There are lovers and haters when it comes to solar panels. And as someone who has lived off-grid since 2015, I’ve met both.
For the record, the majority of people I meet are fairly excited about the potential to generate their own power and have a list of questions to ask.
But the one question that always makes me cringe is, ‘Will solar panels add value to my home?’
The simple answer to this is NO.
As far as the mortgage company or a house appraiser is concerned, solar panels generally add little to no monetary value to the property.
Don’t ask me why, as it makes no sense to me at all!
What’s even more frustrating is that there seems to be a plethora of articles out there claiming just the opposite.
Admittedly, each situation is different. But I can tell you from our own personal experience of building a new home, the bank was not interested in financing our home power system any more than they were financing a barn on our property for personal use (a business endeavor could be different).
It didn’t matter to our appraiser that our home has no electric bill, while other comparable homes in the area do. It didn’t matter that our home is resilient to any issue that might beset the power grid while other comparable homes would be sitting in the dark.
Our home could quite literally be an emergency hospital in the case of a prolonged blackout, and as far as the bank is concerned, solar panels do not add value to our property.
Solar Panels And Perspective Home Buyers
Fortunately, perspective buyers aren’t always in agreement with the bank. For some reason, the idea of having extremely low utility costs seems to appeal to anyone acquainted with the power companies’ monthly correspondence – aka bills.
But homes like these aren’t usually the result of direct influence via the mortgage company.
What generally seems to happen is that a home-owner, at some point in the past, decided to take the solar plunge and purchased solar panels on their own, outside of a mortgage. Then, at a later date, they put their house up for sale.
This is where the value of adding solar panels to your home can be seen.
In this situation, the seller may see higher bids for their home as people generally hate utility bills and they know that your solar panels are going to help reduce that financial burden.
But it’s important to remember that the mortgage companies are still only going to lend according to the appraised value of the overall property and not to any financial investments directly related to solar panels for your house (solar panels associated with a solar farm may be an exception).
So do not assume that adding $15,000 worth of solar panels to your roof is going to increase the value of your home by that same $15,000.
This is not how it typically works with the mortgage company.
From the mortgage company’s perspective, adding solar panels to your home is much like other cosmetic home improvements. While doing so may play a part in helping achieve a sale, it doesn’t always directly correspond with the sale price.
Some People Don’t Like Solar Panels
And then there’s the haters.
Some people, do not and will not ever embrace solar panels. They have their reasons, (which I have found they like to share whether I ask them to or not).
For the record, people have the right to like or dislike anything they choose to. This includes solar panels.
If you are in a situation where you are considering adding solar to your property, keep this in mind as grumpy neighbors, while hopefully few and far between, can make life difficult.
Also, if you are part of a home-owners association, it would be to your benefit to make sure – in writing – that solar panels are allowed. Nobody wants a ‘troublemaker’ coming after you, without the legal footing to stand on your decision.
As the saying goes, ‘Trust But Verify!
This article tends to go against the common narrative of solar panels increasing the value of your home. But then again, this is what we have encountered.
Please don’t misunderstand, clearly we are HUGE fans of solar power and recommend it at every opportunity.
But it has been our experience, first with building a new home and then five years later with refinancing the home, that neither the bank nor the appraiser sees solar panels as a bankable asset.
This is not to say that our local police department does not see our off-grid home as having no value. For more on this, watch ‘Grid-Tied Vs Off-Grid’. But the term ‘value’ should be clarified when it comes to what the mortgage company considers; monetarily speaking.
If you have any questions regarding what solar panels can realistically do for the bankable value of your property, reach out to an appraiser.
The housing market can vary greatly from location to location, and from year to year. Discussing this matter with someone who deals with home values everyday will give you a much better answer than any blog article ever could.
Remember, ‘Trust But Verify!’