Solar energy is becoming an increasingly important consideration in today’s real estate market. With energy costs a concern for many homeowners, solar panels can offer significant benefits, including reduced electricity expenses and improved energy efficiency.
But when it comes to buying or selling a home with solar panels, there’s an important distinction to understand: not all solar systems are created equal. Whether the panels are owned or leased can make a substantial difference in a property’s marketability, potential value, and the responsibilities a buyer may be taking on.
Owned Solar Panels: A Valuable Feature
When homeowners own their solar panels outright, they can benefit from lower electricity costs without requiring a buyer to assume an ongoing solar lease. That can make a property more appealing, particularly to buyers concerned about future energy expenses.
Owned panels may also contribute to a home’s market value, although the amount depends on the system’s age, condition, energy production, and the local market. The cost of installation does not necessarily translate into an equal increase in value. Spending $30,000 or $40,000 on a solar system does not automatically mean the home is worth that much more.
However, documented energy savings and the potential for lower ongoing costs can be meaningful selling features.
Understanding Net Metering
One of the valuable benefits associated with many solar installations is net metering. Eligible systems can receive credits for excess electricity sent back to the electric grid.
During sunny months, especially in summer, a system may generate more electricity than the household uses. The resulting bill credits may help offset electricity costs during shorter winter days. Actual credits and savings depend on the utility, system, and applicable net-metering rules.
For buyers, reviewing the home’s solar production history and electric bills can help put those benefits into perspective.
Solar Renewable Energy Certificates (SRECs)
Massachusetts previously offered Solar Renewable Energy Certificate incentive programs for eligible installations. Qualifying systems could earn certificates based on electricity production, potentially generating additional income for the rights holder. Some older systems may still have benefits remaining under their original arrangements.
When considering a home with solar, it is worth asking:
❖ Was the system enrolled in an SREC program?
❖ Are any certificate benefits still available?
❖ Who owns the rights to those benefits?
❖ Can those rights be transferred to the buyer?
Not every installation qualifies, and program terms vary by installation date and agreement.
Leased Solar Panels: Benefits and Considerations
Leasing allows homeowners to use solar energy without paying the full upfront cost of purchasing a system. Typically, the homeowner pays a monthly fee while benefiting from reduced electricity expenses. But a lease can complicate a sale.
In my experience selling homes with leased solar systems, the lease generally needs to be transferred to the next owner, subject to the agreement. Not every buyer wants that obligation, and I have seen situations where a solar lease prevented a sale from moving forward.
Before buying or selling a home with leased panels, review:
❖ Lease terms: How many years remain?
❖ Monthly payments: What will the new owner be required to pay?
❖ Transfer requirements: Does the solar company need to approve the buyer?
❖ Roof condition: Who pays if panels must be removed for roof repairs or replacement?
❖ Warranties and maintenance: Who is responsible for servicing and repairs?
Leased solar can offer savings, but understanding the full agreement is essential.
How Does Solar Affect a Home’s Value?
As solar becomes more common, appraisers may have more comparable sales to help assess how buyers value owned systems. An owned system may contribute to value, but not necessarily dollar for dollar with its installation cost. A leased system generally does not offer the same direct ownership benefit and can add obligations for buyers.
From a marketing standpoint, a well-maintained, owned system with documented savings can be attractive. With energy expenses on buyers’ minds, the opportunity to reduce future electricity costs can be a real advantage.
Can Solar Make Your Home Net Zero?
Solar panels can play an important role in creating a net-zero energy home. A net-zero energy home is designed to produce approximately as much energy as it consumes over a year, under the applicable accounting method. But having solar panels alone does not automatically make a home net zero. Insulation, air sealing, efficient heating and cooling, and overall energy use all matter.
The Bottom Line
Every property and solar installation is different. Whether you’re buying or selling a home with solar panels, understanding how the system affects the property’s value and marketability is important.
If you’re considering buying or selling a home in Franklin County or the surrounding area, I’d be happy to put my experience to work for you.
Corinne Fitzgerald
FITZGERALD Real Estate
Serving Franklin County and Beyond
Call or Text: 413-320-9509
[email protected]
Tune in every Tuesday morning with Nick on WHAI right after the 7:30 news, and with Jess on Bear Country right before 9 a.m.