Solar panels effect on sales?

[Christopher McConnell]

Hi everyone,

I work for a solar company in California. We install systems for 20 year leases, but also loans with no upfront costs. I’m just curious, for those of you flipping homes, buying homes or with rentals. What has been your experience with solar on the home? Have any of you added solar and seen it increase the value? If so, do you have a solar guy you work with that offers big referrals? Have the leases held up any of your sales? How much value has solar added?

Any answers are helpful!

Thank you!

[Chris Mason]

Originally posted by @Christopher McConnell:

Hi everyone,

I work for a solar company in California. We install systems for 20 year leases, but also loans with no upfront costs. I’m just curious, for those of you flipping homes, buying homes or with rentals. What has been your experience with solar on the home? Have any of you added solar and seen it increase the value? If so, do you have a solar guy you work with that offers big referrals? Have the leases held up any of your sales? How much value has solar added?

Any answers are helpful!

Thank you!

 You're not going to like this answer, as someone that sells the stuff. This is just my very opinionated $0.02 based on the real estate purchase transactions that cross my desk, I offer no opinion on the value of solar panels in terms of saving the world or any of that.

Owned free/clear: No impact, typically zero value add. Unless someone has an emotional attachment to the idea, in which case call it $5k in the SF Bay Area if you are being generous. Most critically, homebuyers typically need mortgages, meaning they are bound to what the appraiser says the home is worth. Appraisers often have a hard time finding market data to support solar adding value to the real estate itself. LA may be different than Oakland or San Jose, it's the desert down there. San Francisco of course never sees sunlight, so solar doesn't really exist there.

Clouded title that the buyer is expected to take over: Just that. I don't care what you call it, if it's an obligation the buyer is expected to assume, then they are conveying real estate with clouded title. This negatively impacts the value of the real estate, no different than (worse actually) if the buyer was expected to take over the seller's credit card payments or car lease payments. Buyers typically want to buy a house, they don't want to also take over the monthly payments for the seller's pet project or hobby. 

The stupid PACE or w/e it is thing that makes it be a part of the property tax bill: REALLY impacts value, and also in a VERY negative way. Also, these frequently screw up the homeowner's ability to refinance. Also it is 100% crystal clear to me that it is never disclosed to the homeowner that you will probably have to pay off the outstanding balance out of net proceeds when you sell, assuming you sell to a home buyer getting a normal mortgage, they are always shocked and aghast and insist that the solar salesman "promised" them something different, and as conveyed to me via the Realtors they want me to "look into it" (you want my magic crystal ball to help me parse the exact words of the non-binding irrelevant verbal statements of a door-to-door salesman who was speaking when I was not present?). Every. Single. Time.

I tell my clients that they only way they can afford solar stuff is if they can write a check for the full sales price. If they need to cloud title, that means they can't afford it. Ideally, the solar panels should NOT be affixed to the roof at all. They can rest upon the roof and have little attachment thingies you can snap on or snap off without any tools, but they shouldn't be affixed to it. That way, the solar panels don't become part of the real estate, and remain personal property (like a car or TV that may rest upon or within the property, but isn't part of the property). I know no one sells that, but that's the only solar I'd really sign off on. If someone were selling that, there'd be an obvious lender/solar partnership opportunity, but no one sells that.

I'm generally pro green, but not when it screws up people's personal financial lives or the value of the home(s) that they own.