How to Increase Utah Home Value With Photovoltaics
While many like the idea of solar, many Utahns are yet to experience its benefits. Often these individuals believe solar won’t add value to the house and will compromise the integrity of the roof, which may impact the roof’s durability in the event of a storm, therein compromising the potential market value of the home. Not all residential solar installations add market value to the price of a home, but there are some instances in which having solar does increase the Utah home’s value.
To determine whether a solar installation will add value, we need to assess a couple of things. How solar appraisers typically look at solar, why solar has become popular in Utah, and the pros and cons of different financing options.
Utah Housing Market Appraisals
In Utah, the appraiser takes into account the size, location, age, and updates to the home, comparing them to homes with similar features currently on the market. The comparison of these features is called the “fair market value” (FMV). Together these factors determine the worth of the home and the added value of a home’s updates, solar panels included.
How an Appraiser Evaluates the Value of Solar Panels
Appraisers first consider the financing methods used to install solar. If the homeowner doesn’t own the solar array, it’s appraised as a debt, which won’t count in the appraisal.
In order for solar panels to increase a home’s price, the owner has to either pay cash for them in full, have the remaining loan value included in the home purchase price, have the financing paid in full, or have payment fully secured for them in the first mortgage. If the solar array fits one of these qualifications, its appraisal is based on the solar array, the offset of the electricity bill, the efficiency of the system, and the “going” price for Utah homes with solar.
Why Solar Homes Have Become Popular in Utah
As of 2019, Utah ranked 9th for solar energy production increase. The increase in solar-powered homes stems from both consumer perception and the incentives of solar energy for homeowners, like pro-solar policies that make solar more affordable in Utah. Together these two factors have made adding solar to Utah homes, businesses, and utilities a priority for many Utahns.
How Solar Panel Contracts Affect Home Value: Leased vs. Owned Solar.
There are many financial differences between leasing and owning solar panels. Utah homeowners should know that there will be a stark difference in the difference solar provides in the home value depending on how the array is used. If it is leased, it will not impact the home’s value at all, since the person who potentially buys the home will not have the right to use the leased array, unless the seller convinces the buyer to take on the lease.
The most reliable way to increase a Utah home’s value through installed solar is by paying for the system in cash, putting the home on the market, and letting the buyer purchase the home as close in time to when the installation was completed as possible, since the solar modules will be more efficient if they’re newer.
The chief reason Utahns lease solar is the maintenance package. Because the solar company owns the array, they take care of it, which relieves those concerned about maintenance costs.
However, the downfall of leasing an array comes into play when the homeowner tries to sell their Utah home. Since the homeowner doesn’t own the array, they either have to pay extra to purchase it or pay extra to have it removed early.
If the homeowner keeps the array through the duration of the loan, they often don’t own it afterward. They either pay extra to keep it, or they have them removed and hope the installer seals the holes properly.
Essentially, solar does not outright increase a Utah home’s value unless the array has been purchased by the seller. It’s also the cheapest option in the long run, even though monthly payments may be higher than leased solar.