Interestingly, by the year 2020, more than a million US homes operated with installed solar systems. Why has the solar power system grown in popularity so much?
Well, one reason is that the cost of installing a solar system has steadily decreased over the years. This has increased the value of solar power among many. Moreover, it’s a fact that solar energy has conveniently allowed thousands of homeowners to reap the incredible benefits of constant renewable energy.
Notably, one of the most popular options for most landowners has been the leasing of solar panels in recent days. The question is: Is it difficult to access a mortgage loan when you lease solar power? Since this question begs for a straight answer, it’s time to get it!
Is the Home Value Really Increased with a Solar Panel System?
Without a doubt, solar energy comes with specific unique benefits. Some of these are financial nature. In fact, many homeowners have been able to save money with this plan. Furthermore, with a solar system, you can enjoy reliable power and remarkable energy efficiency.
Of course, the availability of a solar system will considerably enhance the home value. Why? When you buy a home with a solar system in place, you’ll enjoy the advantage of solar energy without the trouble that comes with installing them.
Experts actually estimate that purchasing a home with a solar system and solar panels in place can increase the home value by a whopping $15,000- $20,000! Why, with ready solar panels, you’ll immediately save money that would have gone to paying your monthly power bills!
Add Value to Your Home by Buying Out the Solar Lease
Overall, some solar lease contracts will include an option for an early buy-out. In turn, this will allow you to buy out the rest of the lease. Ultimately, you can gain complete ownership of the solar panels. As soon as you achieve this (ownership of the panels), you’ll have succeeded in removing the solar lease from the entire home sale deal. And the home’s market value will shoot up. Yes, this is a win-win situation!
Despite this, you might wonder whether it’s wise to buy out the solar panels. Is it convenient? To decide whether this is workable in your case, simply compare the purchase offer to the estimated value the panels will add to your home’s market value. If, for example, the offer is $6,000 and the panels will add $8,000 to the listing price, it might be sensible to buy the panels for a straightforward selling process.
Make sure to check with your real estate agent. Ask him to assess the value that the owned panels might actually add to your home. Remember this: You can end up losing money if the penalty fee is more than the expected returns for the home sale investment. Moreover, will you get the benefit of a reduced time to close the deal on a home sale? Note that it could take 2 weeks for the solar company to approve a lease transfer in some cases.
Also, consider that you might be purchasing older, inefficient solar panels whose value is lower than new ones. This will definitely reduce their value to those who will ask to buy them. Hence, think about such factors well in advance.
Finally, in most cases, buying the solar panel is likely to involve high costs. Think about the overall impact of this on a future home sale.
Will Solar Panels Stop You From Obtaining a Mortgage?
Most of the time, homes fitted with solar panels should not hinder access to mortgages or other financings. Regardless, there are some crucial details to think about before deciding to buy a home with a leased solar. Think of this: Homebuyers must usually accept to take over the lease. This is the case unless the seller accepts to pay off the lease when making the sale.
If you have leased solar panels on a home you’re buying, you must know the necessary steps for transferring the lease. In light of this, make sure to ask for the lease contract copy, read it, and review it before making a purchase offer. Remember that as a homeowner, you must meet some qualifications set by the lease company. This is the only way you can assume the lease. Overall, this should be easy to do.
Moreover, the buyer must always inform the mortgage lender about the existing solar lease. Note that sometimes the leased solar panels can affect the lender’s capacity to lend on the property. However, this is generally rare.
Despite this, it’s still a great decision to acquire a home with leased solar panels. Every homeowner should assess what’s practical before making the big dive.
Questions to Consider When Buying a House with Leased Solar
- When preparing to buy a house with leased solar, always ask whether the panels are leased or purchased. Also, ask the following pertinent questions:
- Who manufactured the solar panels (the company)? Once you establish this, you’ll learn about any available warranties and how long the various parts will be covered.
- Who installed the solar system? You should determine the installing company since many of them offer a distinct workmanship warranty. Some can even cover up to 10 years.
- What size is the solar energy system? You can then determine how much electricity you could save using this system and how much you might save on energy bills.
- How much were the past energy bills? It’s wise for a potential homebuyer to inquire from the previous owner about past electricity bills. Yes, you’ll then understand the real value of the solar system.
How to Safely Get Out of an Existing Solar Lease
Nowadays, it’s easier for many homeowners to access loans or grants for a solar panel system. Regrettably, this wasn’t the case in the past. As a result, many users of solar panels are still stuck with existing solar leases.
So, what can you do to get out of an unwanted solar lease? Well, unless you take legal action, it can be challenging to do so. Regardless, a few options still exist.
Let’s check out these:
Cancel the Lease on Uninstalled Panels
If the system is not yet installed, it’s easier to get out of the lease. Most companies offer windows that allow for a cancellation prior to installation. If you act fast, you won’t have to worry about any possible penalties. The typical window is usually about 30 days after the contract was signed. Some companies will even tell you the terms for ending the contract early. Hence, thoroughly examine the contract before you sign- then you can cancel early if necessary.
Cancel the Lease after Installation
Supposing you’re selling a home, it should be easy to transfer the lease to the new owner. But if he isn’t interested, you can try buying out the remaining value. Check whether this option is listed within the lease.
Find out- A few leasing companies might let you out of the contract by purchasing the equipment at a reasonable market value. Is this acceptable to you? Note that the longer you are in the lease, the more the price goes down.
Before sealing a solar lease deal, do your homework well. Shop around as much as you can. You’ll discover that all you need to do is settle on the right company that makes a good business partner and- voila! You have a fantastic deal in your hands.
As long as you have a reputable installer, excellent quality solar panels, and reasonable financing, you’re good to go. Once you tie up these elements, you’ll be pleased with the service. In this situation, you won’t desire to get out of the contract prematurely.
Yes, once you carry out adequate research, you can expect to enjoy the many benefits that come with a leased solar panel system.