Q: I am thinking about solar panels. Are they a good investment and do they help increase your home’s value as the salesman said?
A: Solar Panels aren’t new to Florida. It is The Sunshine State after all. They have been used as a means for energy production for many years, especially in the pool industry. In recent years though, the call for clean and renewable energy has created a higher demand for solar panels all over the world. As energy costs rise and consumers become more mindful of their carbon footprint, the solar industry has swarmed into Florida’s real estate market with promises of big savings for the environment as well as the pocket book. While this all sounds great on the surface, any deal involving improvements to one’s home should be scrutinized and homeowners must always ask themselves, “Is this the right investment for me?”
When it comes to the positives of going solar, the industry has two of the most attractive talking points: Save the earth and save money! Solar really does create clean and renewable energy while ultimately saving the homeowner money over time. Installing “no money down” solar panel equipment at a house basically replaces a constantly rising and fluctuating electric bill with a flat-rate loan payment. After “X” number of years, when the homeowner has paid off the loan for their equipment, then they really begin to see the savings solar provides since they no longer have to pay any type of monthly power bill.
However, that investment in the equipment is what creates the biggest “Con” for solar as far as I am concerned. Length of investment is what really makes or breaks solar’s value. The current average time that it takes to payback a system in Florida is roughly 10+ years. Depending on the finance amount and size of the home, this timeframe could be even longer. That means the types of savings companies are “selling” to customers will not really be seen for 20-30 years. In the recent past, I had a client that added $30,000 in solar panel equipment to their home. When they went to sell shortly after, the appraiser gave them a dinky $5,000 in credit to add to their overall home value. I also just heard of another agent whose client installed $42,000 worth of equipment and received a $0 credit from the appraiser! Imagine selling your home in a hot market after owning it for only 5 or 6 years and turning a tidy profit. Then you realize you have to fork over tens of thousands of dollars to pay off the solar equipment that was supposed to save you thousands of dollars. That is when the juice just isn’t worth the squeeze.
Yes, it is true that solar panels are attractive additions for their very real and positive incentives. They make homeowners feel good about doing their part to save the earth while also saving a bit of money. Unfortunately, it is not the functionality or ethics of solar that come into question but the investment. The investment simply does not pay off for everyone. You can avoid spending your money on such “over improvements” that won’t yield a return upon sale. Just remember to make it a point to read the fine print, do the math and ALWAYS ask yourself, “Is this the right investment for me?”