Recently, there has been a lot of talk about clean energy and climate change and in the same context, I often hear about the benefits of houses with solar panels.

But before you put solar panels on your roof as a direct seller or take on a listing contract with a seller that already has a solar house as a realtor you might ask yourself: is it easy to sell a house with solar panels?

If you are a direct seller or a real estate professional, it is likely easy to sell a house with solar panels provided it is located in states such as Arizona, Nevada, or Nebraska, where the benefits of saving electric costs have an actual effect.

In other states, it might even be more challenging sometimes, because of an unfavorable year-round climate, meaning fewer sun hours or utility companies using rates that don’t mirror the actual cost for electricity production.

If you would like to know how I came to the above conclusion, please keep reading.

What Buyers Consider When Buying a House with Solar Panels

In general, it is easy to sell anything if the benefits meet the needs of a potential buyer.

So one thing to consider in the case of solar houses is what the actual home buyers have in mind or expect when thinking of buying a house with solar panels.

 

Taking a Thorough Look at the General Benefits of a House with Solar Panels

1) They reduce the costs for electricity in some areas

Some biased websites like to generalize a bit and mention that you will always save the costs for electricity when having a house with solar panels.

While at first glance you would think that, this is something that can’t be completely generalized.

Why?

Because utility companies charge consumers a flat rate for electricity many times no matter the time of consumption.

The benefit of reduced electricity costs comes only into play when the respective house is located in an area where utility companies introduced pricing schemes that charge different rates throughout the day allowing to mirror the actual cost for electricity production.

So, having a house with solar panels is only beneficial in those areas.

In which areas do utility companies have this type of charging in place?

While I couldn’t find utility companies disclosing this information by state, I could find an overview of electricity cost savings for solar panels by state on this source.

My thinking process on this is that the states with these savings will likely have utility companies that mirror the actual cost for electricity production.

But I did some further work with the table from this source. I wanted to get the average savings per state and created an additional table based on that.

The next thing I did was to pull the data for average energy costs per year per state and multiplied it by 25 since the found table also uses a 25-year range for energy savings.

Why did I do all that additional number crunching?

Well, while you can get good numbers from the table I found and see at first glance that for example, in California you will have the most energy cost savings with solar, it can be misleading information.

California is well-known for higher costs of living (not to mention the tax rates), and this may also be true for overall energy costs.

So, what we need is a ratio between the average savings over 25 years but also the average energy costs over the same period of time.

Only then we can determine which state provides the most benefits in terms of energy cost savings for solar panels.

Based on this source, I determined the average electric costs per year and the same also over the 25-year period, and came up with the following energy cost savings to average electric cost ratio (see table below)

StateEstimated 25-year bill savings (average)Average Electric Costs per MonthAverage Electric Costs per Year25-year Average Electric CostsEnergy Cost Savings to Average Electric Cost Ratio
Arizona$43,737.33$104.95$1,259.40$31,485.00138.91%
Nevada$42,316.00$103.42$1,241.04$31,026.00136.39%
Nebraska$32,774.00$84.41$1,012.92$25,323.00129.42%
Missouri$32,100.00$84.14$1,009.68$25,242.00127.17%
Minnesota$42,591.00$111.95$1,343.40$33,585.00126.82%
Texas$37,016.29$102.17$1,226.04$30,651.00120.77%
New Mexico$41,686.00$112.39$1,348.68$33,717.00123.63%
California$43,427.63$192.23$2,306.76$57,669.0075.30%
Oklahoma$29,962.50$80.01$960.12$24,003.00124.83%
Georgia$33,995.00$98.13$1,177.56$29,439.00115.48%
North Carolina$50,131.50$95.08$1,140.96$28,524.00175.75%
Pennsylvania$39,047.00$117.42$1,409.04$35,226.00110.85%
Virginia$32,292.00$99.12$1,189.44$29,736.00108.60%
New York$52,691.00$163.88$1.966.56$49,164.00107.17%
Kansas$33,640.00$106.47$1,277.64$31,941.00105.32%
Tennessee$47,188.50$92.93$1,115.16$27,879.00169.26%
Louisiana$26,535.00$85.93$1,031.16$25,779.00102.93%
Ohio$31,993.00$106.12$1,273.44$31,836.00100.49%
Illinois$33,045.00$110.33$1,323.96$33,099.0099.84%
Maryland$33,390.00$113.11$1,357,.2$33,933.0098.40%
Michigan$43,510.00$151.77$1,821.24$45,531.0095.56%
Massachusetts$56,753.00$200.21$2,402.52$60,063.0094.49%
Florida$31,364.00$104.50$1,254.00$31,350.00100.04%
Wisconsin$33,566.00$126.03$1,512,.6$37,809.0088.78%
Colorado$25,105,.0$108.90$1,306.80$32,670.0076.85%
Washington$22,715.00$87.55$1,050.60$26,265.0086.48%
Kentucky$24,235.00$93.83$1,125.96$28,149.0086.10%
Oregon$24,376.00$98.76$1,185.12$29,628.0082.27%
Indiana$23,192.00$109.88$1,318.56$32,964.0070.36%

As you can see from the table, California is not in the top 5 anymore, since it is the state with one of the highest electric costs which cancel out the savings.

The top three states when it comes to energy savings in terms of solar panels compared to overall energy costs are now Arizona, Nevada, and Nebraska.

So, potential solar house buyers will benefit most in these three states when it comes to this benefit.

 

2) Solar Investment Tax Credits

This one is basically irrelevant for potential solar house buyers, since it only concerns house owners that first install their solar equipment.

When you buy and install the solar panel equipment, you will get 26 percent of the investment back via so-called solar investment tax credits when you file your taxes.

For example, if you buy a system worth $25,000 you will get back $6,500.

But again, this specific benefit is more interesting either for potential buyers that don’t want to buy a house that already has solar panels or sellers considering the installation of solar panels.

By the way, if you are interested in how to get started with solar, I can also recommend you this article of a friend of mine

 

3) Renewable Energy Credits (RECs)

This benefit is much more relevant again for potential solar house buyers, because RECs are generated throughout the year, are sellable to utility companies and thus can generate an additional return on investment.

They are a representation of the electric energy that is generated by renewable energy sources (e.g. solar or wind power).

So, they are not electricity per se but rather energy attributes of renewable electricity.

The problem with electricity is that you can’t know from which source it comes.

To solve this issue, RECs can be purchased with your electricity certifying the “renewable” feature of renewable energy to the owner.

These certificates can also be bought by companies that can’t install solar panels but would like to reduce their carbon footprint.

 

4) Environmental Friendly (at First Glance)

Another benefit that potential buyers see in houses with solar panels is being able to do something good for the environment.

Common arguments mentioned in this context are that by having a house with solar panels for a year, you avoid adding more than 12,500 pounds of carbon dioxide to the atmosphere, you won’t burn 8,000 pounds of coal, and not drive 18,000 miles (source).

Unfortunately, due to natural human bias, these benefits or arguments quite often ignore a bit the production part of new solar panels and the recycling part of old ones.

Even National Geographic mentions in this article the following:

“Fabricating the panels requires caustic chemicals such as sodium hydroxide and hydrofluoric acid, and the process uses water as well as electricity, the production of which emits greenhouse gases. It also creates waste.”

When it comes to recycling solar panels, a forum for the discussion of human-caused global warming called Climate Change Dispatch states the following:

“Contrary to previous assumptions, pollutants such as lead or carcinogenic cadmium can be almost completely washed out of the fragments of solar modules over a period of several months, for example by rainwater.”

So, without turning a bit of a blind eye to the production and recycling part you can’t necessarily call solar panels “clean energy”.

But nevertheless, due to good PR and marketing, most still associate them with green and clean energy, which can also be used for marketing solar houses.

As a real estate professional, you are not in the business of changing the mind of potential buyers in terms of politics (this is almost impossible in any area of life, by the way), but to show them the benefits they believe in.

If you tried to convince a republican that democrats are better and vice versa at the Thanksgiving, Christmas, or [insert family reunion] table, you know what I mean.

So, if you deal with a potential buyer interested in solar homes, because they see the main benefit in the environmentally-friendly aspect, then you can make the best out of it.

Do Solar Panels Increase the Resale Value of a House? Some Interesting Statistics

Depending on the state where you try to sell a house with solar panels, it can not only be easier to sell but may also give you a better resale value.

According to an article from CNBC citing findings from Zillow, you can expect to sell for 4.1% more on average.

Ordered by state in the table below, the value increases go as follows:

StateValue Increase
New Jersey9.9%
Pennsylvania4.9%
North Carolina4.8%
Louisiana4.9%
Washington4.1%
Florida4%
Hawaii4%
Maryland3.8%
New York3.6%
South Carolina3.6%

Selling a House with Financed or Leased Solar Panels

It might not go as easy to sell a house with solar panels if they are financed or leased.

In this case, it all depends on what kind of financing or leasing you are using.

If you used the property as collateral for the loan, you will have to clear the balance of the loan before you sell.

There might still be a work-around for this situation if you do some sort of creative real estate deal with potential buyers, such as, for example, a rent-to-own deal.

Things are easier again if you financed the solar panels with an unsecured loan, meaning a loan where your property is not collateral. In this case, you can sell prior to clearing the balance of the loan.

A similar scenario would be a leased solar panel system. Overall, this is easier to solve than financed ones.

You either pay off the remainder of the lease or provided your leasing contract allows it, you transfer the lease agreement to the new owners.

Possible Problems When Selling a House with Solar Panels

Approaching the end of this article, I would also like to mention that there may be further problems and challenges when it comes to selling a house with solar panels.

Taking into consideration potential problems is important when answering the main question of this article of whether it is easy to sell a house with solar panels.

 

1) Neglected Solar Panel Maintenance

If the owner sells out of a troubled financial situation and the solar panels have required maintenance work for several months already, it can get tough to sell such a house.

So, carrying out maintenance work before selling the house will be key.

Sure, you still can sell as is, but get ready for wholesalers (and low-ball offers.

 

2) The Lease of a Solar Panel System

As priory mentioned, as a seller, you may need to buy out the lease of the solar panel system first so you can transfer the panels without a problem.

This is important to do, because for some potential buyers, having a lease (even if transferrable) might be a deal-breaker.

If the lease is transferable and the buyer is okay with that, it is not a big issue anymore.

But there may still be a little hurdle.

Why? Because the potential buyer will need to qualify for the takeover of the loan with the third-party solar installer.

So, the credit score should be good enough for that.

 

3) Potential Buyers Being Afraid of Solar Panels

This one is already giving a clue with regards to the right marketing you will have to do when it comes to houses with solar panels.

Why is that?

Because as a real estate professional, you may attract potential buyers who are not explicitly looking for solar houses.

These types of buyers haven’t dealt with solar panels yet and will worry about the warranty, maintenance, repairs and more.

A knowledgeable agent may take these worries away by being able to answer all related questions, but the better approach would be to market a solar house to the right potential buyers in the first place.

 

4) Sellers Making a Sale Impossible

From the perspective of a real estate agent, it is always important to qualify both buyers and sellers.

And in the case of houses with solar panels, it may be even more important to qualify the seller.

What is the reason for this? It is regret.

Some sellers regret having installed solar panels and may torpedo an otherwise nicely and smoothly going showing with a potential buyer by talking about their negative experiences.

For others, it may not even be regret but neglect.

This means they don’t keep the installation information about their solar system together with the information about their property.

Overall it’s important to be knowledgable about solar panels in the first place to avoi the above mentioned problems.

An additional ressource to mention in this context is this one from saveonenergy

Marketing Houses with Solar Panels – Takeaways

From my prior analysis above, you could learn that the top three states when it comes to energy savings in terms of solar panels compared to overall energy costs are Arizona, Nevada, and Nebraska.

So, in these states, it will likely be easier to sell houses with solar panels to the right target buyer group because the cost saving benefits will be more convincing.

Using the right targeting in (real estate) marketing is also true for this type of property, because you will be able to attract potential buyers that are really interested in houses with solar panels and appreciate the different benefits they bring, ignoring some of the common biases in terms of clean energy.

But as a real estate agent, you also want to make sure that you qualify the seller and make sure their solar system is well maintained and enough information is available about it.

A marketing method you could use to attract buyers could be first to list the property on listing portals that provide a dedicated section for solar houses, such as on greenhomesforsale.com or adding an additional solar energy attribute to a Zillow listing.

Unfortunately, I couldn’t find a specific search filter for houses with solar panels on the latter yet. If you happen to find one on Zillow, please let me know.

The other method would be to use Facebook ads for housing and target people that have, for example, an interest in solar energy, solar power, and real estate.