Buying House With Solar Installed

[J.P.M.]

I'm all about the best deal, and I do it all the time no matter what I buy. I myself would never act like it is something I want as a buyer. However, on the seller side, I would be just as persuasive as to pointing out the saving on utility they would be getting. If you are covering 95+% of you electric bill, and can prove it, nobody can say it has no value. On the flip side for me, if there was one solar panel in the front of the house where it can be seen, I would not purchase the home. I am about to get solar now, of course I am purchasing. I fully expect that if I were to sell my home in 5 years (no plan to do so, but never know what happens in life), and my system is owned outright, covering 95% of my utility, that my home would have a higher value that a similar home without solar. But I guess a buyer would need to agree, and I would need to be persuasive.

One point of many: It may cover 95 % of your bill, but maybe somewhere between 30 and 300% of a potential buyer's bill once they get in the house. On the 30 % end, the new buyer will have an undersized system that may well be difficult will be difficult to upsize. On the 300 % end, the buyer (if knowledgeable) probably doesn't want to pay extra for a system that is way oversized and overkill for his/her needs.

Example: there is a couple in my HOA who own a house from the sane builder as mine that is very similar to mine - same area/layout/materials. Two people, 1 dog. Both people work all day, weekdays, nice folks. Annual usage (from PV estimate requirements): ~ 20,000 kWh annually. Me: 2 people, no pets. everyone retired. Annual use : ~ 6,600 kWh. Energy use is highly dependent on personal choices and lifestyle.

Suppose some buyers think solar is ugly and wouldn't put it on their house if you PAID them the equivalent of 95% of your annual bill in addition to any offset ? What would such a buyer have for solar's value on a potential property purchase ? Some folks do not think like you. Maybe more folks than you think. Not everyone is a s pro solar as most of the readers and members of this forum. To the extent that such naysayers exist, they also lower size of the available pool of potential buyers and thus have a further potential negative impact on PV equipped property.

Lots to consider when you think like the other guy.

[desant89]

I'm all about the best deal, and I do it all the time no matter what I buy. I myself would never act like it is something I want as a buyer. However, on the seller side, I would be just as persuasive as to pointing out the saving on utility they would be getting. If you are covering 95+% of you electric bill, and can prove it, nobody can say it has no value. On the flip side for me, if there was one solar panel in the front of the house where it can be seen, I would not purchase the home. I am about to get solar now, of course I am purchasing. I fully expect that if I were to sell my home in 5 years (no plan to do so, but never know what happens in life), and my system is owned outright, covering 95% of my utility, that my home would have a higher value that a similar home without solar. But I guess a buyer would need to agree, and I would need to be persuasive.

[J.P.M.]

I guess I am not following here. If the homeowner gets the lien removed, and the new homeowner would own the system outright, why would that not add any value at all to the home? To me, at that point, it is no different than someone who purchased their system, and is selling their home.

1.) A property is only worth what someone is willing to pay.
2.) A property's value is somewhat dependent on the neighborhood. You may think your home is worth $30K more because of the spiffy array on the roof, but it (the house) will probably sell for about other houses in the neighborhood +/- some.
3.) Believe it or not, some people actually do not like solar. Talk to ~ 1/3 of my neighbors.
4.) The negotiation is not necessarily about what value a PV system may add to a property. Reality is, if you're the buyer, or buyer's agent, it's about getting the best price for a home. The buyer may think a feature (like PV) is great and is salivating over it. However, if the buyer possesses one eye and one balloon knot, (s)he will never reveal that, and if the seller, like most sellers with PV, thinks that PV adds value, one goal of the buyer in the negotiation is to disabuse the seller of such notions, be they correct, incorrect or somewhere in between. This is a process about getting the best price, keeping in mind that all value, like most everything, is relative and a matter of perception. Perceptions can be manipulated. It's just business..

Perhaps that's the part you're not following.

The actual value any feature adds (or detracts) to or from the value of a property is a matter of some opinion, depending on whether you are a buyer or a seller and opinions vary - for varying reasons.

Example: I'm about the biggest fan of solar I know of, but for a lot of what I believe are very valid, and I hope informed reasons, I'd never buy a residential property with a PV system attached. Therefore, an existing PV system on a home is a negative feature to me.

[desant89]

I guess I am not following here. If the homeowner gets the lien removed, and the new homeowner would own the system outright, why would that not add any value at all to the home? To me, at that point, it is no different than someone who purchased their system, and is selling their home. I get that it is a really small system though, and I know it would be better to get your own, but if it works, and it saves money, it has some value to it.

[J.P.M.]

If they had, they would never have agreed to lease PV. I wouldn't offer less for the house but I also wouldn't offer a dime more..

As a negotiating position, I'd offer less with a lot of reasons why, and then negotiate up to nothing more.

[azdave]

Purely for arguments sake, but ballpark before credits and rebates using middle of the road components, what would a 6 KW system with 28 panels cost?

My 26 panel string inverter system was $18K before incentives and $11K after. Installed by Harmon Solar on a tile roof in Gilbert over three years ago and they did all permits including HOA approval. It was turn-key. I just had to take off work on the install dates.

[J.P.M.]

This has been answered. 6 KW *$3 a watt = $18,000. The cost per watt is typical and can vary plus or minus $0.50 (could be as much as $1) dependent on local labor conditions and deals on equipment. As discussed an installer who leases systems may front load costs to drive the on paper cost up to maximize the federal credit so the installed cost will increase. An example is the installer specs a particular module that they buy from an another division of the company. The other division marks up the panel some amount. The installer buys the marked up panel and includes that marked up cost on the install. The leasing firm now gets a higher rebate from the government. The other division makes extra profit that then goes into the corporate profit. In theory the government is the only one who loses until someone who leased the system wants to get out of the lease. The leasing company has the project on the books at a high cost and that means the buyout is going to be higher than a system that was installed without the financial games.

Systems with microinverters may have higher equipment costs but could be quicker to install with cheap labor while string inverters could have lower equipment cost but take a bit more work to design and install. Special conditions like tile roofs, ground or pole mounts or undersized electrical panels will also raise the cost per watt.

More of the dark side of the joys of screwing the solar ignorant via leasing.

[Hansel07]

Thank you for the cost explanations, I really appreciate it.

[J.P.M.]

Purely for arguments sake, but ballpark before credits and rebates using middle of the road components, what would a 6 KW system with 28 panels cost?

Price varies w/ area. In SO. CA at this time, a decent turnkey system from a reputable installer, with no extra roof or electrical work can probably be had for something like $3.25 - $3.50/S.T.C. Watt. Other areas may be more or less. Of course, you can always pay more, but that's a very possible range around her, maybe even down into the $3.00/watt range depending on roof conditions (tile vs. comp. shingles, slope, how irregular the roof area is, etc.), and how sharp a negotiator the cust. is.

So, for a 6+ kW system: Before fed. tax credit: ~~ $19,500 - $21,000.

After fed. tax credit: ~~ $13,650 - $14,700.

If you're wondering about an offer price on the current system, I'd consider using the $3.00/Watt for a new system, and offer about a buck/Watt for a used system.

Also, keep in mind that things have changed a bit since the days of 210 - 230 Watt panels. a 6 kW system today will probably have something like 18 - 22 panels or so, but the S.T.C. size of the panels will not affect performance of the entire array which will be 6 kW nominal size +/- a bit due to there being no fractional panels.

[peakbagger]

This has been answered. 6 KW *$3 a watt = $18,000. The cost per watt is typical and can vary plus or minus $0.50 (could be as much as $1) dependent on local labor conditions and deals on equipment. As discussed an installer who leases systems may front load costs to drive the on paper cost up to maximize the federal credit so the installed cost will increase. An example is the installer specs a particular module that they buy from an another division of the company. The other division marks up the panel some amount. The installer buys the marked up panel and includes that marked up cost on the install. The leasing firm now gets a higher rebate from the government. The other division makes extra profit that then goes into the corporate profit. In theory the government is the only one who loses until someone who leased the system wants to get out of the lease. The leasing company has the project on the books at a high cost and that means the buyout is going to be higher than a system that was installed without the financial games.

Systems with microinverters may have higher equipment costs but could be quicker to install with cheap labor while string inverters could have lower equipment cost but take a bit more work to design and install. Special conditions like tile roofs, ground or pole mounts or undersized electrical panels will also raise the cost per watt.

[Hansel07]

Purely for arguments sake, but ballpark before credits and rebates using middle of the road components, what would a 6 KW system with 28 panels cost?

[azdave]

It's unfortunate the seller didn't do his homework beforehand,

If they had, they would never have agreed to lease PV.

I wouldn't offer less for the house but I also wouldn't offer a dime more.They made the bad decision to lease solar and then sell the home so they should pay the price for that decision.

In my opinion, PV only adds any real value to the selling price when it is free and clear and has a known production history to prove the value to a buyer.

[Mike90250]

as an example, Sungevity would require $25,000 to get out of the lease and own the system. I want ballpark range of what a brand new system would cost as if I was putting it on today. Say, $15,000. Thus, I will tell the seller I will increase the offer for the house by $15,000. I'm not going to pay for his stupidity

Have them clear the lien, and leave the panels in place, if they (roof) are not leaking The instant you get Larry with a Ladder up there, and the panels are gone, how do you reseal / restore the roof so it has a 20 year life ? Have the seller give you the panels free , clear and the system in working condition, Maybe lessen the pain with a $10K sweetener.

[J.P.M.]

Thank you for all the advice. It's unfortunate the seller didn't do his homework beforehand, but it is his own fault. I've tried advising him and his agent y as much as possible, but they just do seem to get it.

We have basically told him to figure it out and let us know, but we are not waiting around.

Trust me, they get it. They've figured it out. If you want the place, consider making a low ball offer and make it contingent on clear title, free of liens, and removal of the PV system.

There's always another house to turn into a home that doesn't have a PV albatross hanging around its neck.

[Hansel07]

Thank you for all the advice. It's unfortunate the seller didn't do his homework beforehand, but it is his own fault. I've tried advising him and his agent y as much as possible, but they just do seem to get it.

We have basically told him to figure it out and let us know, but we are not waiting around.