Solar panels and resale value

Does solar raise the sale price?

Studies from various markets have found small to moderate premiums for owned systems, though results depend on the region, the electricity price and how the research was set up. Canadian evidence is thinner than in some other countries, and regional markets differ a lot. That is a reason for caution when a sales presentation promises that the system will pay for itself on resale.

A more modest and defensible view: panels that lower the monthly bill make the house cheaper to run, and some buyers will value that. Others see a roof they must maintain. A real estate professional who knows the neighbourhood can say how recent sales behaved, and appraisers may treat solar differently from one case to the next.

What affects how buyers see it?

Several things push opinion one way or the other.

• Ownership. An owned system transfers cleanly with the sale. A lease or power purchase agreement adds a contract that the buyer must accept.
• Age and condition. A five-year-old system with a long warranty is easier to value than a twelve-year-old one with questions about the inverter.
• Production history. Monitoring records that show the output year after year make the benefit concrete.
• Roof life. Panels on a roof that needs replacing soon can be a negative, because the array must come off and go back on.

The financing guide explains why a lease can complicate a sale.

How do you present a solar system to a buyer?

Assemble a short file and keep it with the house documents. It should hold the permit and inspection records, the interconnection approval, the equipment list, the warranty papers, and twelve months or more of production data. A buyer's inspector can then see what was installed and under what conditions. The monitoring guide describes which numbers are worth saving, and the warranty guide explains what the papers mean.

Check whether the warranty transfers to a new owner, and whether the monitoring account can be reassigned. Both are small administrative jobs that are easy to forget until the closing date is close.

What about efficiency labels and heating systems?

Solar electricity is only one part of how a house performs. A tight envelope and an efficient heating system affect running costs just as much, and rating schemes such as EnerGuide give buyers a comparable number. Drake Landing's R-2000 homes were sold as part of a community with a shared solar heating system, and the homes page describes what those buyers got. Their story also shows that a feature tied to a shared system depends on that system continuing to operate, which is a reminder to look at who maintains what.

Should resale be the reason to install?

Probably not by itself. If the system saves money for the years you live in the house, any resale premium is a bonus. If the numbers only work through a hoped-for premium, test the purchase with the worth-it guide before going ahead.

How do appraisers and agents treat solar?

Practice varies, and it is changing. Some appraisers have a method for valuing owned solar, usually based on the income stream or on comparable sales. Others do not, which means the system is treated as little more than an extra feature. Real estate listings that clearly state the capacity, the age, the ownership and the typical yearly production give readers something to work with. Vague claims such as "solar-ready" or "energy efficient" do not.

Where a lender is involved, ask early whether it will count the system, and whether it needs a payoff statement if a loan or lease is attached. A few minutes of preparation can prevent a delay in the closing.

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