Solar Leases Add Zero Value to the Sale of a Home

While leased solar panels allow homeowners to reap the benefits and low costs of clean, renewable energy without having to invest in a full home system, a solar lease doesn’t actually add value when it comes time to sell your home. 

Buying out a solar leased system doesn't add value to the purchase price of the home, however it does allow the home buyer to capture the full buyer's offset value that solar ownership offers. 

The Buyer’s Solar Offset Value is the difference in what the home buyer would have paid in electricity to the local utility company over the lifetime of the homeownership. Most calculations are done based on owning the home for ten years as this is the average length of homeownership. Solar systems should be assessed based on the seller asset value of the solar system. 

The Seller Solar Asset Value is the value of the equipment itself as it sits on the roof taking into account: the size of the system, the electricity output of the system, the age of the panels and inverters and length of time remaining on their warranties. All this is accounted for, along with the depreciation of the output of the system as measured by historical degradation. 

The reason to find out the asset value of the system is to determine how much to pay the lease company for the system. They will give you a price but it's good to have an unbiased third party you can compare that number against to know if you are paying a fair price for the solar system. 

You might think this is contrary to the lease company’s business model but, on the contrary, most leasing companies are always trying to raise funding and appreciate cash infusions so they can onboard more new lease customers. Most lease companies do not realize a profit for the first few years since their upfront cost is so high compared to monthly lease payments. 

All that to say, the solar system gets older and eventually decreases in value– though probably not at the rate you might guess. To find out exactly how much the solar system on your roof, or that of your client’s is worth, contact Spark at SparkGreenHomes.com.