By Aiden ArmstrongOne of the common questions facing homeowners thinking of taking the solar route is – how will it impact my property value?
We’ve extensively covered the impact of solar equipment ownership on a property’s value. Akin to any long-term investment, solar power systems deliver consistent monthly savings, as well as long-term appreciation in property value, provided you purchase and own the equipment.
But, what about solar leases? How do they impact your property value?
There are many factors at play here, so let’s dissect each of them.
- Electric Bill Lock-in
Solar leases come with a powerful benefit – they lock-in your electricity prices for several years to come. So, even if your utility company’s prices increase, you will continue to pay at the same rate as before to your solar provider. This is a big advantage in Rhode Island, where electric prices have risen sharply over the years, especially for residential customers.
Now, imagine the kind of advantage this would offer homebuyers. They get a property that will impose them with a lower electric bill for years to come, when compared with a regular home. Calculate the potential savings for all those years to come. That could be the premium on your property (relative to market value), if you have a buyer that understands and appreciates the benefit.
- No Change in Tax
Although your property value increases, it doesn’t translate into proportional increases in taxes. As you don’t own the solar equipment, there’s no tax factor in play at all. So, you get all the benefits of a higher valued property, with none of the drawbacks.
Naturally, it’s no surprise that 70% of the residential installations are made through lease arrangements.
- Neutral Investment
Most solar providers allow easy buy-out options to customers. So, if you fear that your property’s value or popularity in the real estate market will take a hit, you can always buy-out your solar lease, and offer the solar equipment as a perk with the property.
Besides increasing your property value, buy-out will allow you to transfer ownership to your new homebuyer, or simply move the equipment to your new home. Either way, the net impact on your property value would be none.
Conclusion
Solar power’s popularity has only recently picked up and it is making huge strides not only in Rhode Island but across the entire country. Homebuyers who purchased homes with solar equipment have shown remarkable satisfaction rates with their purchase. A few years from now, as the solar power’s popularity surges, so will your property’s value.
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