Before you get involved in Solar energy – please do your homework. Whether you are the buyer or seller in this transaction, there are important things to consider when it comes to the transfer of ownership of your home.
Do you Lease or Own the panels?
OWNED PANELS: If the panels are owned by the seller, then they should be factored into the price of your home just as any other asset would be. This can usually be accomplished by searching comparable homes with owned solar panels.
A Solar Renewable Energy Credit (SREC): An SREC is created for every megawatt hour (MWh) of electricity produced by a solar generator. SRECs allow a seller with a solar array to use electricity that is produced by the panels and then separately sell the SREC to a utility company. You should factor in an SREC when valuing the asset.
Some solar owners use SREC brokers to handle the sale, so if you are a seller who is part of a ten-year SREC program you may want to consider selling your future credits through such a broker. If a seller does this, they would then value their solar panels based on the energy savings that they provide.
Buyers need to ask sellers if they are part of an SREC program and whether the SRECs will be transferred with the panels. If they are, a buyer would also want to know what the average annual output of the panels has been so that they can properly value them.
Leased Panels: If the panels are leased, it can be a bit more complicated. When a seller has leased solar panels, it is recommend that the seller contact the leasing company right away to let them know that they are planning to sell the home. In fact, some solar companies have set up departments specifically to work on lease transfers.
What’s a UCC-1: The solar company may reference a UCC-1 (Uniform Commercial Code – 1) that has been recorded with the property. A UCC-1 is a legal form that acts as a lien against the solar equipment on the property and is used by the solar companies to protect their interest in the leased panels. These finds should be recorded at your local registry of deeds. It is important to know whether or not a UCC-1 has been recorded with the property, because some lenders may have concerns that the UCC-1 will take priority over the mortgage in the event of a bankruptcy. Some companies will remove the UCC-1 filing and then replace it when the new mortgage is recorded.
Home Buyers: Buyers who are interested in a home with leased solar panels may want to remember to factor the monthly lease cost when determining whether or not you can afford the home. Your lender will most likely consider this when making a determination on your loan. Also, buyers should review your credit scores because the solar leasing companies are going to ensure that the buyer can assume the costs of the lease before they approve a transfer.
LEASED PANELS: A seller client has three options when dealing with leased solar panels:
1. They can buy out the lease;
2. Transfer the lease to the new buyer; or
3. Attempt to transfer the panels to their new home, although this option may only be available in rare occasions.
As you can see Solar panels can at the very least complicate the purchase and sale of a house, and at the most stop the transfer all together if the item is not handled properly from the get-go! Please use caution when buying or selling a house with solar panels.
Got questions? I’ve got answers – please feel free to contact with your house Purchase and Sale concerns!
Tori Denton, PSA, Realtor®
Need more information?
The Attorney General published the following helpful informational sheet on solar panels:
Source: Shining the Light on Solar BY MAR LEGAL STAFF July/August 2016
Not all home improvement projects are created equal. Some renovations may cost a lot but not add significant value to your home. This list goes in the opposite direction: Here are some inexpensive home improvement projects that will not only increase your enjoyment of your home, but will also increase the home’s value.
- High quality ceiling fans: In a recent National Association of Home Builders survey, ceiling fans ranked No. 1 as the most-wanted decorative item. If your ceiling fans are outdated, replace them with something in the $400 range—it’ll make a big difference when it’s time to sell.
- Trees: Mature trees can be worth as much as $10,000 toward the value of your home. Trees also protect your home from the elements and prevent erosion.
- Energy efficiency: Buyers are increasingly interested in saving energy, so any efficiency update is worthwhile. Switching from a wood to gas fireplace is a great start.
- Outdoor lighting: Exterior lighting is great for highlighting the accents of your home, and you can typically expect a 50 percent return on investment.
- Molding: You can finish a room with crown molding or railing for as little as $1.50 per foot if you take a DIY approach, and it’s extremely desirable among prospective buyers.
As with any home improvement project you should consult your personal qualified Realtor®. As a professional I can help you determine what is popular in the local, regional, and national market. I can also tell you what buyers are looking for when purchasing a home. I can give you options for minor and major remodeling projects and offer you choices that will have the highest and best return on investment for your geographical area.
Consult with an experienced professional – Contact me today! 413-301-4614
Myth 1: Replacing single-pane windows is a good investment.
According to the Energy Star program, replacing old single-pane windows with double-pane, low-E windows will save you money every month. While that’s true, it’s not the entire story. In an average house with 20 or more windows, it could take up to 30 years to recoup the cost. Most people don’t stay in their home that long.
Money-saving alternative: Storm windows are less expensive, customized to fit over existing single-pane windows and installed by homeowners. Storm windows save energy by creating a second layer of air that reduces drafts and escaping heat. Newer models can be left on year round, as they open and close.
Myth 2: Exterior caulking is the best way to seal leaks.
The purpose of exterior caulking is to keep water out, not prevent heat from escaping. Making your house more energy efficient usually requires improvements on the inside.
Money-saving tip: Underneath the house, the floor joists and sill plates around the foundation are usually poorly insulated. A simple bead of caulk where wood meets foundation can help reap rewards. Elsewhere, however, more is needed. In the attic, blown-in insulation will make a dramatic difference in energy savings (especially in older homes) helping keep hot air inside in winter and outside during summer.
Myth 3: Closing registers saves energy.
Forced-air heating systems are more efficient with the registers open. And over time, ducting can develop leaks, so closing registers only forces more air out of the leaks.
Money-saving tip: If you have easy access, patch or replace old ducting with obvious air leaks. Reduce the need for forced-air heat by placing more efficient space heaters in rooms you spend the most time in.
Small losses of energy can add up, but locating them often takes specialized equipment. That’s why one of the best home improvement investments you can make, both to identify energy loss and get inexpensive and simple solutions to close those gaps, is arranging an energy audit through your utility company. Don’t forget to ask about rebates or incentives when you schedule the appointment!
Source: The Family Handyman