Solar panels and resale: selling a house with solar

It is a natural question. You put thousands of dollars on the roof, and one day you may want to sell. Will a buyer pay you back for it? The candid answer is that it often helps and sometimes does not, and nobody can give you a trustworthy percentage for your street. What you can do is understand the forces at work and prepare the house so the system is an advantage and not a puzzle.

What drives the effect

A solar system is, in effect, a prepaid share of future electricity. A buyer who expects to pay high power bills may value that. A buyer in a low-rate area may see less benefit and may simply view the panels as an extra to maintain. Several things shape the response.

• Local electricity prices and how utilities credit exports
• How old the system is and how much warranty remains
• The look and condition of the installation
• Whether the system is owned outright or tied to a contract
• Buyer demographics, such as interest in lower running costs

Studies in some markets suggest owned solar can help a home sell or support a higher price, though the size of the effect varies and Canadian evidence is thinner than in places with more installations. Because of that, treat any resale boost as a bonus, not as the reason you buy. Our guide on whether solar is worth it puts resale in its proper place, after savings.

How appraisers and agents see it

Appraisers typically work from comparable sales. If few comparable homes in your area have solar, there is little data to point to, and the appraisal may not add a separate line for the system. Agents may still list it as a feature, since lower bills are a selling point. Some buyers will pay more, some will pay the same as for a similar house without panels, and a few will be wary.

Before you list, ask a local real estate professional how solar has been treated in recent sales nearby. Ask your lender or an appraiser if you are refinancing. The answers are local and change over time.

Owned versus leased

An owned system is the simplest case. It is part of the house, the buyer gets the equipment and the warranty remainder, and the sale proceeds as usual. A lease or a power purchase agreement is different. The buyer typically must agree to take over the contract, pass a credit check with the provider, or you must pay a buyout to end it. This can delay or even derail a sale. If you are considering one of those models, read our article on leases and power purchase agreements and ask what happens at resale before you sign anything.

Loans matter too. A loan that is in your name does not transfer to the buyer, so you would repay it from sale proceeds. Some financing may register a lien or a notice on title, which a lawyer should review.

Preparing the paperwork

Buyers and their lawyers like clarity. Put together a folder, paper or digital, that includes:

• The building and electrical permits, and the final inspection sign-off
• The utility’s approval to connect and your net metering or export agreement
• Warranty documents for panels, inverter and workmanship, with the transfer terms
• The installer’s contact details and the as-built system layout
• Twelve to twenty-four months of production and bill data
• Any maintenance records, and the roof’s age and installation details

Our warranty guide shows what to look for in the transfer clauses, because some coverage passes to a new owner automatically and some needs notice or a fee.

What buyers ask

Expect the same handful of questions.

1. How much did the system produce last year, and what did it save?
2. Who installed it, and are they still in business?
3. What warranties remain, and do they transfer?
4. How old is the inverter, and when might it need replacing?
5. Is there a contract, loan or lease attached?
6. Can the roof be repaired without removing the panels?

Having honest answers ready builds trust. If your yearly savings were, for example, around $1,500, say so, with the bills to back it up, and explain the export credit arrangement in plain terms. Avoid claims about how much the panels add to the price.

Timing and roof condition

A system installed on a roof near the end of its life is a worry for buyers, since the panels have to come off for any re-roofing. If you plan to sell in the next few years, think about the roof first. Likewise, a system that is a decade or more old with an inverter near the end of its expected 10 to 15 year life may prompt a buyer to ask for a price adjustment.

Should resale influence your decision?

A little, but not much. If you will stay for the whole payback period, resale is a side benefit. If you may sell within a few years, you rely more on the market’s response, and the payback calculation will tell you how much of your cost you recover through bills before you go. For more on money questions, see the costs and savings hub.