Solar leases and owning solar panels can affect property values in distinct ways:
Solar Leases
Key Points:
- No Increase in Property Value for Homes: Leased solar panels typically do not increase a home’s property value since you do not own the panels. This contrasts with purchased solar systems, which can enhance a home’s value by up to 6.8% on average.
- Difficulty in Selling: Homes with leased solar panels can be harder to sell because potential buyers may be hesitant to assume an existing contract, complicating the selling process.
- Commercial Properties: However, for commercial properties, solar leases can increase property value by enhancing Net Operating Income (NOI) and providing a stable revenue stream, making them appealing to investors.
Owning Solar Panels
Key Points:
- Increased Property Value: Purchasing solar panels can significantly increase a home’s value, as it is a fixed asset that belongs to the homeowner. This has been shown to increase property values by averaging 6.8%.
- Tax Incentives: Homeowners who purchase solar panels qualify for tax credits like the Solar Investment Tax Credit (ITC), which can further increase the financial advantages of ownership.
- Long-Term Savings: Owning solar panels offers higher long-term savings potential compared to leasing, as you avoid ongoing lease payments.
Comparison Summary
| Feature | Leasing Solar Panels | Owning Solar Panels |
|---|---|---|
| Property Value | Generally does not increase value for residential properties; can increase NOI for commercial properties | Typically increases property value |
| Tax Incentives | Tax credits go to the leasing company | Homeowner qualifies for tax credits |
| Long-Term Savings | Lower long-term savings potential | Higher long-term savings potential |
| Maintenance | Leasing company handles maintenance | Homeowner responsible for maintenance |
| Home Sale | More challenging to sell due to contract assumption | No issues with selling; system is an asset |
In summary, while owning solar panels can generally increase property value and offer long-term financial benefits, leasing solar panels does not enhance property value for residential homes but can provide financial benefits in commercial settings through increased NOI.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-solar-leases-affect-property-values-differently-than-owning-solar-panels/
