How practical are solar powered Homes in South Carolina? I’ve been asked this question quite often in recent years.
I know 2 million out of 90 may not seem like a lot. But when you factor in the fact that the country is looking to add a million solar-powered homes annually, the numbers certainly look promising.
Quite surprisingly, however, homebuyers are often resistant to purchase homes outfitted with panels. Despite the promise of cutting power bills significantly, the additional credit check and logistics surrounding the process of buying a solar powered home is perceived to be daunting and overwhelming to homebuyers.
In my years as a real estate agent, I can vouch for the fact that the pros far outweigh the cons. Even if you’re questioning how practical are solar powered homes in South Carolina, it’s important to understand that the initial investment of time and money you’re putting into the process of acquiring a renewable home will reap high returns.
So if you’re considering purchasing a home outfitted with panels and before we go into all its benefits, let’s get the most common questions homebuyers have regarding the impact it makes on financing out of the way first—
1. What is the impact of solar powered homes on the total cost of the house I want to buy?
The first point of consideration here is whether the panels are owned or were leased by the seller.
Leased solar panels mean the solar panels installed in the home isn’t owned by the seller but was given on a long-term lease from the solar installation company. Typically, these leases will last for 10-20 years and over time. Depending on the agreement, this may lead to increasing payments. If this is the case, ask if it’s possible to purchase the panels from the installation company and roll the cost of purchase onto the home’s sale. While this option adds an additional cost, consider that doing so will allow you to recoup the cost with long term electricity savings.
If the homeowner purchased the solar panels outright, this makes the whole home-buying process simpler. In this case, purchasing the home means you’re also purchasing the panels. However, if the home you’re trying to buy has solar panels purchased using a solar load, remember that the seller is the one responsible for paying off the remaining balance (if any) from the panels.
2. What kind of ROI can I get with my upfront investment on these panels?
This will largely depend on where you’re located. On average, this gives homeowners significant long-term cost savings because it will cut your electricity bills. Solar panels require sunlight to gather energy needed to power your home—and in more temperate states where sunny weather is more consistent, then solar panels are a great investment.
In South Carolina, not only do we enjoy great weather, but we also have power companies that offer solar rebate programs. Essentially, this means that power companies will pay you to produce your own power using solar panels. In addition, homes with solar panels receive a 30% federal tax credit as well as a 25% state tax credit.
If you’re looking to invest in a solar powered home now, it’s worth noting as well that the Department of Energy states that it could increase home value by as much as $15,000.
3. Will it affect my mortgage loan?
I’m not going to lie—it’s a process. Trying to get approved for a mortgage loan for a home with solar panels does add another layer or logistics depending on the lease agreement details and factors like monthly fees and contract terms. But a good real estate agent or broker should be able to guide you through it every step of the way to make sure that you understand fully what you’re investing into and make the process less confusing. So my advise for this is to make sure that you’re working with a reputable and experienced agent.
Solar Paneled Homes Are Worth It
I fully understand that buying a home is an emotional purchase. But it’s also a very practical one. Purchasing a home means you can stop spending on rent and put your money into something that will reap long term financial gains. The same concept can be said about owning your own source of energy.
Owning a home with solar panels means you no longer have to purchase power from a commercial grid. This leads us to the first and most talked about benefit of solar panelled homes—
On average, a solar powered home can cut electricity bills by half, at the minimum. If you pay a monthly electricity bill of $200, that’s $2400 annually that can go down to $1,200.
Over the course of two decades, you would’ve already paid $48,000 to your electric company; as opposed to just $24,000 if you had solar panels in your home.
2. Minimum maintenance
Solar panels don’t require a lot of maintenance. Typically, homes equipped with panels only need to clean the panels once or twice a year. Reliable installation companies will also offer great warranty.
3. Incentives and rebates
I already mentioned this earlier but I don’t think homeowners fully grasp the immense benefits of tax benefits and rebates for solar powered homes.
Let’s start with tax credit. The federal government actually provides a solar tax credit, referred to as investment tax credit (ITC). This means homeowners with solar panels installed can deduct a portion of their investment cost from their taxes. If your home qualifies for this, you could receive a tax credit up to 30 percent of the cost of your system.
Additionally, depending on where you live you can even get additional tax credits and get it deducted from your state tax bill as well as cash rebates. If you live in a state like South Carolina that wants to encourage adoption of solar power, you can also apply for rebates to further bring down your upfront costs.
Finally, some states are starting to require commercial power companies to generate a portion of their energy from solar power. If you live in these states, applying for a solar renewable energy certificate (SREC) means utilities can purchase power you generate from your home’s solar panels and count it towards meeting the state solar production requirements.
If you have the option to do so, go ahead and invest in a solar powered home. It’s a practical investment that will ultimately reap long term rewards for you. To that end, if you want to know more about the process of purchasing a solar powered home in South Carolina, or are looking for solar powered home options, do reach out and get in touch so I can help answer all your questions about it.