What is Net Metering?
Net metering is the policy that really enables your solar to work for you. In most US states, there is a policy that says for every kilowatt hour that you put into the grid, you will receive a credit for that kilowatt hour. So if your solar system produces 10 kilowatt hours of energy, and it puts those 10 kilowatt hours into the grid, that's 10 kilowatt hours you get back. That's what net metering is.
This is really important because your solar system produces energy during the daytime, but you use energy during the nighttime as well. How it works is that during the daytime, you put a lot of energy into the grid, and it goes “on account” to be used later when you are not producing electricity. So you're banking all those credits. Then at night (or on a cloudy day), you pull that energy off the grid, and you use all the credits you accumulated.
That's net metering. It's an amazing policy. One that we all as consumers and advocates for clean energy have to continue to fight for. It has enabled solar to develop so much and, in effect, gives you the ability to use the grid as your own battery, reducing the cost of electricity for you and your family.
What is the Solar Investment Tax Credit?
The Solar Investment Tax Credit (also known as the ITC) is available for qualifying homeowners who install solar. When you go solar, you can apply for the ITC from the federal government when you file your taxes which, for some homeowners, can result in a reduced, or even zero, tax liability. The ITC was recently increased from 26% to 30% giving homeowners even more reason to go solar. That's why customers who are ready to go solar should do so while the tax credit is maximized.
The ITC is a huge part of the value proposition of solar. For example, if you go solar and finance (or purchase with cash) your system for $30,000, you could receive an income tax credit equal to 30% of that $30,000 solar system, depending on the size of your tax liability. And if you finance your system, you can be eligible for this benefit without paying ANY money down for the system. That is why you want to go solar today and take advantage of the generous federal subsidies we as consumers have available in order to support clean energy and save money.
How do Solar Warranties Work?
One of the most common questions our clients ask is how a solar warranty works. There are three types of solar warranties:
The first one is on the panels. When you buy a solar system for power, those panels are typically warrantied for 25 years. What that means is they're guaranteed to work for 25 years and continue to produce power. Now, depending on the panel you buy, that production guarantee could be anywhere from 85% of the power they were producing on day one, all the way up to 92% if you opt for a higher-efficiency, premium panel.
The second type of warranty is on your inverter, which is the component of your system that transforms the energy you get directly from the sun into usable AC current that can actually power your home: turn on your lights, power your A/C, help you watch TV and all that good stuff. Your inverter is warrantied anywhere from 12 to 25 years. And a lot of times we will also include an extended option for 30 years, which really makes it a complete no-brainer.
Now the third part of the warranty covers what's called the workmanship. Our workmanship warranty is for 10 years. That means all the work that we do on your house when we're installing your solar system, when we're on your roof while you're working, when we're working inside your electrical panel. All of that work is guaranteed for 10 years to make sure that there's absolutely no issues.
25 years on the panels, 12 to 30 years on the inverter, 10 years on the workmanship warranty. Truly, we've got you covered when it comes to protecting your solar investment and making sure that it provides value to you for the long haul.
Is Solar a Good Investment for My Family?
It is well-documented that solar increases the value of your home. The reason for this is that it's a home investment that actually produces income. A solar system sits on your roof and generates electricity, and there is a value for each kilowatt of electricity your system produces.
In fact, each KW you produce is a KW that you don’t have to purchase from your electric company. Plus the future value of all of those savings is valuable to the next buyer of your home.
Another amazing reason to go solar today - get the economic benefits today, and get more for the sale of your home tomorrow.
How Do I Know if My Home is a Fit for Solar?
Not every home is eligible for solar, so cross your fingers. Let's hope you're one of the lucky ones, and you can save money. There are three main factors:
Number one is called "sun exposure" - does your roof (or the location of your solar panels) get enough access to the sun? One of the things we'll do is analyze your sun exposure from satellite images and other technology to make sure that you've got what's called "proper solar access". There's a percentage we're looking for which, as long as you’ve got that, you're good to go.
Number two is orientation. What direction would your panels be facing? Ideally we would want the panels facing South or West, since that is where the most sunshine hits. So you're looking for the right sun exposure, you're looking for the right orientation.
And then there's just number three. Are there any structural issues with your house or roof that would make it difficult to mount solar panels? And if it turns out that it doesn't work for solar, no harm done, you got educated and you know it is what it is. But that's the reason why I encourage you to reach out and get a no-cost proposal from us so we can actually do the hard work of analyzing your property and show you exactly how much money you can save by going solar.
Think Solar is too Expensive?
One of the biggest questions that everybody has about solar is "How do I pay for it?" The old misconception was that it actually took cash to go solar. People thought, well, solar is expensive, because I have to spend this upfront cash. That could not be further from the truth.
Today, in fact, solar is the least expensive option to get energy in most of the United States. And with low interest rates and lots of finance programs, it is typically easy for most homeowners to get zero-down financing. There are two primary ways to finance your solar system today: with a low interest rate loan or a lease. Let's talk about both options.
A zero down loan means that you can choose a loan term, whether it's five years, 10 years, 15 years, 20 years, or 25 years. We offer all of those, and we offer them at the most competitive rates possible. Now, when you go solar with a zero down loan, what that means is, you finance the system through your loan provider, and instead of paying a monthly bill to your utility, you simply pay a less expensive monthly payment to your loan provider. So you get to keep the difference.
If, for some reason, a person can't get a loan, they will often choose a lease. This may be because they don't have a tax liability and can't keep the tax credit. A lease is exactly like it sounds - every single month, you'll pay a lease payment. And you'll pay that usually over 20 years. It's that simple. Your lease payment is going to be less than what you used to pay your utility bill, which means you're saving money every single month.
We will help you figure out what is best for you. When you get a proposal from us, our consultants are going to sit down with you. They're going to show you all the different options and help you decide what's best for you. They're going to show you how much money you can save with Powur and we're going to make it as easy as humanly possible for you to understand and make your decision.
What is Involved in Going Solar?
So what happens when you sign an agreement to go solar with power? Actually, the agreement is the hardest part! Once you sign your agreement, we do the rest. We will assign you a dedicated project manager that will keep you posted through every step of your project.
First, we will schedule your site survey. Next, we create the design that gets submitted to the City to receive a construction permit. Once the permit is received, we schedule your installation, which typically takes 1-3 days depending on the size of your system. After we finish installing the solar system on your house, we schedule the city inspector and/or your utility company to approve the installation and give you what is called “permission to operate”, or PTO. Once you have PTO, we power on your system and you can enjoy clean power for your home from sunshine. The whole process typically takes 30-60 days. Although much of that time is simply waiting for permits, inspectors and the like.
Do I Need to Buy a Battery?
There are two primary ways that homeowners benefit from owning a battery:
First, you can use the battery for backup power. If the grid goes down, you're still covered. If disaster strikes, if there's a hurricane in your area, or a fire, or any of the things that we're all dealing with now, on a much more common basis, having a battery will allow you to continue to have electricity in your home, even if your utility company can’t provide it.
The second reason is that you can often actually save money by getting a battery if you live in a region with specific rate structures where you would benefit from using stored power from the battery during more expensive times of the day. In many regions, net metering policy allows you to save money without the need for the battery, unless you want the peace of mind that comes from knowing that your home can provide electricity even when your utility company can’t. Ask your Powur consultant for more information. They'll be able to give you a detailed proposal of exactly how much a system will cost with a battery if you're interested in one. We work with all the biggest battery manufacturers and we can absolutely make sure that you get taken care of - whichever way is best for you.
Myths and Facts for Real Estate Agents
Unfortunately, even with the rising popularity of solar energy, real estate agents still largely misinformed about the pros and cons of working with solar in a real estate transaction. Whether you're listing a solar home, or are working with buyers who want the benefits of solar on their new home, as a real estate pro you need to educate yourself on the myths and facts surrounding solar and real estate. While we always recommend you seek the help of a solar professional to answer your questions, here are a few things to consider:
MYTH: It's a real pain to sell or buy a home with solar panels. I'm just going to avoid listing those homes and tell my buyer to avoid them as well.
FACT: Recent studies show that homes with solar power not only sell for more money (great for your seller) but they also are a huge attraction for buyers. Solar is definitely a "perk" when selling or buying a home!
Don't shy away from a solar home! A recent study by Zillow revealed that homes with solar panels sell on average for 4.1% more than the average market price of similar homes*, plus the demand is much higher. Truth is, with rising utility costs having a home with solar is considered a major perk to the potential buyer. Sellers who purchased their solar installations outright, or have a low-interest rate loan that can easily be assumed by the buyer, can advertise their home more successfully and realize a faster sale.
* National average across the United States - some states report even higher averages. For example, New York, California, and Florida report average sale price increase of up to 5.4% on solar vs. non-solar homes.
MYTH: You can't sell a solar home because most systems are leased and need to be paid off at closing.
FACT: You need to find out if it's a leased, owned, or under a Power Purchase Agreement. If it's owned, then it's usually super simple to sell without having your buyer to pay extra at closing.
When listing or recommending a home with solar panels, the first and most important facts you need to find out for your client is: is the system leased (or under a Power Purchase Agreement, which is basically a lease), or is it owned outright or owned via financing?
The ideal situation for both the seller and buyer is if the homeowner owns the solar system. Some sellers own the system outright (having paid cash or by using their home equity to pay for it upfront), and those situations are definitely more attractive to buyers. Even financed solar can be easily negotiated as most finance companies will allow the buyer to easily assume the existing financing or apply for new financing for the remaining balance of the contract. Of course, this could increase your buyers income-to-debt ratio so consult with your mortgage professional before entering into this type of agreement.
Unfortunately, though, not all solar installs are owned. Some systems are leased under either a direct lease through the solar provider or a Power Purchase Agreement. If the system is not paid off, then both the seller and buyer must determine their best course of action when negotiating the transaction. Major items to consider are lease terms, monthly fees and pay-off amount. Taking on a leased solar system could cause an increase in a buyer’s debt-to-income ratio, making them ineligible for a home loan. If the solar system is leased, be sure the lease is reviewed by a professional prior to entering into any agreement to list or purchase the home. A lawyer or independent (third-party) solar professional who has a good understanding of solar leases and solar panel systems in general is ideal.
So, obviously any sort of a leased system can be a real pain when it comes to selling your client's home. That's why at Renew Solar Group we do NOT offer our clients leases. With POWUR, we present very attractive financing terms that make sense to homeowners, and won't put them in a pickle if they decide to sell their home further down the road. We offer zero down, zero out of pocket financing at low rates. Or, your client may also consider simply taking out a HELOC or refinance to cover the cost of a new installation. This is a particularly attractive way to allow the homeowner to pay off their system up. Either way, we work with them every step of the way to make sure they get the best solar panels at a price that works with their budget.
MYTH: Older solar installs are antiquated and should be replaced prior to selling.
FACT: Solar panels have a long lifespan, but have them inspected to make sure they're working right.
Whether the solar system is owned or leased, it should still be inspected to determine its functionality. The average lifespan of a newer system is 25-30 years. If the system was built more than 20 years ago technology has advanced greatly, so maybe time to consider replacement (not to mention aesthetics have improved GREATLY during that time). It’s recommended that an independent solar company be hired to complete the inspection, making sure the chosen company is doing an in-depth inspection of all parts of the system. We are happy to recommend many professional solar installers that we work with to inspect the existing system and see if it needs to be replaced.
THREE ESSENTIAL STEPS FOR LISTING A SOLAR HOME
1. Understand how to market a solar home.
You and the seller should discuss how to market and list a solar home in the MLS. Setting accurate expectations with your listing will help attract the right buyers and minimize issues down the road. Your listing should state more than, “The home has solar panels.” Clarify that the system is owned or leased. Look for the “green information” section of the residential listing data entry form to accurately describe the home’s solar system.
It’s extremely important to follow these steps when listing or purchasing a home with solar panels. The only way to ensure a fair deal or valuation is to work with an independent solar company throughout this process. There can be real legal jeopardy and significant financial liability for the seller or buyer when one or the other fails to address issues associated with solar power. So, no matter your position in a solar home transaction, do your homework. Due diligence will be your friend.
2. Describe the solar benefits properly in your listing.
The next step in the process is to determine the size of the system, the production of the system, and the savings from the system.
The best way to capture this data is from the paperwork received from the company that installed the solar system. The original solar installer should have included the size of the system, the projected annual production in kilowatt-hours, as well as the avoided cost of electricity per kilowatt hour. If this information is unavailable, you can calculate the size of the system by multiplying the number of solar panels by the wattage of each panel. For example, a solar system with 30 panels that are 300 watts per panel will be a (30 x 300 = 9,000) 9,000 watts or a 9-kilowatt system. The next step in would be to calculate the annual production of the solar system. There are many variables that go into calculating production, such as the amount of shade, the orientation of the solar panels, the tilt of the roof, etc., which make calculating the production more challenging. As a general rule of thumb, assuming little to no shade, the solar system will generate approximately 120% of the total watts of the system. For example, a 9,000-watt system would generate approximately 10,800-kilowatt hours (kWh) per year. Once you know the projected annual production, it is relatively easy to calculate the annual savings by multiplying the kilowatt hours by the avoided cost of electricity. For example, 10,800 kWh X $0.14 = $1,512 in annual savings.
Of course, this can all be pretty complicated and you have enough on your plate with your listing and marketing. If you need any help, simply contact us! We're happy to help.
3. Compose the right message in your listing for optimal disclosure.
The third and final step in the process is to make sure that you have the correct verbiage in your listing to make sure that potential buyers have a complete understanding of the solar system. Here is the recommended verbiage:
"This property includes a 9 kW solar system that generates over 10,000-kilowatt hours per year. The current utility bill for this house is $12 per month. This solar system saves the current owner approximately $1,500 per year. (ADD If applicable): The solar system is still under warranty, and all warranties transfer to the new owner. The system is: choose one: (paid off in full and included in the asking price of this home) (financed with XYZ Financing Company and can be assumed under the terms of XYZ, please contact me for details) (requires a full payoff upon purchase at a current payoff amount of $14,272, please contact me for full details)."
Note: this is suggested wording only and may be differently worded to meet the requirements of your particular market and location. Consult with your local real estate attorney or your managing broker for advice.
