The 5 Obstacles To Selling A Solar Home (And How To Overcome Them)

Solar leases cause the most difficulty when owners of solar homes go to sell, according to a Colorado real-estate agent who trains other professionals on solar home sales—but that's only one of five problems that commonly arise when solar homes go on the market.
All five stem from a lack of information, said Janelle McGill, a Fort Collins agent and consultant, during a webinar hosted by the Clean Energy States Alliance. So none need impede a transaction.
"No two transactions are alike, so if one has solar, that’s fine. As long as everybody knows what they’re doing, it’s easy to get taken care of, and it doesn’t have to be that complicated.”
But homeowners can feel it's too complicated, and that uncertainty may impede solar home sales and even slow the growth of solar installations, McGill said, largely because of these five issues:
1 Buyer Hesitation
“It may be surprising to those of us who champion solar, but not everybody wants it," McGill said. "Most of this hesitation is really just because it’s unknown to them. They don’t know the benefits. They worry about upkeep and maintenance and repairs. They worry about how long the warranty is and what it covers. And what they have to do when the panels end their life and have to be removed." They worry about the impact on the roof.
"These are all legitimate worries, and for a lot of us who champion solar not a problem to answer, but for a lot of people these are the things that keep them away."
Especially if the agents involved in the transactions can't answer buyers' concerns:
2 Agent Hesitation
Some agents steer buyers away from solar homes because the agents themselves don't understand them.
"There are a lot of agents who scare buyers off with their own opinions." McGill said. "This is irresponsible, and it’s against agent ethics, by the way, but it happens. And, again, it’s all due to a lack of understanding and education."
More on buyer and agent education below. Meanwhile, sometimes the seller has issues:
3 Seller Issues
Most homeowners who install solar panels are thrilled with them, McGill said, and are adept at sharing that positive experience with potential buyers. But some regret installing panels, and those sellers can scare off buyers if they share that negative view.
Other sellers fail to keep information on their solar installation that's needed at the time of the sale. McGill urges homeowners to keep the solar installation information in the same place as the information on the home, at least until a database can be created for all of it to be stored.
4 Valuation Issues
The multiple listing service (MLS) in most markets now includes "green fields" for agents to fill out in a home's market profile. The green fields list a home's environmentally-friendly features, such as solar PV, passive solar, energy efficiency or LEED certification. Some appraisers know how these features add value to a home, but others may not.
"If you can’t find a qualified appraiser and the MLS green fields have not been filled out, then finding data to support the list price and any addition for solar can be really difficult."
Sellers can help insure they get full value for their solar investment by filling out the Green and Energy Efficient Addendum. And anyone can assess the added value of a solar installation at pvvalue.com.
5 Solar Leases
Solar leases immediately generate utility savings for homeowners, but the panels remain the property of the solar installer. Some homeowners are surprised to discover the lease adds no real value to the home, McGill said, and some buyers may be unwilling to continue the lease.
The monthly expense from the lease may even disqualify some buyers by raising their debt-to-income ratio.
And unless the lease is transferred to the buyer in a timely fashion, it can delay or cancel a closing.
"There are certainly many reasons why you would do a solar lease," McGill said, "but an easier real estate transaction is not one of those reasons."
Solutions
To overcome these five obstacles, McGill urges education, for homeowners, for real estate professionals, for solar installers and for utilities.
She offers free classes in the Fort Collins area, and the non-profit group Elevate Energy offers low-cost online classes for people in other areas.
"Solar, while absolutely fantastic, can add some complications to the selling process which is already a somewhat fraught process," said Pamela Brookstein, Elevate's market transformation specialist.
The market will transform when homeowners see home sellers getting fair and consistent value for their solar investments, Brookstein said.
"That’s how we get to market transformation. When homeowners see that others are getting benefits from solar, both in the short term and in the long term, they’ll be more willing to consider and ultimately invest in solar.”
To facilitate all the education that's needed, McGill wants to equip solar installers, utility companies, and regional databases with information about solar home sales. She would require or at least strongly encourage all agents to learn about solar home sales.
A significant number of homes hitting the market each year now have solar or green building features, McGill said, and a home may change hands two or three times during the lifetime of a solar array.
"The market transformation comes from trust," McGill said. "As soon as they know that all of this is being taken care of somewhere, then the market’s going to transform. And installations and adoptions are going to keep skyrocketing, but right now this still does feel like an unknown.”