By 2020, over a million US houses would have installed solar systems. What has caused solar power systems to become so popular?

One reason is that the cost of setting up a solar panel has continuously declined. Many people now recognize the importance of solar energy. Furthermore, solar power has enabled thousands of homes to savor the great benefits of continuous renewable energy.

Notably, among the most popular solar panel solutions for most homeowners has become leasing in recent times. Can it be challenging to obtain a mortgage loan if you are leasing solar panels? Because this question calls for a direct answer, it’s time to get one!

Things to Know Before Leasing or Buying Solar Panels

Is purchasing a home with leased solar panels the best option for you? That relies on a few crucial things:

How Much Sunlight Will the Roof Get?

Solar panels require a lot of sunshine to work correctly. Examine your property and the yards of your neighbors for trees. Seeing as the panels were installed, have the trees expanded and begun to throw too much shade? If this is the case, some tree cutting or transplanting (along with some neighborly bargaining) may be required.

Although solar panels play a pivotal role on south-facing rooftops, west-facing and east-facing rooftops can still collect a lot of electricity provided they catch enough sunshine during the day.

Will You Rent or Buy Solar Panels?

If you’re considering purchasing a home with solar panels, find out if they’re on Lease or owned. As per Consumer Reports, owning your home’s solar panels is the best economic option because solar panel leaseholders save less than people who buy them outright.

Moreover, the average lease length of solar panels is 20 years. If you purchase a property with years remaining on the Lease, you will become the lessee.

Solar Panels on Roof

How About the Resale Value?

Solar panels, like new kitchens or redone bathrooms, boost the value of a property. Solar-paneled homes retail for 1.4% more than similar houses without panels.

The PV, i.e., photovoltaic value, determines the amount of energy produced by Solar panels and follows the Uniform Standards of Professional Appraisal Practice. The Photovoltaic value is a method that house sellers and purchasers can use to obtain the most precise assessment of a property’s solar energy system production.

How Much Upkeep Can You Expect?

The benefit of solar panels is whether they perform their job with no effort on your side. That being stated, you’ll want to take better care of your asset. If properly maintained, solar panels can last as long as 30-50 years.

To maintain the panels in good condition, you’ll have to clean them. The process includes clearing debris and dirt twice a year after thunderstorms that may leave them coated in mud. Cleaning will guarantee that the panels receive sufficient sunlight to function correctly.

Is It Possible to Get a Loan for A Property with Solar Panels?

Purchasing a house with a solar panel system might impair your ability to obtain a mortgage. Whether you buy or lease the solar panels and how they were funded may impact your mortgage.

If the owner of your potential house owns the panels entirely, that’s perfect. Why? Because the panels will most likely not affect the property’s price. However, if you purchase a property with leased panels, you should negotiate the lease terms and monthly expenses connected with the system.

What Happens when The Roof Needs Repair?

Rooftops with solar panels must be in excellent condition, although they may need to be replaced at some point.

If a solar-paneled roof has to be changed, the mounting hardware and the panels must be removed and reassembled. Solar panel installers typically perform this job, but a roofing firm can help as well. In addition to the roof costs, re-installation might cost anything between $1,500 to $6,000.

What Is the Difference Between Solar Financing and Solar Loans?

As the buyer, you want to know if the house’s seller owns the panels and is paying installments through a mortgage or finance.

If a solar loan is used to pay for the panels, the seller will hold the mortgage even after the house is sold. That implies the buyer is no longer obligated to pay loan installments.

If the panels were acquired using Property Assessed Clean Energy (PACE) funding, the financing stays tied to the estate because payments are paid through real estate taxes. Those payments will be shifted to the house buyer as a result.

Solar panels on the roof of a building

Will Solar Panels Truly Save You Money?

That depends, yet again.

Owning the new house’s solar panels will save dollars on energy expenditures. The sum you save will be determined by the magnitude of solar energy generated, local electric rates, and the number of watts the utility company compensates you when you transfer it back to the power grid.

The National Utility Rate Database enables you to look up present energy rates in different parts of the state or country. It helps estimate how much money you may save on monthly utility bills if you buy a home with solar panels.

Advantages of Purchasing a Home with Solar Panels

Many homeowners acquire solar panels altogether or with the assistance of a loan. Others prefer to lease their equipment to save money on installation costs.

The primary distinction between these two types of solar purchases is ownership. Whether you buy solar panels, you have complete ownership of the system. However, if you lease the panels or sign a power purchase agreement (PPA), the solar equipment is owned by a third party.

Property Value Increases

Homes with solar panels are sold for 4.1% more than homes without panels. This implies that house sellers might earn an extra $9,274 on a property sale. Homes in some sections of the nation may sell for considerably more.

Reduced Power Bill

Solar panels typically cost $200-$250 per unit. This depends on the manufacturer and number of panels, but you’ll spend less on power costs over time. According to Consumer Affairs, shifting to solar can reduce energy expenditures by 75%. This implies that you might save several thousand dollars over time.

Tax Credits and Other Benefits

Solar may provide you with more than just lower electricity bills/costs. It can also provide you with tax advantages, federal tax credits, and rebates if you are eligible.

Improved Grid Flexibility

“Off the grid” indicates that you are not reliant on utilities for power. You may, however, determine the amount of grid connectivity you need. You can connect partly if you do not wish to be entirely off utilities.

Solar Panels

How to Exit a Solar Lease Safely?

Many households can now get loans or incentives to install a solar panel. Unfortunately, this was not always the case. Several solar panel owners are still bound by existing solar leases.

So, how can you escape from an unfavorable solar lease? It might be challenging to do so unless you pursue legal action. Nevertheless, a few possibilities remain.

Cancel the Lease Before Installation

It is simpler to terminate the contract if the system has not yet been installed. Most businesses provide cancellation periods before the installation begins. You won’t need to be concerned about fines if you respond quickly.

Typically, the window is roughly 30 days just after the signing of the contract. Some businesses may even give you the terms of terminating the contract early. As a result, properly review the agreement before signing, so you may cancel beforehand if required.

Cancel the Lease Following Installation

If you sell your house, transferring the Lease to the new owner should be simple. However, if he is not interested, then you can try and buy the remaining worth. Check the Lease to see if this option is included.

A few leasing firms may be willing to release you from the contract by acquiring the equipment for an acceptable market value. Is this something you can live with? It is worth noting that the price decreases as the lease term extends.

Bottom Line

Introducing solar panels to the list of things to look for when choosing a home raises some interesting dilemmas. It would be best if you considered the typical energy savings and how having solar panels influences the cost. Are all of these criteria compatible with your budget?

One issue you do not need to be concerned about is maintenance. So mark that off your checklist because solar equipment is famous for its endurance and comes with a warranty on the panels. Renting solar equipment needs far less maintenance from your end because the system is maintained by the firm that owns it.