As New Yorkers welcome more and more solar panels to their homes, there are a few common questions asked by would-be buyers and sellers about what these systems mean for a real estate transaction. Solar homes represent major investments in renewable energy, reaping long-term rewards with substantial savings on an electricity bill and environmental benefits. What does this mean when one is ready to sell his or her home, or when one finds oneself interested in purchasing a home with existing solar panels? Here’s a closer look at what New York state homeowners need to know when buying or selling a solar-powered home.
Understanding Solar Panels and Home Value in New York
Homes with solar panels often have an edge in New York’s real estate market. According to solar home price analysis studies, properties equipped with solar panels typically sell faster and for higher prices than those without. This increased value comes from reduced electricity bills and the appeal of energy independence, especially as energy prices fluctuate. Buyers are often attracted to homes that offer sustainable energy solutions, and in New York, this trend is growing.
This added value depends on factors like the solar system’s age, type, the home’s location, and purchase method—whether leased, financed, or fully owned. Let’s look at what sellers and buyers need to know.
Selling a Home with Owned Solar Panels
If you own your solar panels outright, selling your home is generally straightforward. A fully paid-for solar energy system can be a strong selling point, allowing the buyer to take advantage of immediate savings on electricity bills without any financial obligations. For sellers, it’s wise to highlight how much the solar system has saved on monthly energy costs and outline the system’s expected lifespan and maintenance history.
In New York, homeowners may find it beneficial to work with real estate agents familiar with the solar market, as they can effectively communicate these benefits to potential buyers. Gather documentation, including installation costs, warranty details, and a summary of energy savings, to present to prospective buyers.
Selling a Home with a Solar Loan
For homeowners who financed their solar panels with a loan, there are additional considerations. If the loan is secured, often through a home equity loan, the seller typically pays off the balance before selling the property. For an unsecured loan, the seller can proceed with the sale without settling the loan, though they will retain the responsibility for ongoing payments.
In both cases, having solar panels can still be a valuable selling feature, as the home’s overall value may cover any outstanding loan balance. Sellers in New York should consult their lender and real estate agent to determine the best approach.
Selling a Home with a Solar Lease
If the solar panels are leased, the process of selling the home may require either buying out the lease or transferring it to the new owner. Many solar companies offer lease transfer options, making it relatively easy for the buyer to assume the lease and start reaping the benefits of solar energy.
Some buyers may be hesitant to take on a lease, so it’s helpful to present information on how the lease payments compare to average electricity bills. This way, they can understand the potential monthly savings. Sellers should be prepared to work closely with their leasing company to facilitate the transfer and explain the lease terms to the buyer.
Buying a Home with Solar Panels: What to Ask
For those considering buying a solar home, it’s essential to ask the right questions. Here are key points to discuss with the seller or real estate agent:
- Ownership Status: Determining if the system is owned, financed, or leased will impact your future obligations.
- System Age and Warranty: Understanding the age of the system can give insight into its remaining lifespan. Ask for warranty details, as most systems come with warranties that last around 25 years.
- Maintenance Records: Ask for a record of any maintenance performed. Regular maintenance is typically minimal, but it’s useful to know if the system has received any repairs or upgrades.
- Energy Savings History: Knowing how much the solar panels have reduced electricity costs for the previous owner can provide an estimate of your future savings.
These details can help you evaluate the financial benefit of buying a home with an existing solar system.
Transferring Solar Agreements in New York
In New York, solar lease or loan transfers generally require paperwork with both the solar provider and the new homeowner. Sellers should initiate this process early, as some companies have transfer fees or specific requirements. Buyers should review the lease or loan terms carefully.
Solar Panels and New York Home Inspections
During a home inspection, a licensed inspector will typically check the solar system for any visible issues, such as wiring, roof penetrations, and overall functionality. In New York, it’s becoming common to hire inspectors who specialize in solar energy systems for an in-depth assessment. For both buyers and sellers, a clean inspection can be a valuable reassurance, adding credibility to the investment.
What If You Want to Remove the Panels?
Buyers sometimes want to remove solar panels for aesthetic or functional reasons, but this can be a complex process. Removing panels involves working with the installation company and can be costly. Additionally, the home would lose the benefits of solar energy, which could increase utility costs. If you want to remove the panels, it’s wise to evaluate the overall costs and understand that reinstallation or relocation might not be feasible or economical.
New York-Specific Incentives for Solar Panels
New York State offers various solar incentives and tax credits to encourage solar adoption, making solar panel systems attractive to buyers. For example, the NY-Sun initiative provides financial incentives for residential solar projects. The federal investment tax credit (ITC) allows a deduction of a portion of the installation cost. Buyers in New York who are purchasing a home with solar panels should verify if they qualify for any local or federal incentives.
Final Thoughts on Buying or Selling Solar Homes in New York
Whether you’re selling a home with solar panels or buying one, understanding the financial, legal, and logistical aspects of solar ownership can help make the process smoother. Recognizing the full value of solar panels requires simplifying the transfer process, providing clear financial details, and keeping accurate documentation.
For New York residents, this knowledge is especially relevant, given the state’s commitment to renewable energy and its array of solar incentives. Homeowners and prospective buyers should stay informed and work with knowledgeable professionals to ensure a beneficial transition.