1- Does it save you money?
The answer to that is it usually does. Rather than taking $20-35,000 out of your pocket to start saving $40-90 a month on your electric you can lease with little or no money down. You start saving money from day 1 on most cases.
2- Does it affect the value of your home?
The answer is No it does not increase the value of your home. Lenders/Appraisers do not consider it to have any value since you do not own them and there is a debt outstanding. Purchasing them outright would of course be a different story.
3- How does it affect my chances of selling the home?
That can be a mixed bag and a lot of people do not understand leasing so it scares them away. Also the lender is going to put restrictions on the buyer of the home. See the comments about the new regulations:
I am forwarding the FNMA guidelines (probably more than you want to know) on leased solar systems. We have experienced delays in the past depending on the solar lease company providing the necessary documentation.
As a recap:
· Solar panels cannot be included in value by appraiser. (We will instruct appraiser when we order)
· Lease payment is used in the debt to income ratio in qualifying (please provide payment amount ASAP)
· Owner of panels must have general liability insurance that covers damage to mortgaged property.
· Owner of solar panels cannot be named as loss payee on homeowner’s insurance policy. (check with your agent, this can be problematic with some companies)
· Borrower’s homeowners insurance must exclude coverage for any tort liability in regards to the panels.
· Lease must include that panels are removable without damage to the mortgaged property.
· Any damage that does occur is responsibility of the panel owner.
In the past we usually see a separate letter agreement that covers most of what is not in the actual lease. We will need the executed lease assumption prior to final underwriting with an effective date of our close of escrow.
So as you can see the answer to the question of “Should I lease my solar panels” has to be strongly considered before moving forward with them. If you have questions about this or other real estate questions please do not hesitate to contact us.
Thank to Lowell for his information regarding the regulation lenders have to deal with when the buyer is obtianing a mortgage;