Should I get solar panels for my home?
While solar panels are a “green” way to produce energy and will definitely reduce your cost of power there are some down sides the solar companies won’t tell you.
1. They typically come with a 20 year lease. The initial installation and the panels are no cost to the home owner but they must go through a rigorous credit check and sign a long term lease for the panels. The solar companies also put a type of lien on your home.
2. They don’t have set prices for the lease cost and the energy costs. That is negotiated home by home and you and your neighbor can contract with the same company with the same number of panels and have totally different deals.
3. The amount of sun your roof receives will depend on the cost of your power. If you are on a shady side of the street you may not have a cost benefit for solar panels.
4. You may want to sell your home before your lease is up.
Why would selling my home be an issue with solar panels??
There are several reasons having a long term lease can impact the sale of your home:
1. The buyer has to go through a rigorous credit check by the solar company. Credit levels are required to be higher than most lenders require so you may be eliminating a buyer who could easily qualify for a purchase loan but not for solar panels.
2. The deal you negotiated with the solar company may not be acceptable to all buyers. They may want a better deal and the only way they are going to get that is if the seller compensates them. It can get expensive for a seller.
3. Some people just don’t want solar panels or want a 20 year lease on anything.
4. A new electrical board has to be installed to deal with the solar panels and that can sometimes cause issues.
5. The solar company requires an application, credit check from buyer of home and then must remove the lien in order for the purchase lender to approve the loan. Timing is super important and if not done correctly can hold up the closing on your home.
All in all there is a long term cost benefit for most homes with solar panels but if you plan to sell in the short term you will be reducing the number of potential buyers on your home…and that’s never a good idea.