By: Andrea K., Chief Editor at Understand Solar
If you’re working with clients that are looking at a solar home, it can be hard to determine the exact value of the installation or even know what to look for. Here are a few helpful tips to make assessing a home with solar just a little bit easier.
Assess the Previous Homeowners’ Savings
The biggest thing you need to know is whether or not the solar installation will even save your client money. Thankfully, you’ve got an easy way to do this, as long as the current homeowner is willing to work with you!
Just compare the current homeowner’s electricity bills before going solar to their total electricity bills after going solar (which includes their utility bill as well as lease or loan payments if applicable). If their post-solar bills are lower, you’re probably good to go!
Understand the Financing
If the current homeowner entered into a lease or loan to finance the installation, be sure to read over the agreement carefully. Contract length, interest rate, and purchasing options at the end of the lease are all important aspects to understand before entering a solar agreement.
Many leases also include escalators, meaning the monthly lease payments increase each year. Be sure to ask if this is the case as well as it affects the bottom line.
Estimate the Added Value to the Property
According to a 2015 study by the Lawrence Berkley National Lab of 22,000 homes sales across 8 states from 1999 to 2013, homebuyers are willing to pay a premium for homes with solar installations owned by the homeowner. The actual value depends on the age of the installation but averaged out to about $4 per watt. In theory, then, an average sized 5kW installation then could add around $20k in value to a home.
Keep in mind, the study looked primarily at home values during the 2000s, when solar installations were much more costly to install. It can be hard, but try to compare a few local homes both with and without solar to see what other homebuyers are spending on solar.