By Dayv Morgan
Considering Arizona’s abundant sunshine, rooftop solar panels are an appealing feature for homebuyers looking at a resale home.
Market indications show that the value of solar panels is often less than sellers hope for when selling, however. In the last 12 months, over 2,000 homes were sold in Maricopa through MLS. Of those, only 87 (4 percent) were listed as having solar panels; 63 were leased and 24 were owned.
According to DecisionData.com – based on two ZIP codes in Maricopa – let’s consider two scenarios: owned solar panels and leased solar panels.
A residential 5kW solar system will save a Maricopa resident up to $111 per month. A 10kW system will double your savings. That’s significant given the dramatic increase in electrical power consumption in summer months due to A/C usage. Rising electricity costs and higher-than-average electricity usage means more opportunities for savings with solar even as rebates and incentives have decreased over the years. The average cost for a new system is $18,000–$20,000. When selling, the added value to the sale price amounts to only about $10,000. Nonetheless, it still only takes about four or five years to break even if you factor in the annual savings on electricity.
Leased solar panels are technically not part of the home. Anyone buying the home may have to qualify with the solar company. Buyers may need a higher credit score than even the mortgage company requires to assume the lease, which may still have 15 years remaining. Homes with leased solar typically sell slower than homes with no solar, and may even sell for less. Furthermore, leased solar does not add value on the appraisal and lease payments often increase annually. Also, with most lenders, it increases a buyer’s debt-to-income ratio and, thus, decreases a buyer’s purchasing power.
Tips for selling:
Emphasize how much money you save. (Don’t be afraid to brag!) Provide buyers with written documentation on annual savings to help them understand kW and panel efficiency; they are more likely to see value if you can quantify the savings. Is it $100 per month? Three hundred? Include info in the MLS or leave a copy of recent electric bills on kitchen counter.
Help buyers recognize the value over the long term.
Dayv Morgan is a Maricopa Realtor and owner of HomeSmart Success. He can be reached at DayvMorgan@gmail.com.
This column appears in the August issue of InMaricopa.