What a Real Estate Agent *Really* Thinks About Your Solar Panels

published Oct 3, 2022
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suburban house with solar panels on roof
Credit: Jason Finn/Shutterstock

Solar panels harness the energy of sunlight to power your home. They not only save you money — you’re paying a much smaller part of the electric bill, after all — but they’re better for the environment. 

But wow, are they pricey! According to Angi, the average cost for homeowners to install solar panels is around $26,000. While there are generous tax incentives that can drive down that cost considerably (and you will recoup costs down the road) it’s still quite an investment — especially when you had your heart set on something a bit more aesthetically pleasing, like a kitchen remodel.

As I see more and more solar panels pop up on roofs where I live in Staten Island — not to mention the solar company reps who pop up at my front door from time to time — I began to give it some thought for my own home. So far, I’ve avoided the hard sell from those friendly yet persuasive reps, so I decided to ask a real estate agent their thoughts. After all, if I’m even lightly considering dropping tens of thousands of dollars on home improvement, I want to know whether it will actually save me money and increase my home’s value in the long run.

“I think solar panels can be a great investment,” says Kristina Morales, a Realtor at Kristina Morales Real Estate in Cleveland, Ohio. “With the net metering program benefits, where a homeowner sells back excess energy to the electricity company for a credit on their bill, and the federal tax credit, investing in solar panels can be a great idea.”

What Homeowners Should Consider Before Switching to Solar

Unless you’ve got a ton of extra cash to play with, the decision to go solar is not an easy one. Here’s what Morales says homeowners must consider before switching to solar:

Payback Period

While there’s no doubting the environmental benefit of cutting the cord with your electric company, from a financial perspective, you are spending a lot of money in the hopes of saving money… some day. 

That’s why Morales says homeowners must consider the payback period when installing solar panels — that’s the time it takes for them to save enough money otherwise spent on electric bills to earn back what they paid for the panels. The longer the payback period, the lower the return on investment.

“Factors such as savings from lower utility bills, federal tax savings, local incentives, as well as installation and financing costs should be taken into account when calculating the payback period,” says Morales.

The average payback period is around 8 to 12 years, according to Morales. A report from Redfin says that as of 2021, the average homeowner stayed in their home for 13.2 years, which means that on the higher end of the payback period time frame, a homeowner might only reap the financial benefits of those solar panels for about a year before moving on to a new, possibly solar panel-less home.

Sunlight Exposure

Solar panels are powered by sunlight, so the amount of sunlight exposure — or lack thereof — for your home is important to consider. A south-facing roof for a home located in the Northern Hemisphere is ideal because it will catch the most sunlight (it’s the opposite for the Southern Hemisphere) but you’re not necessarily in the clear if your home fits the bill.

“If your home is surrounded by trees or buildings [that block sunlight], it will make your solar panel investment less valuable,” Morales says. 

And while you don’t have to live in the Sunshine State to take full advantage of a solar-powered home, it would certainly help: Morales notes that some states are above or below the average days of sunlight, so your location is an important factor in your decision to go solar.

Lease vs. Purchase

Leasing solar panels allows you to reap the immediate benefits of a lower electricity bill — but it will throw some serious shade on any tax incentives you were hoping to snag. 

“In general, homes with solar panels sell for a premium, but only if they are purchased,” Morales says. “Leasing the panels does not increase the home’s value because the lessor retains any incentives. 

Plus, much like a car lease, you’re paying monthly for solar panels that won’t ultimately be yours.

How Solar Panels Affect Resale Value

Can you take solar panels with you when you move? Technically, yes. But it’s not easy or cheap, so they’ll likely stay put — that is, unless you are currently leasing them and your buyer doesn’t want to take over lease payments. Then, the solar company will be showing up at your door — or actually, your roof.

But if you’ve bought them and they are indeed staying, that’s a good thing, according to Morales.

“When my client buyers purchase a home with solar panels, they are excited about the ability to conserve energy and costs and are willing to pay a premium, especially if the home has other ‘green’ features,” she says. This could mean energy-efficient appliances, water-saving toilets and showers, and just about anything else that puts less stress on the environment and your wallet.

Some buyers will love your solar panels. Others might be skeptical; Morales says these folks will need a tutorial on what solar energy can do for them. 

“If you are selling a home with solar panels, it would be a good idea to show the cost savings pre- and post-installation,” she says. “Many buyers will require some education to become acclimated on how it all works, so any information you can provide to help shorten the learning curve is useful.”

What To Know About Buying a Home with Solar Panels

If you’re on the buying side of a home with solar panels already installed, you’re in luck — maybe. 

Before you celebrate not having to pay out that hefty investment — not to mention having missed those installers crawling all over your roof — you’ll need to know more about the solar panels in question, advises Morales. Here are her tips:

  • Find out if the panels were purchased or leased. If they are leased, you are on the hook for continuing the lease payments. If they were purchased, make sure they are paid in full and not financed with payments remaining.
  • Know the age of the solar panels. Solar panels can last anywhere between 25 and 30 years. Unless your seller was among the first to make the switch to solar, you’ve likely got a number of years before you need to do anything. “The younger the system, the more it adds a premium to the purchase price,” Morales says. Still, you’re going to want to make sure there’s a warranty in place for the lifetime of those panels.
  • Budget for repairs. Solar panels are durable and built to last, but they also get hit by wild weather at times. Be sure to budget for any necessary repairs or outright replacements as time goes by.

Solar energy is a good thing. But whether it’s a good thing for you remains to be seen. If you’ve got plans to sell your home in the next few years, solar panels might not be the best investment. But if you’re in your forever home or are looking at buying a home with panels already in place, then more (solar) power to you.