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We are seriously considering adding solar panels to our home and are very new to the process.
We live in a duplex where we occupy the bottom unit and rent out the top. The units are on separate electrical meters. Does anyone have insight into how this would affect a solar system? Would we need to have one account with the electrical company and do some sort of split with our tenant?
We are seriously considering adding solar panels to our home and are very new to the process.
We live in a duplex where we occupy the bottom unit and rent out the top. The units are on separate electrical meters. Does anyone have insight into how this would affect a solar system? Would we need to have one account with the electrical company and do some sort of split with our tenant?
Why couldn't you just put the panels on the roof and tie them into your panel instead of the upstairs panel? If I'm reading things correctly, that seems like the best option. No need to split.
I'm sorry, but this agent is wrong. There are a lot of baffling statements here. First, it's no easier to remove solar panels than it is to remove an electric panel or kitchen cabinet. In some sense, anything can be removed. But solar panels are as "attached" as almost anything else in the house. Second, individual items aren't "included" in mortgage financing -- mortgage financing is based solely on the appraisal, and owned systems certainly can and should be included in appraisals (https://singlefamily.fanniemae.com/media/23651/display). Finally, I don't know what it means for something to be "included with the price" -- the market sets value, and the market values free electricity. That's why the studies that have looked at this have concluded that owned systems do add value. Maybe this agent meant that it couldn't be included in the appraisal, but that's also incorrect (see my Fannie Mae link).
This agent is wrong, plain and simple.
What is interesting about the document you link to from Fannie Mae is the chart provided. In two cases the Appraiser is prohibited from adding the solar system to the appraisal. In one case the Appraiser appears to be given the choice to add it to the appraisal but only if the financing terms allow it. Only in the first case when the panels are fully owned/paid off does it appear that the Appraiser can add it to the appraisal but is again a choice that the Appraiser makes. In ChristieP's example the homeowner apparently did not own the panels and they were still under finance.
I searched around and could not find any law/rule/etc. labeling the panels as a permanent fixture. I did find a Texas Real Estate Commission contract addendum for leased solar systems where TREC appears to indicate they are not fixed and are personal property or at least the property of the lesser and can be easily enough removed to complete a real estate sale. See item A(2) of the addendum found here https://www.trec.texas.gov/sites/def...rms/52-1_0.pdf .
What is also interesting is that TREC in their existing home sales contract went to great lengths to indicate what was permanently installed and built in items in items 2(B) & (C) and went to low levels but specifically did not list solar systems where they did list above ground pools. The form is available for viewing here https://www.trec.texas.gov/sites/def...cessible_1.pdf . It is surprising that with the proliferation of solar systems, and the addendum TREC created for leased systems, that they did not include it specifically in the promulgated contract.
It would be interesting to hear from other Real Estate Salespeople out there if they have ever submitted a Request For Interpretation (RFI) with TREC regarding this and what TREC responded with.
What is interesting about the document you link to from Fannie Mae is the chart provided. In two cases the Appraiser is prohibited from adding the solar system to the appraisal. In one case the Appraiser appears to be given the choice to add it to the appraisal but only if the financing terms allow it. Only in the first case when the panels are fully owned/paid off does it appear that the Appraiser can add it to the appraisal but is again a choice that the Appraiser makes. In ChristieP's example the homeowner apparently did not own the panels and they were still under finance.
I am only discussing cases where the array is owned, not financed. A system with collateralized debt on it is a whole different ballgame. Rereading the convo, I see it's possible ChristieP was referring specifically to financed systems when saying they added no value. I took her to be making two separate points (they can't have debt, and they don't add value). But it's possible there was just one point (systems with debt don't add value and can't be sold).
Quote:
Originally Posted by escanlan
I searched around and could not find any law/rule/etc. labeling the panels as a permanent fixture. I did find a Texas Real Estate Commission contract addendum for leased solar systems where TREC appears to indicate they are not fixed and are personal property or at least the property of the lesser and can be easily enough removed to complete a real estate sale. See item A(2) of the addendum found here https://www.trec.texas.gov/sites/def...rms/52-1_0.pdf .
I don't believe there is any explicit list of items that are permanent fixtures. But solar panels are as attached as any other item in the house, and I'm not sure anyone expects an array that is screwed into the roof and connected into the power grid and electrical panel to be taken with the seller when they move out. If a seller did this, and they did not explicitly state in the contract that panels didn't convey, they'd surely lose any lawsuit over it.
Quote:
Originally Posted by escanlan
What is also interesting is that TREC in their existing home sales contract went to great lengths to indicate what was permanently installed and built in items in items 2(B) & (C) and went to low levels but specifically did not list solar systems where they did list above ground pools. The form is available for viewing here https://www.trec.texas.gov/sites/def...cessible_1.pdf . It is surprising that with the proliferation of solar systems, and the addendum TREC created for leased systems, that they did not include it specifically in the promulgated contract.
I think solar panels are an example of "equipment and appliances."
Quote:
Originally Posted by escanlan
It would be interesting to hear from other Real Estate Salespeople out there if they have ever submitted a Request For Interpretation (RFI) with TREC regarding this and what TREC responded with.
I am only discussing cases where the array is owned, not financed. A system with collateralized debt on it is a whole different ballgame. Rereading the convo, I see it's possible ChristieP was referring specifically to financed systems when saying they added no value. I took her to be making two separate points (they can't have debt, and they don't add value). But it's possible there was just one point (systems with debt don't add value and can't be sold).
I believe that was ChristieP's point as I read her posts. However as I stated in a previous post even those that are financed (just like any other improvement) are typically saleable being paid off at closing before disbursement of proceeds. That's why I was very curious about the contract that homeowner has with the solar company/finance company.
I deal a lot with my clients and get to see many different contracts and can not believe the total garbage I see in them! It's possible with ChristieP's example that the contract actually had the requirement it would have to be paid off before the house could be sold and not by payment with a disbursement at closing. Unfortunately it's getting to the point now where consumers need to have an Attorney on speed dial to review and clarify so many different contracts today just so they don't get burned.
I don't believe there is any explicit list of items that are permanent fixtures. But solar panels are as attached as any other item in the house, and I'm not sure anyone expects an array that is screwed into the roof and connected into the power grid and electrical panel to be taken with the seller when they move out. If a seller did this, and they did not explicitly state in the contract that panels didn't convey, they'd surely lose any lawsuit over it.
You don't expect it and neither do I. It would be a ridiculous undertaking for a seller to do this and cost more to return the property to full functionality than just to leave the system in place. Of course there are some real strange ones out there that would yank them "just because". The promulgated sales contract covers that under item 2(D) under "Exclusions" but that has not stopped some less than fully knowledgeable (trying to be nice) sellers from doing these things.
I think solar panels are an example of "equipment and appliances."
They are defined that way in the various codes out there, specifically the National Electrical Code (NEC) nut TREC has already changed standard industry definitions to fit their needs so unless they specifically state it, especially when they are so specific, then I for one would request the RFI I discussed.
Indeed it would.
Responses in blue above.
I would seriously be interested in seeing the provisions of that seller's contract forcing them to pay off the system essentially before closing. I have so many clients ask about solar systems and it would be nice to give them one more piece of information to help protect them.
So $67000/$1920(12*$160avg) is 35 year pay back? Did I do the math correctly?
Are you paying cash or financing?
What's the lifespan of a solar panel? of the battery wall?
Is there any value in the panels or batteries when the 35 years are up or are they used up by that date?
Once you full charge the batteries, how long does that give you without grid power? Let's say you have dark days...rain for 3-4 days and very light charging? How long can you go?
Any home insurance cost change one you install?
Is it practical or available to sell your battery power back to the grid if you don't need it?
Do the solar panels void any builder warranty since the trusses or framing was not engineered for the extra weight?
Did your property taxes increase with the value of the solar panels?
I would seriously be interested in seeing the provisions of that seller's contract forcing them to pay off the system essentially before closing. I have so many clients ask about solar systems and it would be nice to give them one more piece of information to help protect them.
The seller in question never attempted to sell the house. Once the realtor told her that she could not sell the house without the solar panels being paid off, she decided to focus on paying them off first. She's still working on that, so the house has never been listed. BTW, her house does not have a battery pack, only the panels connected to the power grid.
I will say that the same solar company told my then 86-year old father-in-law that they could not sell him solar panels with a finance contract due to his age. Good thing since he died a little over a year later.
I could see a lease having a provision like this, but I'd be surprised if a financed system didn't just put a lien on the property, which could be paid off at closing. Why would they not want a sale if they get paid at the point of sale? Then again, there are crazy provisions in contracts all the time.
And I think being all-in at $67k or whatever number we're talking about is crazy. With the Chinese panels flooding the market, a grid tie 12kw system can be had for about $6-15k in materials, depending on how good the equipment is. I would think you should be able to be into a system with labor for $30k or less....$67k is crazy.
I agree. It would take a lifetime of $0 electric bills to justify that expense!
Putting liens on properties costs money and manpower. The filing at courthouses to place and remove liens, and a lawyer is involved somewhere, too. That would just drive up the cost even more.
The seller in question never attempted to sell the house. Once the realtor told her that she could not sell the house without the solar panels being paid off, she decided to focus on paying them off first. She's still working on that, so the house has never been listed. BTW, her house does not have a battery pack, only the panels connected to the power grid.
I will say that the same solar company told my then 86-year old father-in-law that they could not sell him solar panels with a finance contract due to his age. Good thing since he died a little over a year later.
I was talking about the contract for the solar panel financing. It would be interesting to see what was in it.
I am surprised the company your FIL was dealing with actually did the right thing. There are plenty of Fly By Night companies out there just out to make the sale.
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