At least for the moment. We all know solar energy is good for America. But how you pay for converting sunshine to electricity is what this is all about!
Some buyers will avoid homes with solar leases. The seller exclaims, “The solar panels lower my electricity bills and my contract caps the rate I pay for juice.” This is true. However the question is, why did you get a lease instead of buying the system?
-You leased because you don’t have to maintain the system,
-You didn’t have to pay any down payment.
Why do some buyers avoid a solar lease?
First, the buyers don’t enjoy the fact that you avoided putting any money down. Like alarm systems, water softeners and any other leased element that the buyer is compelled to take over, the buyer is limited in their choices of service providers. Additionally, leases are often considered in qualifying for a new home loan which affect the seniority of the purchase loan and the debt ratio of the buyer.
According to Ken Harney at firstname.lastname@example.org, “Some would-be buyers balk when they learn that they’ll need to qualify on credit to take over your solar lease payments for the next 15 to 17 years. Others say they like the house but won’t sign a contract unless you buy out the remaining lease payment stream — $15,000 or $20,000 or more — because they’re worried that the solar equipment will become obsolete or won’t save as much on electricity bills as advertised,” as distributed by Washington Post Writers Group.
What happens at the end of the solar lease agreement? There are typically two options that are stated in leasing contracts: 1. You can buy the solar power system at “fair market value,” which unfortunately, no one can predict what that cost will be. 2. Have the solar panels removed from your roof.
If you are a owner thinking about selling within the next year, call a professional REALTOR® as part of your consultation group and get feedback before deciding whether to lease or own. Include your tax preparer and mother-in law in this group. Only if she has recently installed solar.
If you are a buyer, don’t shy away from homes leased with solar systems as they are lower maintenance and do save you money. Check the credentials of the solar company, have your agent provide you the contract information as soon as is practical and, review the lease terms with your lender. This is yet another good reason to never purchase a home without a professional REALTOR®!
Good resources include http://www.gosolarcalifornia.ca.gov/
Image courtesy of Stuart Miles at FreeDigitalPhotos.net