So, you’ve just found the perfect home, but it has one major feature you know nothing about—solar panels.
Suddenly, endless questions start flooding your mind. Is having solar panels on a house a good thing or a bad thing? Do solar panels require maintenance that I might not be able to handle? I don’t know anything about solar panels. What should I do?
The questions are endless. But don’t let that stop you from buying that home. We are here to answer some of the most commonly asked questions when it comes to buying a home with solar panels.
Let’s get started and by the time you finish this article, you will have most of your questions answered. This will help you buy that perfect home without hesitation.
What Are the Pros and Cons of Buying a Home with Solar Panels?
Just like anything else, buying a home with pre-existing solar panels has pros and cons. So, let’s go over them. Then you can decide for yourself whether you want to proceed with buying that home.
Pros:
- It will help lower your utility bills.
- Increase the value of your home.
- It will help lower your carbon footprint.
- Longevity-most solar panels last for more than 20 years.
- Solar panels require very little maintenance.
Cons:
- Solar panels can’t be taken with you if you ever move.
- Solar panels are limited by their surroundings. That means growing trees, etc. could result in a less effective system at some point.
- Some people think solar panels are an eyesore.
- If the solar panels are older than 20 years, they generally have reduced output.
So…Should You Buy a Home with Solar Panels?
A home with rooftop solar panels isn’t for everyone. However, they do provide clear benefits, especially for homeowners who need lower utility bills. This is because having lower utility bills is something a homeowner will benefit from month after month and year after year. And that really adds up!
Additionally, there is a huge push toward switching to and using more clean energy solutions here in the U.S. And having solar panels will definitely help reduce your carbon footprint.
But if you find the disadvantages of using solar outweigh the benefits in your particular situation, then you might want to go a different route. Only you will be able to determine whether a house with solar panels is right for you.
Now, if you’ve decided to buy a house that has solar panels, you might have been told about a PACE loan. But what is a PACE loan? Let’s go over that.
What Is a PACE Loan?
PACE stands for Property Assessed Clean Energy. This program enables a property owner to finance 100% of eligible upfront costs of energy-saving and other eligible home improvements to their home and property. It will then allow the property owner to pay the loan back over time.
How Is a PACE Loan Paid Back?
A PACE loan isn’t paid back like a traditional loan. A PACE loan is a voluntary assessment. A PACE assessment is a debt of property that puts a lien on your home. That means the debt is tied to the property rather than the debt being associated with the owner as is the case in a traditional loan.
Since a PACE loan is tied to the property, that debt stays with the property when it’s sold. That means the PACE loan repayment obligation will transfer to the new property owner once they take possession of that home.
So don’t let the fact that the home has solar panels deter you from buying it. Should you decide to move and there is still a balance due on the PACE loan, you can also transfer that debt to the next homeowner (if they qualify).
Can the House Be Taken from Me If I Don’t Pay My PACE Loan?
Unfortunately, yes. If you don’t pay your PACE loan, it could cause you to lose your home. However, generally, a homeowner has an extended period of time in which to make the loan payment before any foreclosure proceedings begin.
The Pros and Cons of PACE Loans
Let’s go over the pros and cons of PACE loans.
Pros:
- Loans are provided by large sources of private capital.
- Repayment is spread over many years.
- PACE loans are extremely secure.
- The high security of PACE loans (because they are tied to a property tax bill) result in low interest rates.
- A PACE loan can help some property owners deduct payments from their income tax liability.
- This program also enables municipalities to encourage renewable energy and efficiency while not putting their general funds at any risk.
Cons:
- The PACE program is only available to property owners.
- Portable items such as screw-in light bulbs, traditional refrigerators, and the like can’t be financed with a PACE loan.
- A PACE loan isn’t available for investments that are below $2,500.
- Some mortgage lenders aren’t in favor of PACE loans because the PACE loan would be paid before the mortgage lender if the property goes into foreclosure.
Can I Pay Off a PACE Loan Early?
There is no prepayment penalty for paying off a PACE loan early. However, there is a processing fee that is charged if you pay it back early. Additionally, there might also be some interest due according to the amortization schedule that you might have to pay as well.
Home Solar Panel FAQs
Here are the most frequently asked questions people have about solar panels on a home.
Is it bad to buy a home with solar panels?
Since the solar panel benefits outweigh the negatives of having solar panels on a home, most people agree that buying a home with solar panels is a smart decision.
There is one caveat though…which is that the solar panels on the home are owned and not leased. Leased solar panels are an entirely different ballgame than owned solar panels. Unfortunately, the information about a leased solar panel system is outside of the scope of this article.
One of the main reasons people love their solar panels is because they save money every month on their utility bills and because having solar panels on their home increases the home’s value.
Do solar panels hurt the resale value of a home?
No, solar panels don’t hurt the resale value of a home. In fact, having solar panels on your home actually increases the resale value of your home, but only if the solar panels aren’t more than 20 years old. But even then, it’s common for solar panels to last and perform well beyond 20 years. However, they do begin to not produce as well as they get older.
What should I look for when buying a home with solar panels?
There are a few questions you should ask the seller when buying a home with solar panels.
- Is your solar panel system owned or leased? It’s much better for a homebuyer if the system is owned. Solar leases, which are generally 20 years or so, work much differently than the contract for an owned solar panel system.
- Which company manufactured the panels for your system? You will need this for the manufacturer warranty information.
- Who was the installer of your solar energy system? You will need this for the workmanship warranty.
- Is net metering available? Net metering allows a homeowner to sell the excess energy produced by the system back to the electric company.
- How big is the existing solar energy system? It’s essential for you to find out how big the existing solar energy system is. Having this information will enable you to figure out how much electricity the system is capable of offsetting. It will also help you determine approximately how much you will save on your energy bill each month. A helpful tip here is to ask the seller to provide you with copies of their previous utility bills, so you have something to reference.
Do solar panels void a roof’s warranty?
Well, yes and no. When solar panels are installed on a roof, the roof warranty is voided, but only for the portion of the roof where the panels are installed.
However, you shouldn’t worry too much about that because that portion of the roof will be covered under the solar installer’s workmanship warranty. Generally, a workmanship warranty is usually for a period of 10 years, and it covers the portion of the roof he or she worked on.
What are the most common problems with home solar panels?
There are several common problems that come with a home that has solar panels. In order to make an educated decision about whether a home with solar panels is right for you, take a few minutes to consider the following solar panel problems.
- Roof issues. Generally, your roof will be OK, but it’s good to inspect your roof from time to time so you can spot a potential problem early.
- Electrical wiring issues. Solar panels sometimes experience faulty wiring, loose connections, corrosion, and oxidation, all of which will interfere with electricity production. Never attempt to address an electrical issue yourself. Always hire a licensed professional who has experience working on a solar energy system.
- Micro-cracks. Micro-cracks are very small cracks on panels that are almost invisible to the naked eye initially. However, with time and weather changes, those micro-cracks will grow. These micro-cracks are usually the result of careless shipping and handling. This is why it’s important that you hire a reputable professional to handle the shipping and installation with the necessary care.
- Hot spots. Hot spots occur when the panels get too warm, then they overload. Hot spots are usually caused by the accumulation of dirt on the panels, among other things.
- Snail trails. These are the brown lines that show up on your panels and are caused by several factors, one of which is defective silver paste that’s used during the manufacturing process.
- Birds. Birds can be your solar panels’ worst nightmare. Birds will frequently nest underneath the panels, which prevents them from working properly. If you frequently see birds on your roof, you might have to hire someone to install some bird roofing solutions such as mesh wire or spikes.
- Inverter Problems. A solar panel inverter is what converts the direct current from the sun’s energy to the alternative current you use in your home. Unfortunately, inverters aren’t very durable. Most homeowners report having to change their solar panel inverters every 10-15 years or so.
Do solar panels require maintenance?
Solar panels require very little maintenance. Generally, the only routine maintenance you might need to perform is periodic cleaning to remove all the dirt, grime, leaves, and other debris that might be obstructing the sun’s rays.
What’s Next?
If you want to buy a home with solar panels, or any home for that matter, please Contact Lakeland Real Estate Group today! We all live in, love, and have been respected members of this community for more than 20 years. So you are getting more than just someone with a real estate license, you are getting a loyal friend and neighbor who will be by your side every step of the way and beyond!
About the author: The above real estate article “Pros and Cons When Buying a Home with Solar Panels” was written by Petra Norris of Lakeland Real Estate Group, Inc. With over 20 years of combined experience of selling or buying, we would love to share our knowledge and expertise. Petra can be reached via email at petra@petranorris.com or by phone at 863-712-4207