The interest in solar panels for homeowners has grown exponentially over the past few years. According to the Solar Energy Industries Association, Colorado is one of the most popular states for solar conversions, ranking 13th overall for solar installation. Yes, they help you save energy and lower your energy bills, but are they worth it? Does the ROI (Return on Investment) make sense for you? Every homeowner's scenario is different but it is extremely important to know all of the facts before adding panels to your home or purchasing a home with solar panels.
According to the Energy Information Administration, the average Coloradan pays around 11.36 per kilowatt-hour, which is below the national average, and consumes around 711 kWh monthly, which is also below the national average of 893. Because of this, solar panels are a bit less valuable in Colorado compared to a state with high electricity usage and prices.
How much do solar panels cost to install?
The cost can vary by how many and types of panels; however the average price of solar installation ranges from around $15,000-$25,000. Many companies will try to charge $30,000-60,000 - don't fall for that! It is important to consider the ROI when thinking about the monthly payment on them, the loan terms, and how long you will be living in the house before selling. To many buyers, while solar panels seem like a nice benefit, it is an additional monthly cost to them, which can be a turn-off or put them out of budget for the home (especially when we are faced with today’s high interest rates).
Do Solar Panels Increase the Value of My Home?
In short - yes. But not by as much as solar companies will try to tell you. Most appraisers will only give a $5-10k credit on value (if any) and that is ONLY if they are OWNED! Please do not let the primary reason for you getting solar panels to be to increase your value because it simply won’t compared to a kitchen or bathroom update.
Lease vs Owned Solar Panels
You can lease solar panels. However, please don’t when you can avoid it! Many companies will let you lease solar panels, in which the buyer would still take over the lease agreement, but it can sometimes be less expensive and doesn't require them to absorb the outstanding loan if there is one.
While leased panels may be cheaper and “easier”, they do not increase the value of the home and are more often seen as a burden by Buyers.
What Else Should I Consider When Looking To Purchase Solar Panels?
According to NAR (National Association of Realtors), there are several questions you should ask before purchasing a home with solar panels. Some of these include:
Are the solar panels leased or is there an outstanding loan?
When was the system and inverter installed?
What is your average yearly or monthly savings?
How much is your average energy bill?
Are all of the system components operating correctly and when was the last time the system was serviced?
If the system is owned, is it enrolled for solar renewable energy credits (SRECs)?
Are there any warranties for equipment or production?
Over the past few months, I have had several instances come up on the buy and sell side relating to solar panels. It is extremely important to get all of the facts and know what type of situation you are putting yourself in before purchasing solar panels for your own home or purchasing a home that already has solar installed.
I'm here to help! Please don't hesitate to reach out to me with any questions or concerns about solar panels!