As more homeowners look for ways to reduce energy costs and increase sustainability, solar power has become an attractive option in the real estate market. The demand for solar panels has surged due to rising electricity rates, federal tax incentives, and growing consumer awareness of renewable energy benefits.
For real estate agents, understanding how solar impacts home value, financing, and resale potential is crucial in educating both buyers and sellers. Here’s what you need to know to guide your clients in making informed decisions about solar-powered homes.
Why Solar Is Gaining Popularity in Real Estate
Several factors are driving the increased adoption of solar energy in residential real estate:
Energy Cost Savings
Homeowners with solar panels can significantly reduce or eliminate their electricity bills, making solar an appealing long-term investment.
Government Incentives
The federal solar investment tax credit (Investment Tax Credit or ITC) allows homeowners to deduct a percentage of solar installation costs from their federal taxes. Many states and utility companies also offer rebates and incentives.
Sustainability and Environmental Impact
Buyers are increasingly prioritizing eco-friendly home features, and solar panels align with this trend by reducing a home’s carbon footprint.
Resale Value Boost
Studies show that solar-powered homes often sell for more than comparable non-solar homes, making them a desirable investment.
With these benefits in mind, real estate agents should be prepared to educate clients on how solar affects home buying and selling decisions.
Educating Sellers: How Solar Impacts Home Value & Marketability
Sellers with solar-equipped homes may assume their property will automatically command a higher price, but agents should help them understand the key factors influencing solar home valuation. According to recent reports, homes with solar panels sell for an average of 4.1% more than similar homes without solar.
However, the actual impact depends on:
System Ownership
Homes with owned solar panels typically see the greatest resale value increase. Buyers prefer fully owned systems because they don’t require a lease or loan assumption.
Panel Age & Efficiency: Newer, high-efficiency solar systems add more value than older, less productive panels.
Local Market Trends
In some regions, solar demand is stronger than in others. Markets with higher energy costs often see greater buyer interest in solar-powered homes.
Owned vs. Leased Solar Panels
One of the most important distinctions in selling a solar home is whether the panels are owned or leased. This can impact the home’s value, marketability, and the buyer’s financing options.
Owned Solar Systems
These add value to the home, as buyers won’t have to take on additional payments.
Leased Solar Systems
With a lease, the homeowner makes monthly payments to a third-party provider. Buyers may need to assume the lease, which can complicate the sale. Some buyers may be hesitant to take on a long-term contract.
Agents should ensure sellers have documentation on their solar system’s ownership status, cost savings, and performance to present to potential buyers.
Marketing Solar Homes Effectively
When listing a solar-powered home, emphasize its benefits in marketing materials. Failing to highlight these advantages could mean missing out on buyers specifically looking for energy-efficient homes.
A well-crafted marketing strategy ensures that the home’s solar features stand out, making it more appealing in a competitive market. Here are some ideas of benefits to market:
- Energy Savings: Show past utility bills to highlight reduced electricity costs.
- Financial Incentives: Mention available tax credits or rebates that could benefit the buyer.
- Environmental Impact: Appeal to eco-conscious buyers by promoting the home’s sustainability.
Properly showcasing a solar home’s value can attract more interest and lead to a smoother sale.
Educating Buyers: Key Considerations When Purchasing a Solar Home
For buyers considering a home with solar panels, agents should help them assess whether the system is a good investment. Solar panels can offer significant long-term savings, but the value depends on factors like system ownership, financing terms, and potential maintenance costs. Understanding these details upfront can help buyers make an informed decision and avoid unexpected expenses:
Reviewing System Age and Warranty
Buyers should ask:
- How old is the solar system? Most panels have a 25–30-year lifespan, with inverters lasting 10–15 years.
- Is the system under warranty? A strong warranty can provide peace of mind.
Understanding Solar Financing Options
If a solar system is financed, buyers need to understand the terms:
- Loan-financed panels: If the seller has an outstanding solar loan, will they pay it off before closing, or will the buyer need to assume it?
- Leased panels: If the system is leased, the buyer must qualify with the solar company and agree to the lease terms.
Agents should guide buyers in requesting these details from the seller before making an offer.
Evaluating Potential Savings
Encourage buyers to review the home’s energy savings history by requesting past electricity bills. Comparing utility costs with and without solar can help buyers understand the financial benefits.
Solar and Mortgage Financing: What Agents Should Know
Solar panels can affect a home’s appraisal and financing, so it’s important to work with lenders who understand solar home valuation. An experienced lender can help navigate potential challenges, such as lease agreements or how the system impacts debt-to-income ratios. Understanding these factors early can prevent delays in the loan approval process.
How Solar Affects Home Appraisals
If the solar system is owned, appraisers may add value based on estimated energy savings and comparable solar home sales. If the system is leased, appraisers typically do not include the solar panels in the home’s value.
Mortgage Considerations for Solar Homes
Lenders evaluate solar homes differently depending on the system’s ownership. For owned solar systems, standard mortgage financing applies, and the added home value may improve loan terms. For leased systems, some lenders require the lease to be paid off before closing, while others allow lease assumptions.
As demand for solar continues to grow, real estate agents who understand its impact on home value, financing, and buyer preferences will be well-positioned to serve their clients effectively. By educating both buyers and sellers on the benefits and considerations of solar energy, you can help them make informed decisions and navigate the complexities of solar-powered home transactions.
Partner with Keller Home Loans for Expert Solar Home Financing
At Keller Home Loans, we’re here to support real estate professionals and their clients with expert mortgage solutions tailored to today’s evolving housing market. Whether your clients are buying or selling a solar home, we can help them find the right financing options. Contact us today to learn more!
