Can Solar Decrease the Value of my Property?
Technically speaking, no—solar will rarely, if ever, decrease the value of a home. One of the few situations where solar could cause a decrease in property value would be if they were improperly installed, causing damage to a customer’s roof or electrical wiring. However, in most cases solar companies offer warranties that cover any extra costs from damage or faulty installs. Here at Blue Raven Solar we offer a 10-year workmanship warranty and a 25-year equipment warranty, so decreasing the value of your home is a highly unlikely scenario.
Another rare situation where solar might make things harder for a homeowner is when selling a home. Not because the property itself is worth less—solar systems provide ample savings to anyone that owns one. But when someone tries to sell a house with a solar system they’re still paying off, they’re now trying to sell two things at once: the house AND the solar system loan.
Most solar buyers don’t have enough disposable income to pay for a solar system out of pocket and so they leverage financing plans that may take 10, 15, or even 25 years to pay off depending on the details of the loan.
Homebuyers try to avoid taking on any loan payments that are outside of their new mortgage. Depending how far along the homeowner is in their solar loan contract, there are several options available to address this issue:
Option 1: The best option would be to convince the prospective homebuyer to contractually take on the solar loan payments. If the buyer really loves the home, they may be willing to pay these bills to lock in ownership of the property.
Option 2: If there isn’t a buyer willing to take on the solar loan, the homeowner may have to lower their desired sale price for their home in order to compensate for solar loan payments.
Option 3: The last option would be to use the money received from the sale of the home to pay off the outstanding balance of the solar loan.
This gets more complicated when involving a leasing agreement or a PPA with another company since the homeowner has to not only sell the house, but also sell a separate agreement with the company in question.
Warning:
If you’re selling your home but still have a solar loan, you may want to avoid potential buyers who will only purchase if the solar panels are removed from your home. This is the worst-case scenario, in which the homeowner will have to pay for the removal of the panels as well as continue to pay them off through their solar loan payments.
So, what can we learn about solar causing a decrease in the value of a property? Homeowners should have a plan before they decide to go solar:
- Know how long they’re going to live in their home
- Know how long they’re going to take to pay off their solar loan
- Know how they’re able to save more to own their system faster
Homeowners can avoid the majority of situations that would cause them to lose value on their home by going solar by making smart moves at the top of their installation with the right solar partner.