I think most people are in favour of renewable energy sources & doing their part for the environment but if you’ve ever considered having them
installed on your home or are a Buyer looking at a home that has them then here
are a few points to keep in mind in terms of resale:
- The cost can be quite high & if you’re “leasing to own” the panels. How attractive the term & rate of the lease are will have an effect on your sale
- You’re not going to realize any profit until you’re finished paying for the panels…some terms are as long as 10-15yrs!
- A Buyer’s agent is most likely going to request that the contract, including any penalties be paid out on closing (which could eat up tens of thousands of dollars of your equity!)
- A Buyer’s agent could request that the panels be removed prior to closing & any damage be repaired by the Seller
- Insurance could be an issue...a Buyer will want to ensure they’ve got a condition for insurance in their offer, some companies won’t insure or will charge much higher premiums due to an increased risk of fire for panels that are installed on houses or out-buildings
- Another condition that should be included is a lawyer’s review of the contract for the panels…depending on circumstances, an accountant’s review may be prudent as well.
- There are tax implications, income earned (through a buy-back program for the electricity you produce) will need to be declared & it’s possible that the increased income could move a Buyer into a higher tax bracket (this is where an accountant’s review could come in handy)
- What kind of additional costs will a Buyer incur in the future if there is a need to replace or have the roof repaired? (Due to taking the panels off & having them re-installed)
- What are the costs involved in servicing the panels? As well as disposing of them at the end of their life expectancy?
- There is a “ton” of paperwork to complete a transfer in the event of the sale of the property
- It has been suggested that speaking with a professional installer will give Consumers a more realistic picture of repairs & replacement costs rather than asking the manufacturer
- Some Buyers will feel it’s too much hassle to deal with and move on to a home without solar panels
So that’s a long list!
On the plus side, if the
panels are owned free & clear & the income earned will not cause taxation issues then it’s certainly a rosier picture! Some of the contracts are
quite profitable; particularly those of the early adopters…sadly the buy-back
rates have been slashed quite dramatically over the years!
Some REALTORs ® are saying that solar has a huge negative financial
return & even when the panels ARE generating a profit that the profit is
still not offsetting an overall decrease in value for the home!
That’s a pretty bold statement….any thoughts or
experiences with solar panels? I’d love to hear them!
ps....To find out more about the Ontario Power Authority’s microFIT
Program, visit their website here
