As with any discussion on solar leases and the sale of a solar home in Phoenix, the idea of pros and cons become an integral foundation for both the proponents and detractors of solar leases. As an experienced real estate broker that has worked both the buying and selling side for solar homes that have a solar lease, I can attest to both sides of the discussion as outlined in this article. Both the pros and cons will be considered from the aspect of selling a solar home in the Phoenix area with a solar lease.
The PRO side of Solar Leases in Phoenix
The Buyer Saves Money. In the current real estate market, I have yet to find a solar home seller that is not saving money each month from their solar system. While their net savings is offset by a monthly lease fee, there still is a net savings with a fixed monthly payment. With each passing month and as utility rates increase, the fixed cost of the monthly lease stays the same, thus increasing the savings potential for the home owner. Who doesn’t like to save money?
Homes with Solar Leases Sell Quicker. OK, I have to admit that this took me by surprise too. Looking at sales data in the Phoenix area for August 2014, homes with a solar lease sold in 64 days compared to an average of 88 days for all homes on the market. Even more surprising was the fact that solar homes with a solar lease outpaced solar owned systems too (64 days versus 84 days).
Maintenance Free Solar. An integral component of all solar leases is an equipment warranty to cover the solar panels and integrated system. If it isn’t working, the lease company sends someone out and they fix it. If you own it, you fix it.
Smaller Carbon Footprint. For those that factor the environment as a factor for having solar, each kilowatt generated by solar offsets 1.37 pounds of carbon that would have been produced by the local utility (based upon EPA estimates). Having solar almost makes it worth driving around in that gas guzzler…just kidding.
Enhanced Marketing of Home. It amazes me how many real estate agents view solar as a liability when selling a home! As an experienced solar broker, I have found that solar adds an entirely new dimension to a home’s marketing, allowing me to reach out in ways that I cannot do with the average home in Phoenix. Solar marketing allows me to distinguish the home from the competition in ways that other agents cannot, thus giving my client a competitive advantage over everyone else.
Prepaid Leases. Prepaid solar leases provide the best that solar has to offer. Not only do the owners have all of the aforementioned benefits, there is not a monthly payment associated each month for the lease. The net savings each month increases and the cost of the prepayment was bore by the previous owner.
The CON Side of Solar Leases
Lease Transfer. Solar leases add an additional step in the home closing process. The buyer must agree to transfer the lease into their name and assume taking over the monthly payments. Given the simplicity of the lease transfer process nowadays and assuming that there is a net savings each month, the lease transfer is not as big of an issue as some of the detractors like to make it out to be.
Buyer Must Qualify For Lease. Most leases have provisions requiring the buyer to credit qualify for a solar lease in Phoenix but I have found that if a buyer can qualify for a home loan, they can qualify for a lease. If someone could not qualify for a home loan, would you want them buying your home anyways?
As of 2017, most mortgage lenders do not require the buyer to include the lease payment as a part of their qualifying for a home loan.
No Value Added to Property. Yes, it is true that a solar lease does not add additional value to the property since the equipment is considered personal property and not a fixture on the home. However as mentioned above, there are value added benefits from solar leases ranging from a quicker sales time on average to a cumulative net savings for the home buyer.
Thinking about selling a solar home in the Phoenix area that has a solar lease? Give the Solar Home Broker a call at 480-888-1234!