Buying and Selling Homes with Solar Power in New Orleans
Looking to go green?
There are plenty of reasons to consider solar in New Orleans. Whether you’re looking to be more environmentally friendly, wanting more reliable power at home, or just looking to lower your Entergy bill, solar might be a good option.
If you are buying or selling a home with solar panels however, it can slightly complicate the process. Let’s talk about some of the things to consider if you’re buying or selling with solar in Greater New Orleans.
Owned, Loaned, and Leased Solar
When you get a solar system there are three options: buy it outright, finance it with a loan, or lease it. If the system is bought outright, it can be bought and sold along with the home with no issues or delays.
If the system was financed through a loan, there will be a lien on it that restricts its transfer until the loan is paid off. In the case of a loan, the seller can pay if off during closing, the buyer can pay it off, or the loan can be transferred to the buyer if the buyer can qualify for it on top of the mortgage loan.
Sometimes with a solar lien, the solar system cannot be included in the appraisal of the home because it is technically owned separately, almost like a vehicle would be. Usually the easiest thing here is for the seller to include the cost of paying off the solar system in the price of the home.
Some solar systems are only leased instead of purchased by the homeowner, and this can complicate the sale process even further. Leased systems are actually owned by the solar company instead of the homeowner, and cannot be included in the value of the home for appraisal purposes. In order for the home purchase to move forward, either the current owner has to buy out the lease, or the buyer has to agree to transfer the lease into their name. The details will depend on the specific lease agreement.
Resale Value of Solar
Solar panels are like any other substantial improvement or feature of a home - it can definitely add value but the value is likely to decline over time as newer versions come into style or are more efficient. The age of the system will help determine its value, how soon it will need repairs, and how soon it might become obsolete in terms of newer technology coming on the market.
The Department of Energy released studies showing that buyers are generally willing to pay a premium of around $15,000 for a home that has a solar system installed - and quick research will tell you that’s significantly less than the actual cost of the panels plus installation in most cases, even after the ongoing 30% federal tax credit.
So if you are planning to sell your home in the next couple of years, the best financial decision might be to wait until you move to make the switch to solar.
The value of a solar system also varies significantly based on the amount of power it generates. If you’re wondering whether solar would be a good fit for your home, Google has a handy tool called Project Sunroof where you can enter any address and see if solar is likely to pay off over time. If you want to put solar on a home you buy in the future - Project Sunroof is a great tool we can use during your home search.
Inspections and Repairs
As a buyer you may want the solar system itself to be inspected and to check and see if there is a warranty on the system that transfers with ownership.
Solar panels can also make it more difficult to determine the condition of the roof on the home you are purchasing and can make it more complicated to fix or replace the roof in the future.
What's on the market with solar?
If you’ve considered all of the above and you’re wondering what’s on the market right now in New Orleans with solar already installed - I’ve got you covered.
Let's dig deeper!
I’d love to hear from you about your own personal situation and what you’re looking for in your next home. Email me at [email protected] and let’s chat!