sell my house with solar panels

Selling a house with solar panels on the roof is easier than homeowners think. In most cases, solar adds value to your property. However, damaged solar panels can deter buyers from making you an offer. Additionally, homes with leased or financed solar can make the transaction more complicated. As electricity costs continue to rise, more homeowners are interested in adding solar to their properties and living a more eco-friendly lifestyle. Your efforts to save the environment and lower your utility bills can be rewarded when selling a home with solar on the roof.

Use this guide to help sell your house with solar panels to the right homebuyer.


It’s Easier to Sell a House with Solar Panels

sell house with solar panels

According to Rocket Homes, 67% of households want solar panels on their properties. The world is continuing to get more crowded. As a species, we are using more energy and at quicker rates. To counter the population increase, more households implement eco-friendly and energy-saving features into their homes.

Homes with solar panels attract more homebuyers since more people prefer to have them. As someone selling a house with solar panels, you’ve taken care of the hard part for the buyer. They don’t have to worry about contacting a solar company and installing panels on their roof. Buyers can purchase your home with solar included. It’s a win-win for homeowners who that environmentally conscious.

Especially in sunny states, like California, solar is in high demand. There are plenty of sun rays to capture as energy and therefore spend less on electric bills. California homebuyers will pay more for houses with solar. This eco-friendly home feature is viewed as an investment. Homeowners can cut their monthly electric bills drastically after living in a solar-powered house.


Selling a House with Owned Solar Panels

If you’re wondering how to sell your house with solar panels, first check to see if you own them outright. There are different types of solar ownership that can alter the home-selling process. Homeowners with solar panels on their roofs likely fall into one of these categories:

  • Own solar panels without a loan. No debt tied to them.
  • Own solar panels financed with a loan. There is still money owed on the panels.
  • Leased solar panels. There is an active lease agreement that you pay monthly.

Solar Panels Owned Free and Clear (without a loan)

Owning your panels without a loan is the easiest way to sell a house with solar. There is no debt tied to the solar panels because you either paid for them entirely upfront or paid off the loan tied to them. Homeowners that fall into this bucket are in a good spot. Selling a home with solar is very simple when the panels are owned free and clear.

BONUS GOOD NEWS: In this instance, your solar panels will add value to your property when you sell. Since no third party – bank or lender – has an interest in the panels through a loan they let you borrow, they can be considered part of your property’s value. When getting your home appraised, the appraiser will factor the solar panels into your home’s value. Now you can sell your house with solar panels for a strong value.

Financed Solar Panels with a Secured Loan

How did you finance your solar panels when you bought them? Ask yourself that question to determine if you can sell your home with solar before paying them off. Using a loan to add solar to your property is not a bad idea. It helps the environment and cuts your electricity bill. However, depending on the type of loan you used, it can add complications to the selling process.

When financing solar panels through a secured loan, the homeowner must pay off the rest of the loan balance before selling the property. For example, when homeowners leverage their current home through a Home Equity Loan, the primary property is used as collateral for the loan. The bank acknowledges the collateral and allows the homeowner to borrow a loan to purchase solar panels. Once a homeowner clears the loan, they can sell the home with solar panels.

Sometimes, buyers are willing to take over the loan of a borrower. Note, this can negatively affect the buyer’s ability to get approved for the initial loan to buy your house. For first-time homebuyers using an FHA loan to purchase a house, assuming a second loan may not be possible. FHA loans have strict requirements compared to conventional loans. If buyers rock the boat and try to assume a solar panel loan, they could negatively impact their debt-to-income ratio calculated by their lender.

Financed Solar Panels with an Unsecured Loan

Unsecured loans use the actual solar panels as collateral instead of the property. Because of this, unsecured loans typically have higher interest rates. Yes, high interest rates stink. However, it’s a small price to pay to make your home more environmentally friendly.

When financing your solar panels with this type of loan, the panels aren’t tied to the property. Homeowners can sell a house with solar panels before paying off the balance on an unsecured loan. However, note that the initial borrower is still responsible for paying off the loan. Consult with your lender regarding the specific details of your solar loan.


Selling a House with Leased Solar Panels

new construction homes

It’s possible to sell a house with leased solar panels on the roof. Sadly, it’s not as ‘clean cut’ as selling a home with solar that is paid off. Alas, you will prevail.

Leasing doesn’t stop homeowners from adding solar to their properties. Many Airbnb owners and vacation rental owners will add solar to their ADUs to help offset other landlord expenses. While there are countless vacation rental laws to navigate for landlords, being eco-friendly is not one of them. Airbnb hosts can attract more guests by offering a sustainable vacation rental to stay.

Option 1

Homeowners can pay off the remaining balance of their solar panel lease agreement and proceed with their home sale. This is the cleanest way to sell your home with solar panels that are leased. However, it will cost you money upfront to pay off the panels.

The solar becomes considered part of the property you are selling once the lease is paid off. Once your lease is nonexistent, your home’s resale value will increase. At this stage in the game, homeowners can demand a higher price point for their property. Have confidence when selling a house with solar panels that are paid off.

Option 2

For homeowners that don’t want to shell out the cash to buy out their solar panel lease, there’s another option. It’s possible – depending on the terms in the agreement – to transfer a solar lease to the person buying your house. You will be removed from the lease and they will be added to it (or the solar company will create a new lease altogether). It’s common to see new homeowners willing to take over an existing solar lease.


Sell Your House with Solar Panels: The Benefits

selling a house with solar panels

Solar Increases Your Home’s Resale Value

You can sell your house with solar panels for a higher price than without them. When they are owned outright or considered part of the property, solar panels increase a home’s resale value by several thousand dollars. Although investing in solar panels upfront hurts your wallet, view it as money coming back to you when it’s time to sell the property.

Quicker Home Sale

Home sellers will receive higher quality and more offers when their property comes with solar panels. Certain California beach towns that receive constant sunlight throughout the year expect solar to come with homes. People in these communities prioritize helping the environment and saving on utility bills.

Helping the Environment

Selling your home with solar helps the next homeowner continue the efforts to save the environment. Many new construction home communities offer properties that come with solar panels as a standard. New construction builds work with local cities to offer eco-friendly homes. Along with solar panels, the homes can come with additional environmentally friendly features. Homebuyers are continuing to express interest in eco-friendly items like solar panels.