Homework- Before Going Solar
We’ve made a video in the past about solar and the impact on home values, plus some of the reasons why you might be thinking of adding solar to your house. We continue to learn the truth about solar in Florida and the challenges some homeowners are facing, and what to know before going solar.
Solar energy can save you money, but it does cost you money too, possibly in unexpected ways.
If I had a dollar for every time I heard a solar salesperson claim that solar panels add value to a property, I probably won’t be sitting here right now. I’d be on the beach now if it was that simple.
To add value to a property an appraiser would typically need to find three recently sold comparable homes that had solar panels that were similar to your house. Then three without. Then compare the sales prices and adjust them accordingly to see: Did the group with the panels sell for a higher price than the group without?
If none of the homes surrounding yours that are similar have sold recently with solar, then there might not be any comparable homes to justify adding value to your sale. NO MATTER WHAT THE SALESPERSON SAID.
Solar Resale Value
The only other way to get around that is to determine the resale value of the solar system. (This is assuming you own it outright). Take the quote and ask whether the mortgage underwriter will give it any consideration. They’re not necessarily going to say yes to that. Remember, you can spend a couple of hundred thousand on a new swimming pool and only be credited around 50% of that on a resale, not the full amount.
Voiding a Roof Warranty…?
Let’s talk about the roof of your house. Solar panels can have a life of 25 to 50 years per the salespeople.
You don’t get a roof with a life that long typically. When you add solar panels and then your roof needs replacing, you’ll have to pay to have all the solar panels removed and stored. Next, get the roof replaced- and then pay to have the solar panels reinstalled.
if you added solar purely to save money, the unexpected expenses will chip away at some of those savings.
Are the solar panels still under a warranty or not? If the solar panels are removed and then reinstalled, is the warranty on that brand-new roof valid? If you have a separate company access the roof and add solar panels to it, that can void the warranty from the roofing company.
Why do so many solar companies go out of business?
We’ve talked personally to quite a few people that installed solar and we’ve investigated it at length and at the end of the day we’ve never yet pulled the trigger. Companies that came so highly recommended to us by multiple people, (companies that we might have signed on the line with) have gone out of business. They were offering a warranty that their company would come out and service the panels.
Is the Solar warranty lost?
Now, who do you call? If you’ve got a problem, and a lifetime warranty from the manufacturer of the panels as well. Finding a solar company that will now come out, go on your roof and take on the maintenance or repair of a system that they didn’t install, seems to be a bit of a hiccup that people are running into. Even the manufacturers are going through changes right now. LG, for example, stopped solar panel manufacturing altogether in 2022.
Homeowners’ insurance problems with solar
The next thing to look at is your home insurance. Some insurers are dropping owners who install solar panels. Based in Florida, we’re having this conversation in an environment where it’s a home insurance nightmare. Insurance companies are going out of business and leaving the state. People are getting notices of non-renewal as mentioned in a previous video, which I’ll link up here as well.
Getting home insurance at all is already an increasingly concerning thing. If you’re here in Florida, don’t make the mistake of installing a solar system without checking your insurance options first.
Restrictions on solar from insurance companies
Companies that do insure roofs with solar systems are allowed to set some pretty strict conditions for that coverage. Examples include only covering homes with solar systems installed after 2016 or on shingle or metal roofs. Ora roof 10 years old or less, or on flat roofs, no older than five years.
Now, do you see that? That’s way shorter than the life of the panels.
There can be restrictions such as the system can’t produce any more than 10 kilowatts of electricity. That might match the typical rooftop system capacity, but some are gonna be bigger than that.
Some companies won’t ensure solar systems that are mounted on clay or tile roofs.
Florida Best Quote Insurance update: Net Metering
I spoke with an experienced insurance agent recently, it was just last week from Florida Best Quote insurance. (If you want an introduction, let me know).
They shared that they’re now only seeing about three insurers in Florida, who will cover solar panels. And this is in part though, due to a completely different issue than what we’ve even touched on and it’s called net metering.
What is Net Metering?
It’s when you are manufacturing your own electricity- you’ve got your power station on the roof, and you are producing more power right now than you can use right now. You can’t store it unless you’ve got a battery system as well, which adds to the cost. So you sell that power back to the power company again. Basically the power companies are increasingly asking for proof that the homeowner has a $1 million liability policy to cover the fact that they’re net metering.
most homeowners insurance companies won’t cover properties that are basically commercially producing electricity on behalf of a power company. So that’s definitely something that a lot of the people that we are talking to aren’t aware of.
I hope this helps. Buying or selling a home with solar on brings a whole other slew of things and we’ll be talking about that in another video. If you want an introduction to an insurance agent that can help you, let me know. And in our next solar video, we’ll cover what to consider if you’re thinking of buying or selling a home that has solar.
Here’s an example of a company that want to convince you solar is worth the “investment”:
Selling a House in Florida with Solar Panels
