your responsibility. In some cases, this could result in negotiations for the home sale.

7. How have the solar panels been maintained?

Regularly cleaned solar panels and systems that are checked regularly usually last longer than those that aren’t cleaned. In California, drought conditions and wildfires mean little rain and more dust, so more solar cleanings are recommended.

8. How much does the seller pay or receive from PG&E’s “True-up” bill?

This will give you a good idea of how the solar power system and home energy usage compare. If electricity costs are still high, it may mean energy-saving modifications could be done to the home to conserve cold in the summer and hot air in the winter.

Is Buying a House With Solar Panels Worth It?

Probably Yes, If:

  • The solar power system is owned and paid off
  • The roof is in good condition
  • The solar panels have been maintained
  • The annual energy cost for the seller is significantly less than what the house would cost without the solar panels
  • If you would receive tax credits for buying a home with solar panels

Probably No, If:

  • The solar panels are leased, in a PPA, or are owned and have a significant amount of payments that still need to be paid
  • The roof needs to be replaced or is nearing the end of its life
  • The solar panels are damaged, aren’t maintained, or have comparatively low efficiency
  • The cost of any payments that need to be paid are equal to or outweigh the savings you get for having a home with solar panels

Before buying a house with solar panels, ask your nearest Bland Company representative in Atascadero, Bakersfield, or Fresno to make sure this is a good decision. It is easy to schedule an inspection with us when you’re in escrow to make sure the solar power system on the home you want to purchase is worth it.