Congratulations! Buying a home with solar panels is an exciting opportunity to enjoy lower electricity bills. However, before you sign the dotted line, it’s important to understand the key details about the system’s ownership, maintenance, and financial implications. Knowing what to expect can help you avoid costly surprises and ensure you’re maximizing the benefits of your solar energy system.
This home buyer's solar guide will walk you through everything you need to know for a successful transition to your new home.
Don't want to read? Watch the video below for a recap of what's shared in this blog.
Solar Panels and Your New Home: What to Consider Before Buying
1. Understanding Solar Ownership Models
One of the first things to determine is whether the solar system is owned outright or under a financing arrangement. There are three main ownership models:
- Owned and Paid Off: If the solar panels are fully owned by the seller, they transfer to you with the home—no extra steps needed! This is the best-case scenario, as you’re inheriting a valuable asset that will reduce or eliminate your electricity bill.
- Financed with a Loan: Some homeowners finance their solar systems with a loan. If the seller has an outstanding balance, the loan typically needs to be paid off before closing or assumed by the buyer.
- Leased or Under a Power Purchase Agreement (PPA): In these cases, a third party owns the system, and the homeowner pays a monthly fee for the electricity it generates. If the system is leased, you’ll need to assume the contract and meet any credit requirements. Keep in mind that these arrangements don’t necessarily add value to the home.
2. Evaluating System Performance and Maintenance
Before finalizing your purchase, take time to assess the system’s performance and maintenance history. Here’s what you should do:
- Request System Documentation: Ask for prints or drawings of the solar system, including details on its design, specifications, and warranties. If the seller worked with a reputable installer, they should have a completion binder with all the necessary information.
- Check System Performance: Compare the system’s current energy production to its original performance. Ask the seller for past energy bills or monitoring data to see if production has declined over time.
- Schedule a Professional Inspection: Consider having a solar company, like Paradise Energy, perform a system check-up to ensure the panels, inverters, and other components are in good working condition.
3. Understanding Warranties and Service Agreements
Solar systems typically come with two types of warranties:
- Manufacturer Warranties: These cover defects and performance issues for solar panels, inverters, and other equipment. Most manufacturer warranties transfer to new homeowners at no cost, but it’s best to confirm this before buying.
- Installer Warranties: The original installation company may have provided a workmanship warranty. Paradise Energy's Triple Ten Guarantee, which includes a workmanship warranty and production guarantee, transfers to new homeowners at no additional cost.
If you want added protection and peace of mind, consider enrolling in a Paradise Protect Plan, our solar maintenance service plan designed to keep your system running at peak performance.
4. How Solar Affects Your Electricity Bill
Understanding how your solar system interacts with your electric bill is important. Here's what to check:
- System Size and Production: Know the system’s capacity in kilowatts (kW) and its expected annual or monthly production. This will help you estimate how much of your electricity needs will be covered.
- Billing Structure: Review past electric bills to see how much energy the system has offset and what you might still owe to your utility provider.
- Net Metering Benefits: If your system generates more electricity than your home uses, your utility company may offer net metering, which provides credits for excess energy sent back to the grid.
5. Financial Incentives and Insurance Considerations
While most solar incentives, such as the federal tax credit, are claimed by the original owner, you may still be eligible for Solar Renewable Energy Credits (SRECs). When registered in your name, these credits can generate income, so be sure to inquire about the process.
6. Monitoring and Insurance Considerations
- Monitoring Access: Ensure the seller transfers the system’s monitoring portal credentials to you so you can track its performance.
- Insurance Coverage: Adding the solar system to your homeowner’s insurance policy is highly recommended to protect against potential damage from weather events.
7. Determining the Solar System's Value
The resale value of a home with solar depends on several factors:
- Age of the System: A newer system with a long remaining lifespan obviously adds more value than an older one nearing its expected end. The expected lifespan of a solar system is over 30 years.
- Energy Savings: Buyers typically assess how much they will save annually on electricity and use that to determine the system’s worth.
- Curb Appeal: Some buyers may consider the system’s aesthetics when evaluating a home.
Next Steps: Ensure a Smooth Solar Powered Homeownership
Purchasing a home with solar doesn’t have to be complicated—especially with the right guidance. To help you navigate the process, we’ve created a Home Buyers Solar Checklist outlining everything you need to review before closing. Download your free copy here!
Additionally, our expert solar maintenance team is here to help with:
- System check-ups before closing to ensure optimal performance
- Routine maintenance through our Paradise Protect Plans for long-term system care
If you have questions about your solar system or need assistance with maintenance, contact us today! We’re here to make your transition to solar-powered homeownership as seamless as possible.
