Solar Panels? Should you get them?
If you live in a Houston suburb, you are practically guaranteed to have had a solar panel salesperson knock on your door in the last few years.
Solar is catching on in lots of areas of the country and Houston is no different. There are various tax credits and energy efficiency benefits to having a solar system.
But is it right for you?
Today I'm going to tell you the primary benefit and then the other considerations of adding solar panels to your existing home.
The major benefits:
You create most or all of your required power and could negate your standard power bill completely, and some people even get an annual rebate because they created more power than they consumed. If you have strong feelings about sustainability and the environment and like the idea of not personally pulling on the power grid that's also a benefit.
Things to consider:
- If you finance the panels, you will have a monthly payment for the next 10-20 years on the whole system...be careful this payment is not similar or higher than what your normal power bill would have been without solar. You're simply swapping one bill for another.
- If you need to sell the house...the buyer has to qualify for a home loan and ALSO they have to qualify to take over your solar loan in addition to the home loan. This will reduce some buyer's ability to buy a house. I have seen one recent instance where the solar company wanted to jack up the financed rate for the new buyer and it took the solar monthly payment from $200 to over $500. This is not helping the home sell at all.
- Like a pool or other major non essential upgrade, buyers do not seem to value solar panels at their true install cost. While they might be willing to pay an extra 10-15K on a home with a full solar system, they rarely want to pay an extra 30-40K on a home with solar panels.
- Frequently, the roof needs to be replaced before installing a system...which is fine if your roof needs it. It's a 10-15K additional cost if your roof has tons of life left in it. How many months of your power bills would not replacing a 10-15K roof pay for?
- Solar panels WILL NOT "increase the value of your home" unless the system is completely paid off. I have had a client tell me that a solar salesperson told them the home's value would raise by 20-30% because of the solar panels. This was an outright lie. The home value doesn't move too much. The additional solar loan balance is very real. In actuality, the presence of a solar system is extremely likely to cost you some of your equity if you have to pay it off or split the difference with a home buyer when you sell.
If you can find a home with a paid off solar system and buy it, that's great. But its usually a better outcome for the buyer than the seller. If you plan to stay in your home for the next 10+ years and like the idea of no power bill someday, or if you have the ability to buy the system outright, then I say have at it if you'd like.
However, if you think you may need to move in the next 5-7 years, and you plan to finance the install, I would strongly encourage you to forgo solar panels and put that money into a kitchen or bathroom upgrade instead.
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of Real Estate conversation.